Getting to YES: Leo Hindery Jr.'s pitched battle with Cablevision's Jimmy Dolan was only his latest fight. He thrives on deals, fear and speed.

Sure, he's scared when he settles his stocky frame into the straight and narrow sport seat of a Porsche 911 GT3 RS. And, as he now recalls that precise moment at LeMans in June 2002, it is once again, in living color, Leo J. Hindery Jr. actually at the wheel, pressing the accelerator and zooming the length of a football field in one second.

For Hindery, 55, the whole world compresses itself into the most extraordinary thoughts and sensations during the 61.6 seconds that he zips along the Mulsanne Straight, a 3.5-mile stretch of LeMans. "I learned a long time ago that if you're not scared getting in the car, then don't get in, and if you're scared doing it, get out," Hindery says. "Well, it's like nothing you'll ever do in your life. Time stands still. It's almost churchlike."

Well, sir, is making multibillion-dollar deals anything like it? Is getting George Steinbrenner to sign on the dotted line, working at the elbow of John Malone (a k a the King of Cable), launching the YES network--a regional cable sports gorilla, broadcasting the New York Yankees, the New Jersey Nets and England's Manchester United soccer team--anything close?

In fact, Hindery does see similarities between auto racing and dealmaking: They both require teams of dedicated individuals and they both require a quality that exceeds mere passion. That certainly describes Hindery. Back in 1986, while he was at the wheel of a stock car in Concord, N.C., Hindery broke his neck and fractured his jaw in eight places. During his intensive treatment, he suffered a complete shutdown of his liver and, as he tells it, teetered on the edge of death.

The latest battle Hindery finds himself in is truly worthy of his derring-do. By the time he was hired as chairman and CEO of the Yankees Entertainment and Sports Network in September 2001, the enterprise had gone through dizzying machinations involving Steinbrenner, the imperious Yankees owner, and James L. Dolan, the jet-setting president and CEO of Cablevision, the nation's sixth-largest cable operator. Cablevision owned the MSG cable network, which had shown Yankee games for 14 years until its contract with the team expired. YES demanded that Cablevision charge each of its subscriber households up to $2 a month extra for the privilege of receiving the channel. Cablevision balked, arguing that it should charge only those customers who had specifically requested YES.

Dolan and Hindery were longtime pals, but that didn't assure love taps in their ensuing battle. The well-publicized impasse between Cablevision and YES caused a blackout of 130 Yankee games for 3 million Cablevision subscribers in 2002. Both companies endured the wrath not only of frustrated Yankee fans but also of a highly critical press. But Cablevision may have borne the brunt of the ire. It's customer-satisfaction ranking fell to the lowest level among all cable providers, satellite operators and phone companies, according to an annual poll by J.D. Powers & Associates. Cablevision also suffered a significant drop in its stock price (which began to rise more recently due to speculation that the conglomerate will be dismantled).

Ultimately, it took the determined hand of New York State Attorney General Eliot Spitzer to force the two parties into a binding one-year deal. Roughly 1.9 million Cablevision subscribers were offered the option of receiving YES for $1.95 a month, paying $4.95 for a fuller sports package or upgrading their service to premium cable. An additional 1.1 million subscribers immediately began receiving YES as part of their premium packages. But five weeks after they signed the agreement in April, Hindery and Dolan were at odds again, disagreeing over how many of Cablevision's subscribers had chosen to pay for YES. As for a long-term agreement, the two sides will have to submit to binding arbitration if mediation fails to produce a deal by next spring, when the current deal expires.

As Hindery sees it, the current agreement curtails the ability of a vertically integrated cable operator, such as Cablevision, to discriminate against an independent programmer. Still not satisfied, he says he wants to push Congress to enact legislation that would prevent all major cable operators from being able to freeze out independents such as YES.

Brinkmanship with AT&T

Hindery certainly knows how to play with the big boys. Earlier, he helped build TCI into a cable powerhouse and sold it to AT&T, then engineered the acquisition of MediaOne Group. In other words, he helped persuade C. Michael Armstrong to spend more than $100 billion to build a cable empire. But Hindery got out before it became apparent that AT&T would blow the broadband opportunity (see sidebar, p. 49).

The $62.5 billion MediaOne deal, completed in 2000, shows what the man is made of. As CEO of AT&T Broadband, Hindery sat across the negotiating table from Brian Roberts, president of Comcast, who also lusted after MediaOne. Had Roberts ratcheted up the bid, Hindery would have had to walk away--AT&T simply didn't have any more cash. But Hindery knew that acquiring MediaOne was vital to AT&T's long-range plans. So he took a gamble. He told Roberts that if Comcast would avoid a bidding war, he would get him Lenfest Communications, which owned Philadelphia area cable stations that Roberts long coveted. Roberts agreed.

The problem was that Hindery didn't have Lenfest either to give or to guarantee. He and Gerry Lenfest, the company's founder, had been at loggerheads for months as AT&T, which already owned 50 percent of Lenfest, wanted to buy him out. Hindery was still playing pure poker. He bluffed. He told Lenfest that if a buyout couldn't be negotiated right away, he'd never deal with Lenfest again, except to be a thorn in his side as an unhappy partner through AT&T'S half ownership. Lenfest went for it and Hindery had what he had boldly promised Roberts. When Gerry Lenfest later learned that he'd been snookered, he was outraged. But Hindery felt no guilt, saying Lenfest ended up with $2.3 billion in AT&T stock.

