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The Golden Ticket
The son of an Italian immigrant turned lottery winnings into a variety of businesses, from large-scale real estate projects in three Gulf Coast counties to cable advertising.
Frank Maggio's career started out anything but entrepreneurial, as his first job after college was working in sales for Proctor & Gamble, the corporate marketing and manufacturing behemoth hawking everything from diapers to deodorant.
That was 1985, before the lottery ticket changed everything.
Maggio, then 23 and living in Atlanta, had been buying scratch-off game pieces and lottery tickets for several years. Going as far back as a young kid, he loved the combination of a game and mathematical equations. One in particular, a Monday Night Football promotion ticket sponsored by Beatrice, was the most complex game piece he had ever seen. There were 154 scratch-spots and two months worth of combinations.
No problem. Maggio worked the piece like a Swiss watchmaker. He eventually detected a complicated pattern and figured out a way to win the loot - $21 million. Before he collected, though, there was a lengthy legal dispute that, when settled, left Maggio with an undisclosed amount of millions of dollars.
But it was enough to move to St. Petersburg and embark on a diversified business life in entrepreneurialism that has seen him start more than 20 companies. The new career would include founding a now-defunct company designed to deliver filtered water to restaurants; owning several marinas in Greater Tampa; and holding one patent for a new form of TV advertising, with eight others in the industry pending.
There would be plenty of failures along the way, too, such as an early 1990s attempt to build luxury waterfront condos in St. Petersburg - a combination of inexperience and mistaken timing of the market. "I try not to be traditional," Maggio says from his offices on the outskirts of downtown St. Petersburg. "I believe life has little jewels you can find if you are willing to listen."
Those jewels now break down into three businesses - real estate development, cable TV advertising and TV ratings research - all of which fall under St. Petersburg-based Frank Maggio Cos. Maggio doesn't disclose revenue or sales figures, although he concedes the TV businesses aren't profitable and are funded by the real estate arm. He boasts on his Web site that within two years, he will be behind more than $1 billion of development and real estate projects on the Gulf Coast. The combined companies have about 60 employees, a jump from about 15 in 2003.
Despite, or possibly because of, the unusual beginnings to his second business career, Maggio has something of a chip on his shoulder. He considers mavericks P.T. Barnum, John Ringling and Nikola Tesla his idols, admiring their approach to business and life, as well as their "fearless desire to fix the world." Maggio's fond of saying "its just as much work to think small as it is to think big." And he's not afraid to take on big companies, government bureaucrats and established business practices, such as the Nielsen TV ratings system, using the courts as his battleground on several occasions.
Still, despite the size and scope of his businesses and projects, plus his frequent appearances in media outlets to plug his work, Maggio manages to keep a low profile. People who work for him and have been involved in deals with him speak highly of his work ethic and reliability. Those same people profess to know little about his personal life.
A struggling novice
Maggio grew up poor in Hope Valley, R. I., a small blue-collar town near Kingston, where his father, an Italian immigrant, worked as a pipe fitter. He was the valedictorian of his school and attended Emory University in Atlanta as a Robert Woodruff Scholar. It was at Emory where Maggio started working in sales for Proctor & Gamble.
Investing in real estate was one of the first decisions Maggio made when he relocated to St. Petersburg with his family after the lottery hoopla - which included being interviewed by Dan Rather - died down. He figured real estate in the booming Sunshine State was the surest way to make his lottery winnings multiply and fund his other, more lofty technological ideas.
Development inexperience, as well as an early '90s recession initially thwarted those plans. Maggio invested heavily in a condo project called Laguna at Isla del Sol, and despite selling $14 million in condos in the first 11 weeks of presales, roughly 75% of the project, he couldn't get any bank to back him because of his unproven track record. He also spent two years in a back and forth zoning battle with St. Petersburg officials.
So he sold the project to another developer and began to invest in several other real estate projects under his First Dartmouth Homes, which officially launched in 1994. The company built homes inside the Bayou Club and Pasadena Yacht and Country Club in St. Petersburg and then, when Maggio says he was running out of land to buy, he looked south. He settled on Riveria Dunes, a fledging housing project in Palmetto with a clear view of the Manatee River.
With the benefit of 15 years of hindsight, Maggio can now wistfully consider the Isla del Sol project a valuable learning experience. He began to realize the nuances of financing big projects and learned how having the right, smart people on his side, was essential. "I basically risked everything I had on that project," he says. "I learned a lot about struggling."
Entering Manatee County, though, would prove to be another struggle, as well as a bittersweet experience.
Fighting city council
In Riviera Dunes, Maggio bought lots for 159 single-family homes and 250 condos for $21 million from WC Riviera LC and Clearwater-based West Coast Partners. "We did struggle there at first," Maggio says, as "there was a stigma to Palmetto," a sleepy industrial town not known for luxury home projects.
Still, the project was ultimately a success, spawning several new developments in the area. First Dartmouth Homes recently closed on its last home in the development.
The bitter part of the Manatee County experience is more recent, coming in over the last year during the permitting process for the Riviera Southshore project. Following the success of Riviera Dunes, the Southshore project was planned as nearly 400 residences, a combination of town homes and condos, as well as nearly 30,000 square feet of commercial space and retail space on about 28 acres in downtown Bradenton.
But the project has been plagued with problems, some deeper than the current housing market slump. Earlier this year, the Bradenton City Council halted the project, citing incompatibility with surrounding homes. That decision was made despite the city's own planning commission and consultants approving the project, in addition to a majority of nearby residents, Maggio and his attorneys say.
Maggio says even the city's final decision isn't final. He has sued the city and a public mediation case could be scheduled for later this year. He's already put $30 million in the project, he says. "We've got to much involved," he says, "to roll over and not get something out of it."
Fighting Nielsen
Maggio displays the same resolve in his other business ventures, especially ErinMedia, which is, at its core, a media research firm that was initially a Bradenton-based family business. But Maggio prefers to consider the company his David in the battle against Goliath: Nielsen Media Research, the dominant TV ratings force for 50-plus years.
The minions haven't always been happy with the King, though. TV executives say the formula is neither comprehensive nor accurate, using a sample of less than 10,000 viewers. Maggio alleges it's more like 7,800. Several companies and entrepreneurs have tried and failed at replacing or competing with the Nielsen model over the years, dropping millions in the process.
Maggio thinks he has the right formula with ErinMedia's technology, which claims to be able to zero in what TV viewers are watching at any given second, and then, using zip code and census data, turn it into useful data and demographic information. Maggio says ErinMedia would have the capabilities of reaching about 60% of national viewers, dwarfing Nielsen's sample.
Maggio has twice sued Nielsen and VNU, its Netherlands-based parent company, in federal court. The first suit, filed last year, accused Nielsen of antitrust behavior, monopolizing the TV ratings industry. The second suit, filed in U.S. District Court in Tampa earlier this year, accused Nielsen of false advertising for claiming it counts all the viewers in a given market. "We don't want to replace Nielson," Maggio says. "What we do want is a level playing field that allows us and any other players to take advantage of digital technology."
Nielsen has denied the claims. Both suits are pending.
I want my ReacTV
The Nielsen spat has carried over to Maggio's other TV-focused business, ReacTV, a combination of TV game shows and advertisements. And while real estate is Maggio's cash faucet and ErinMedia is his public way of attacking Nielson, ReacTV is the closest entity to Maggio's roots: Making a buck off game pieces and contests.
ReacTV, