The Happiest Millionaire
Does Stuart Arnold, founder of the Auto Trader publishing empire and one of Florida's most brilliant maverick successes, still have the Midas touch?
He's working as hard as ever to find out, trying to turn his $15 million Clearwater studio, CPN Television, into one of the state's leading production facilities, hiring staff, going digital and planning to take business away from better-known studios in Orlando and Miami. It won't be easy to repeat the successful run of Auto Trader, but Stuart Arnold loves the chase.
A typical Arnold day hurtles along at the speed of a John Woo flick, propelled by the will of a man who simply will not rest.
One minute he's in the million-dollar audio room of his production studio, proudly pointing out where Hulk Hogan looped "Thunder in Paradise."
A half-hour later he's thousands of feet in the air aboard his Lear 25D, jetting to a meeting with Ron Fenster, the owner of a Fort Lauderdale animation/graphics firm whose equipment Arnold has just bought.
Three hours later, he's back on the West Coast, climbing into his helicopter and piloting over St. Petersburg.
Twenty minutes more and he's landing by the dock of his beach house on Tierra Verde island to test drive Excalibur, the 42-foot powerboat he's in the throes of selling since he recently bought a faster Cigarette boat.
Then it's back to his CPN office to return calls.
Then out for dinner with Ariana Reed, known as Ari, his 27-year-old live-in girlfriend.
Then back to the office until midnight. Then off to the supermarket with Ari for some raisin bran.
And then, finally, to his 8,000-square-foot Victorian home in Largo with pool and tennis court, where, on Christmas Eve, the lawn is covered by man-made snow for the pleasure of his grandchildren and the neighborhood kids.
What makes Arnold run? He already has the millions, the homes (two in Pinellas County, one in Key West, another in Las Vegas), the boats, the aircraft, the loving girlfriend, the cute grandchildren (four with another on the way) and the devoted dog, a 12-year-old Yorkie named Tinker.
What a life. The perfect life, a life that, because of its perfection, flies in the face of one of our most ardently held prejudices: Americans love a success story, but they usually can't stand the guy who succeeds.
We prefer our mighty fallen, our wealthy flawed, their success compromised by Pyrrhic victory or Faustian bargain. Remember Howard Hughes, addicted to codeine and wasting away in his Acapulco penthouse. Or William Randolph Hearst, miserable in San Simeon. Or all the paper plutocrats after Black Monday.
That there are few worse things than answered prayers has been proven time after time among Florida entrepreneurs as well, especially during the last decade. Consider Fort Lauderdale's Peter Halmos, who created an empire out of credit card protection with SafeCard Services and now spends much of his time tangled in litigation. Or CenTrust's David Paul, imprisoned by his own hubris.
Or none other than Henry Flagler who, his golden years wasted by ill-health, mused: "I don't know of anyone who has been successful but that he has been compelled to pay some price for success."
And so Stuart Arnold remains an anomaly. He has somehow dreamed the dream and made it work, followed his quirky little star to a destiny inured to the metastasis of capital which has paralyzed entrepreneurs as diverse as auto maverick John De Lorean and Delaware's duPonts.
It hardly seems fair. And, to rub it in even further, Arnold even has his health. Although he admits to a love of wine and women when he was younger, he bears few of the usual scars of excess. At 61, he has the face of a late-40s Steve McQueen and the body of a gymnast. He wears his still-abundant hair in an expensively cut light brown shag which hangs just over his ears. His eyes, a cool bright blue, brim with energy.
"I have very few worries," he allows.
And you have little choice but to believe him.
Arnold now lives in Xanadu partly because he never underestimated the power of a good hunch. Ross Perot, Hugh Hefner, Bill Gates - Arnold is one of these men, the ones who get the brainstorm, get it made, get it known, watch it grow.
"I'm a classic entrepreneur," declares Arnold. "And I share many of the traits of an entrepreneur. Entrepreneurs are stand-alone guys. So am I. We like to get things done. So do I. Most entrepreneurs have younger wives or girlfriends. So do I. And most entrepreneurs have to be able to see beyond tomorrow, figure out a need and fill it. Which I've done."
This assessment is echoed in Arnold's friends and associates.
"Don't try standing in Stu's way once he's got a plan," agrees Arnold's close friend Robert Miller. "He's going to do what he's going to do."
"When Stu makes up his mind, nothing stops him," comments Lou Tarasi, vice president, Franchise Operations, Inc. of Largo-based Val-Pak, who was general manager of Auto Trader and opened several Western U.S. markets. "He taught me never to give up."
"I couldn't take anything seriously"
Like most great success stories, Stuart Arnold has come up aces in knowing how to grab that magic moment when hard work meets opportunity. Those are two essentials for success, he believes.
The only child of a successful insurance agent and his wife, Arnold was born in the Bronx, N.Y., in 1934. His mother's water broke as she passed a convalescent hospital and Arnold was born there. "That should tell you something," he says, not bothering to explain exactly what he means as he continues: "My life's been like that from the very beginning."
Arnold never cared much about grades in school, an attitude which prompted his parents to send him south to Admiral Farragut Academy, a boarding school in St. Petersburg. "It didn't really help much," Arnold admits. "And then I went on to Duke and majored in journalism. It was a disaster. I couldn't take anything seriously."
Although he blew off his bachelor's degree, this casual approach to his major did not, predictably, hurt his chances for employment in the field, any more than did his two-finger typing. He worked in California as the editor of Powerboat Magazine, then as the boating editor of the Los Angeles Examiner, and then, in the same capacity, for Hearst's Journal-American in New York.
"Both of these papers," he remarks dryly, "went out of business not long after I joined their staffs."
After newspapering, Arnold hopscotched through a series of very odd jobs: promoting bowling clinics for the New York public relations firm of Barkas & Shalit (the "Shalit" being Gene Shalit, now movie critic on NBC's "Today" show); learning the cold-type business at The Reminder, a local newspaper in Ossining, N.Y.; opening the Pony Tail bar in an area of the Bronx not usually favored by sons of insurance executives; and owning a daycare center in Yonkers.
A variety of other jobs followed, and in 1973 Arnold heard of an opening at the St. Petersburg Times, located in the same city where his parents had retired.
"So I flew down to interview for this job selling ads," he recalls. "I remember being really nervous, sitting there in the lobby looking at my watch. After the man who was supposed to interview me [display advertising manager Clyde Pinson] kept me waiting for a half-hour, I said 'Screw it!' and walked out." He had planned to tell Pinson about his idea for selling used cars. Instead, he went to an art store around the corner, bought the letters that spelled A-U-T-O
T-R-A-D-E-R and began selling ads for it the next day. "They were $4 apiece and it made money from the start," Arnold says with some amazement.
There are many stories surrounding the growth of Auto Trader, and Arnold is fond of recounting any number of them. How, in the mid '70s, frequent after-work gatherings in a nearby bar regularly devolved into planning sessions with notes kept on cocktail napkins.
Narcotic of accomplishment
How he thought of the idea of running pictures above the written descriptions of the cars to lessen the workload of his girlfriend at the time, who doubled as typist. How he got friends to call up as many convenience stores as they could and ask why there were no Auto Traders on the shelves. How he benefited from a federal jobs program which enabled him to hire people and get the government to pay half their wages ("the state of Florida deserves a pat on the back for that"). How he approached Raymond James in 1975 for assistance in going public and they refused. How he produced a pulp "magazine," but without expensive, demanding editors and reporters and with every page a money-maker. How consumers actually paid money for a publication that was nothing but advertisements. How in 13 years it grew to more than 31 "Traders" in cities through the U.S. and Canada. How he started franchising, selling the first for $2,000 in Cincinnati to Ben Schmidt, who later sold it for $7 million. How Auto Trader ballooned into 21 spin-offs - Old Car Trader, Aero Trader, Yacht Trader, Chopper Shopper.
