Steven Koltai Remarks
January 11, 2013
Library of Congress
In November 1982, I met a man who would change my life in ways I couldn’t imagine, Tom Whitehead. He also happened to change the lives of literally hundreds of millions – probably billions – of people around the world enabling them to receive TV, radio and data in ways they never imagined.
At the time, I was the 28 year old Vice President for Int’l Project Finance at what was then the “Goldman Sachs of its day:” Salomon Bros. These were the years of “Liar’s Poker” (which was actually written about Salomon Bros) when you could do anything you wanted – as long as you knew it was your job that was on the line if it didn’t make everyone a bunch of money! I was told to be present for an meeting with an “important guy” who had been in a client of the Firm (Salomon had financed the Galaxy satellite system when Tom was at Hughes.) Several people were in the conference room that day, listening to a mild mannered, soft spoken, extremely low key guy from Kansas talking about how easy it would be to buy a satellite, launch a rocket and disrupt the multi billion dollar European TV industry. Oh, and he had no backers or partners but it only cost $250 million. Oh, and its in a place called the Grand Duchy of Luxembourg which contrary to everyone’s belief, was in fact a real place and not just the setting for the book “The Mouse that Roared.” Everyone left the meeting saying the equivalent of the era of “good luck with that….” I, on the other hand, leapt at the opportunity. My boss and other colleagues in the corp finance department, being the warm supportive group they were, already saw visions of my desk being vacant for the next young whipper-snapper they could bring on board so they could really start making some money. It turned out that they were right, I did in fact leave, but it was to become Tom’s partner, and move to “mouse that roared-ville”
I then spent the next two years in Luxembourg. At the time I lived in Luxembourg, there was one highway that took you there – the autoroute du nord. If you were driving from Brussels to Strasbourg, you could actually only exit in Luxembourg from the southbound lanes. Going north, you had to make a u-turn in France. Similarly, if you left the airport, you had to be especially careful because one exit was in France and and if you happened to be an American as I was, you needed a passport to re-enter.
But I didn’t care. I was young, single, spoke fluent French, passable German and could pretend to speak Luxembourgeois (though French is the official language of the Grand Duche de Luxembourg). What did it matter that there were 4 restaurants in the capital city; I ate at the Holiday Inn (my home) every night. I’d had every single item on the menu and like a prisoner, delighted in the change of the seasons as the “festival d’asperges” or the “festival des fraises” or the beaujoloais noveau est arrive were the highlights of the social scene at the epicenter of Luxmbourg culture, the Holiday Inn.
In addition to the culinary excitement, there was travel from the Grand Duche. Luxembourg was the only country in Europe at the time not a memember of IATA and thus there were flights to many destinations most carriers couldn’t service – like Havana, Moscow and Rejkavik. Of course, since my travel took me to more mundane places like London, Stockholm and Zurich, I started most days by driving in the fog (actually on a day much like today) to either Brussels, Paris or Frankfurt airports and then flew onward from there. Each of those was between 2-3 hours by car (without the autobahn mind you) so my days were usually 18 hours long.
Then there was the drama and excitement of working in a sector that was marginally of interest in neighboring governments – media. For example, the day we were incorporated, we were sued by the Governments of France, Germany, Belgium, Netherlands and Switz within 20 mins of incorporating and announcing – that was a fun day I’ll never forget!
We worked very hard for two years. We found the first investors and channel users (transponder lessees). We built a staff and I hired as my first employee Ferd Kayser, who was later to become the CEO of SES. We rented offices and put with almost comical harassment from nearly every quarter. I had many late night for Tom, early morning for me, phone calls.
Our story was the stuff of a Hollywood movie (I should know, I was at Warner Bros for almost 10 years!) In the end, though, we pioneered an extraordinary change. Here are some of the most important highlights:
- We showed that small countries, like Luxembourg, which had a right but no practical way to exploit their allocated orbit slots, could license those slots to commercial companies much as government has long licensed terrestrial video and radio frequency spectrum. Today, Coronet’s successor company, SES, is the largest taxpayer and the second largest employer in the Grand Duchy of Luxembourg which is, by the way, also the country with the highest per capita GNP in the European Union
- Tom had the exceptionally rare combination of technical and entrepreneurial skill to come up with the Idea that small 90 cm dishes + Ku Band satellite to revolutionize and make mass market, satellite TV
- Tom’s vision opened the doors to commercial TV in Europe and later around the world, in most places where only state monopoly TV existed. This changed forever the exclusive ability of governments and politicians to control the airwaves. Ironically, while we were called the Coca Cola Satellite and Trojan Horse for American TV, actually, all of first channels were start up Europeans (like Sky TV) and then eventually, services like Al Jazeera.
- Created GDL’s most successful business (previously, largest employer was the steel company ARBED). Coronet, became Societe Europeenne des Satellites in 1985. By 2012, SES, of which ASTRA is a part and the model for its satellite business, had become the world’s second largest private commercial satellite company both for its revenues and number of operational satellites, now 52. At Fiscal Year End 2011, SES Astra reported revenues in excess of 1.7 billion Euros ($2.2 Billion) and earnings in excess of 1.2 billion Euros (US$1.6 billion). SES distributes more than 6,200 TV, radio and data services covering 99% of the earth’s surface. Market cap over $11 billion
It was the ride of a lifetime. He was, to me, the role model entrepreneur. I think about Tom and miss him almost every day of my life.