By Tom Ballard, Chief Alliance Officer, Pershing Yoakley & Associates, P.C.
When one thinks of Paul Cowell, the term servant leader comes to mind. That is certainly an apt description of what he tried to do in helping a friend acquire Shop at Home network.
The fledgling network that focused on retail sales via programming delivered to individuals who owned satellite downlinks had run through its initial investments and had some legal challenges.
“I had to clean-up a lot of things,” Cowell said. At the time, he was heavily involved in growing the Book Warehouse chain, but wanted to help a friend.
When Cowell finished getting everything in order at the retailer of gems and other items, he oversaw the acquisition of Shop at Home for his friend.
“He (the friend) called me the day after the deal was done and said he was out of it,” Cowell told us. Having invested so much time in the effort to right the ship, Cowell faced a crossroads.
“I wound-up borrowing money to buy the stock,” he said. Cowell retained 51 percent interest in Shop at Home.
This was in December 1988. Several months later, Cowell saw an opportunity to exit the network and return full-time to Book Warehouse.
“A man I did not know came to me in the Spring of 1989 and offered to double the price I had paid,” Cowell recalled. It seemed like a great opportunity for everyone. But, as noted in the previous article in this series <add hotlink>, “the best laid plans of mice and men often go awry.” This was certainly the case with this deal, the second change in plans in just a few months.
“He had a heart attack and died three days before the deal was to be completed,” Cowell explained. So, left at the altar a second time and clearly wanting Shop at Home sold, Cowell decided the best way to do so was to get even more engaged.
If you think back to this period, individuals were installing downlinks in their backyards to access satellite-delivered programming. Networks like ESPN were using satellite transponder time to distribute programming to cable operators, homes and businesses.
“Three million homes had downlinks,” Cowell told us. Transponder time was in great demand, and Shop at Home was spending $105,000 a month for its service that could be preempted if another customer needed the time. As if that was not challenging enough for a home shopping service, the transponder Shop at Home was using was between two other sites on Satcom F4 – one named Ecstasy, the other Playboy!
“We had a strong male audience,” Cowell laughingly noted, suggesting that maybe the men switched from one of the nearby channels to Shop at Home when their wives were around the house.
He wanted to move his feed to a mainstream satellite, specifically Galaxy1 that had “two dozen really good channels,” and also lower his costs. Like any good entrepreneur, Cowell found his opportunity in one transponder that ESPN used as a back-up.
“It was only running color bars most of the time, and ESPN was paying $200,000 a month for it,” he said. After getting a meeting with ESPN and presenting an initial offer, he negotiated a $50,000 a month agreement that allowed ESPN to interrupt Shop at Home when the transponder was needed for a sporting event.
“The day we switched (to the new transponder), we tripled our sales,” Cowell said, adding that viewers who might have logged in to view a sporting event frequently left the transponder on after the event. This further drove sales.
NEXT: Exiting Shop at Home and pursuing his long-time vision that is embodied in the Whitestone Inn.