And, finally, how Arnold never planned to sell Auto Trader at all. Ever. And then - well, let him tell it: "People kept sniffing around, wanting to buy, and then Cox [Atlanta-based Cox Enterprises] came along in 1987. I told them if they were really serious to come back with barrels full of money and I might sell. And [in 1988] they did. And I did."
And for a never-disclosed price - but it's interesting to speculate. In 1990, two years after buying the magazines, Cox tried to market the package for a rumored $300 million. So one may assume that Arnold got somewhat less than that figure - but not much less.
Not that it seems to matter.
"I never started Auto Trader for the money. And it really wasn't a particular dream of mine. I guess I did it for" - he pauses - "well, this may sound kind of corny, but I did it for the feeling of accomplishment. To decide to do something and then do it. Because the real fun is in the doing of something, isn't it? Once it's done, it becomes something for the suit-and-tie guys."
The narcotic of accomplishment is partly why, after he sold Auto Trader to Cox Enterprises, Arnold could not relax. "I didn't want to sit with a pile of money on the table, do nothing and call myself an investor," he says, although the computerized ticker tape running at all times beside his desk would suggest more than a vague interest in the stock market.
Whatever his passion for stocks, it wasn't enough. He missed the bigger game, the challenge of building something. "And then it happened," he says, shaking his head, "just like Auto Trader. By instinct. By luck. When I was forced to move out of my old Trader offices in 1988, I needed a place for my chopper, which I had parked in a mini-hangar on the old plant site. So, I looked around, found seven acres with an empty warehouse in Largo's Rubin Icot Center, paid $1.3 million for it and moved in. And I had no idea what I was going to do with any of it."
Almost immediately, that idea showed up unannounced when Cox offered to sell back to Arnold some Auto Trader television production equipment it did not need. Despite little experience in the field, Arnold attacked the new endeavor with his usual gusto if not with an eye on the bottom line.
"Potential clients would come in, look at the editing rooms and say: 'This is really great, but you need a whatchamacallit'," Arnold recalls. "So I'd buy the equipment. Then someone else would come in and say, 'Now you need a whosaywhatsis.' Within no time I had invested more than $10 million."
Not making any money
What that money has bought is production equipment a Sony representative once described as rivaling that of the Disney studio in Orlando: 40,000 square feet sporting a ten-meter Scientific-Atlanta satellite teleport; two production studios (60 by 90 feet and 45 by 45 feet); computer-controlled Strand lighting and Vinton Fulmer camera pedestals; and an audio room with a 48-channel, 96-input Neve VR console fitted with flying faders and total recall and a New England Digital Synclavier 9600 capable of producing almost any sound. The facility, webbed by a Utah Scientific matrix (measuring 50 by 50 feet) and hundreds of miles of wiring, offers about any capability a network would need.
"We're not making any money," he says, "but taking into account all the salaries, overhead and expenses we pretty much break even. How long can I continue on this basis? Put it this way: I would spend as much money doing personal things. It's a fun activity for me. If I never made a dime, I would still be here."
CPN began by producing infomercials, which have since lost their luster. "There used to be one winner out of seven, which would more than cover losses and make a profit. Now we're looking at one in 20."
Arnold has set his sights higher to "bring the sense of teleproduction to the Tampa area." Along with a steady stream of commercials, CPN does programming for ABC, ESPN, Prime and HSN Direct. Burt Reynolds edited a movie at the studio, and the opening graphics for the 1996 Superbowl were created there. CPN recently was awarded a contract to do 3-D graphics, known as "sweepers," for NBC's "Tonight Show with Jay Leno."
Perhaps most significant in Arnold's effort to build a reputation for CPN is a contract with the Public Broadcasting Service to shoot a children's series, "The Reppies," a $2.6 million production which premiered nationally last month. "This is it," Arnold declares looking over the sets designed by art director Claire Lavin. "This is the direction we want to go in."
CPN is not just another expensive toy to Arnold. "The rewards in the telecommunications business can be geometric. You can put a dollar in today and get $100 out tomorrow," he enthuses. "The multiples of profit are exceptional. And that's the reason the Time-Warners, the TCIs are spending the money; they're not stupid. They know that some day everything will be electronic. And I hope I'm not stupid either. So, I'm doing in a small way what Ted Turner is doing in a large way."
Reporters typically use the word "flamboyant" when talking about Stuart Arnold. This seems to refer to an earlier time, when he was living the high life in Key West and Las Vegas, surrounded by revolving-door girlfriends and extravagant toys. Now, however, he lives less like a sultan and more like a man who has gotten rich and gotten over it. Examples of his increasingly inconspicuous consumption abound.
Shorter than Dolce Vita
While it is true that, in 1990, he simultaneously owned a Lamborghini Countach, a Ferrari 328, a Lotus Esprit, a Corvette and a stretch limousine, he now prefers his 1992 maroon Dodge Caravan. The Ivory Lady, his 103-foot yacht, is two feet shorter than Dolce Vita, his former yacht and the sister ship of the one owned by Christina Onassis.
His favorite house - the Victorian in Largo - doesn't come close in splendor to what he could afford, say, something like the $12 million Palm Beach palace owned by Bud Paxson, past owner of Home Shopping Network. His idea of a really flamboyant dinner is an early evening meal of chilled Lambrusco and pasta with marinara sauce at Julio's, an Italian family restaurant located in a St. Petersburg strip mall.
"Eccentric" is another word often used about Arnold. He is the first to admit he does have his quirks. For example, "13" is his lucky number. ("I bought the CPN building when I found out the price was $1.3 million. And my boat is 103 feet long. See? 1? And 3?") He also considers tornadoes good luck.
His personal dress code for the office consists of Levis and sneakers. ("When I'm buying, I'll put on a suit and tie," he observes. "But if I've got something other people want to buy, why dress up?")
Self-discipline is something of a religion with Arnold. Not only has he worked on controlling his breathing, he has trained himself to wake up at an exact time. ("And I mean the precise minute.")
Then there's Arnold's unique work schedule, which begins around noon and ends around midnight. "That's my cycle," he admits. "What can I tell you?"
He will tell you how Cox felt about that schedule. "After I sold Trader, I signed a five-year management contract with Cox," he says. "Suddenly, I had these young MBAs [from Cox] calling me up at 9 a.m., getting frustrated that they could never find me in the office. So, the top brass told me to come up to headquarters for a meeting. I bought a suit - I didn't own one - and flew up to Atlanta. They brought up my working hours, and I told them, nicely I hope, that I wasn't going to change at this point in my life. So they offered to buy out my contract. I couldn't believe it. I asked them: "Now let me understand this. You'll pay me for not working or you'll pay me for working a schedule I don't like? My decision to cut bait did not require the mind of a brain surgeon."
All these colorful idiosyncrasies aside, perhaps the most visible eccentricity about Arnold is his dimly lit, windowless CPN office, which determinedly sticks its tongue out at the trappings of executive decorum.
Free of the usual Italian furniture and skyline view, the office's life-size American Indian mannequin, seated in a chair and dressed in faded jeans, cowboy boots and leather shirt, attests to the fact that no decorator ever entered its door.
As singular as the Indian may be, however, it is not what makes this headquarters ultimately remarkable. What does is the fact that this office is exactly like its previous counterpart at Auto Trader - down to the three marine lamps hanging over the desk.
"It represents continuity," says Arnold proudly. "And it works for me. Why change it?" He pauses. "Oh, I know. Some people think I'm weird."
He pauses again. "And not everyone likes me."
Maybe, but his 41 CPN employees seem to think of Arnold as part guru, part lucky star. "I learned something from Stu which sounds strange at first: No decision is a decision," says Val-Pak Vice President Lou Tarasi. "There could be 100 people pushing Stu to make up his mind on something - ultimatums flying around - and he would force the other people to make the first move."