That's a prime example of what Hindery says are tactics that superstar CEOs share with high-stakes poker players. "They think fast, act fast and bluff with impunity," he says. To Hindery, there are three vital characteristics that define a truly great CEO. "You need vision, courage and the skill to run a company very well," he says. "That means, at the very least, realizing your responsibility for the well-being of employees, investors, shareholders and the community in which you live and work."

A softer side

Who are Hindery's role models among his fellow CEOs? He ticks off their names in a voice full of admiration. Among others, they include Rupert Murdoch, chairman of News Corp., which has Fox Broadcasting, Fox News, Fox Sports and BSkyB satellite TV in its corral; Sumner Redstone, the Viacom chairman who merged the company with CBS to construct a powerhouse of content-driven entertainment; Gerald Levin, former CEO of AOL Time Warner, the world's largest media company; John Malone, former chairman of Tele-Communications Inc. and now chairman of Liberty Media; Ted Turner, founder of Turner Broadcasting, who had the vision to create a 24-hour news network; and Jack Welch, whom Hindery ranks as the finest CEO of the past century.

Despite his near-addiction to big deals, and the ruthlessness with which he so often carries them out, Hindery is not your typical robber baron. He's a firm believer in sharing the wealth. For instance, he has long followed a policy of rewarding employees who are at the same level with equal salaries and benefits. He's also a firm believer in stock options--and not just for executives. "When I was with TCI," he says, "about 40 people had them. I gave them to 600 others overnight and in a matter of weeks another 30,000 got them in their savings plan."

That ethos, so far as it can be tracked, is distilled from the teachings of Saint Ignatius of Loyola, who founded the Society of Jesus in 1587. On June 7, 2002, the Society honored Hindery for his generosity, namely a $1 million gift for a new student center at his alma mater, Seattle University. And Hindery does much more than just tithe. Each year, he says, he gives away one-third of his wealth. What does that amount to? He wouldn't say, but when asked if he was a billionaire, he said jokingly that he was a "centillionaire."

"I'm involved in a lot of causes," Hindery says. "I don't do symphonies. But I'm particularly concerned about education of children, especially those at risk, and I'm very concerned about AIDS and AIDS initiatives."

Now well into middle age, he appears to burst with the energy for another challenge, another deal, another crusade. While others may have been fidgeting and fussing over the possibilities, as of press time, Hindery planned to go to LeMans again in mid-June, to climb into the narrow seat of his Porsche, step on the gas and do his part to drive about 3,000 miles in the 24-hour race.

What Went Wrong at AT&T Broadband

Leo Hindery helped build Tele-Communications Inc. into a cable powerhouse before selling it to AT&T in 1999 and then running a combined AT&T Broadband unit. He persuaded AT&T Chairman C. Michael Armstrong to buy MediaOne, adding it to AT&T Broadband. The two transactions cost more than $100 billion, but AT&T subsequently sold the combined entity for a fraction of the purchase price--arguably one of the greatest disasters in U.S. business history. Here are excepts from Chief Executive's interview with Hindery:

Why did AT&T batch the broadband dream?

They never understood. AT&T never understood the end game. For them, it was all about phone, not getting into the cable business. No matter how well AT&T bought cable properties, no matter how well they ran them, there was going to be only one measurement point, which was: Were they able to use that platform to offset rapid declines in long distance?

AT&T had a sense of hubris that belied the challenge ahead. You could never buy, legally or financially, enough cable to cover the whole nation. You could buy a lot, but you could never buy more than roughly a fifth of the country. You'd run out of law or you'd run out of money.

So you had to resolve the other 80 percent of the country, through either friendship or partnership and alliance. In fairness, Armstrong's courage was quite good at the start, but he didn't know why he was doing it. In the most amazing stumble, he forgot the end game. After 1982, when AT&T stopped owning wires and kept long distance, they had to get back and get access to customers. Otherwise, they simply owned a commodity.

We [at AT&T Broadband] were the largest cable company in the world and we bought another one, which made it ever larger. Still, we weren't large enough to solve the 50-state problem. There were 12 deals I had developed which would have followed the big two, giving us commitments from every cable company in America's heart to partner with AT&T. But AT&T, under Mike Armstrong, was not partnerlike. They were excessively prideful. They had lots of arrogance in an industry that requires collegiality to be successful.

Was it a failure of strategy or execution?

It sadly turned into both. The strategy must have been misunderstood to stop it halfway through. AT&T's agenda had a very specific beginning and a very specific end. If you stopped it anywhere in the middle, you would get crushed. So either he misunderstood the end point of the strategy or lost sight of it, and, in fairness, the execution was truly pitiful.

Now there are people who say AT&T is takeover bait.

They're not even that. They have nothing that somebody also doesn't have. In a takeover context, you have to be in a position that you have something that somebody else wants. They want to be bigger and you are in the pathway to that. You have the technology they don't have. You've got people they want to have. You have a different product line that complements the one they have. There are all kinds of motivations.

[New Chairman and CEO] David Dorman is an excellent CEO. But he doesn't have anything. He no longer has wireless. Verizon does. He no longer has wires to the house. All he has is long distance--as do nine other companies. It's a commodity. So if you don't have something proprietary, then you better run the be-jesus out of it. You better be really good on the management side. But AT&T is not very well run.