Charles Thomas, general manager of Auto Trader in Clearwater, goes so far in his admiration of Arnold as to seem superstitious. "I haven't touched his old office," he says, showing a visitor into an Auto Trader office identical to Arnold's at CPN. "His old apartment is still right up those stairs behind the wet bar. I even keep the windsock he used when he was landing his chopper."
Joanna Marsh, a Florida State University graduate who works for Arnold at CPN as a producer, praises him for his accessibility. "He's available to everybody," she says. "You can go into his office anytime." She even awards him with a quality unknown in most entrepreneurs: "He has no trouble letting women have a chance. I started out as a secretary here. After a few months, I asked him if I could have a shot at producing and he gave it to me. He'll readily admit - and mean it - that Ariana runs much of what goes on at CPN."
Ari is in the business ("my indispensible executive assistant") as well as the personal sides of his life. Arnold met her in 1987 when she was a teenager working in the composing room of his Las Vegas plant. It appears to have been love at first sight; nine years later, their relationship survives despite 12-hour workdays. He easily dismisses talk of their age difference and future plans with a humorous aside: If they ever married, he would be 11 years older than his would-be father-in-law.
Still, Ari has brought a change to the wealthy bachelor. Gone is the high-times playboy who flashed through the canals and harbors of St. Pete, showing off bikini-clad blonds aboard his "muscle boat." But what about the man who, when asked why he didn't retire after selling Auto Trader, responded that he was lonely? "Auto Trader was my family."
He divorced his first and only wife shortly before moving to St. Petersburg. She lives in New York. His two children, Stuart III and Bonnie, live nearby. Their proximity has had its advantages - he dotes on the grandchildren - and disadvantages. Arnold and his kids haven't always seen eye to eye. He has had more than a few run-ins with his daughter about both business and personal matters. "I'm a tough act to follow," he concedes. "It's hard being the child of a successful entrepreneur. And I have not always been an easy man to live with. I've had my partying years. And, I admit it, I'm driven. Which is not always fun."
To spend any length of time with him at CPN is to observe high intensity. "That's the way I work," he says, taking a hand full of pink "call-back" slips from his assistant. "'If thine eye be single, thy body will be full of light.' That's a quote from the Koran that I take to mean if you're single-minded, you will achieve much and be fulfilled."
Arnold's other endeavors include two ventures already up and running: Zip Video, which films anything anywhere in the country for $125 and sends it to the client by next-day Express Mail; and a project financing Bema Entertainment Group of Tampa, run by Keith Jacobs, to produce Christian religious CDs.
"Keith just called me up one day," Arnold recounts, "and said he had an idea he wanted to explore. He came in, talked to me about the importance of having some good influences in the music young people listen to and convinced me to give him an office and help him get set up to record and produce music that might possibly give kids some good examples. If I can help one kid, I don't care if I lose money."
Beautiful as it is, this statement could only be made by the very rich, a fact Arnold acknowledges. "It's common for entrepreneurs to become more philanthropic when they get older," he says. "Of course, philanthropy is relative. But sharing is the key. And I've got so much to share."
It is dark in Arnold's office now, almost as dark as the night outside, time to give a good-bye nod to the Indian in the office and drive home. Out in the CPN parking lot, in that eerie quiet of an office park at midnight, the future seems more imminent. Exits are considered.
"I'm not particularly religious," Arnold says, leaning out the open window of the Caravan as he turns on the lights. "But I've worked out a deal with The Guy Upstairs. I try not to hurt anyone else. I'm not predatory. I try to live a good life rather than talk one. And I try to be patient. It always pays. Long ago, when I was trying to pick up the prettiest girl in whatever bar I was in, I'd stand beside the entrance to the ladies room. If you're patient, you're bound to get your chance there."
And then, with Ari riding shotgun, Stuart Arnold drives away in the maroon van, to the Victorian home and good old Tinker the dog and tomorrow's bowl of raisin bran.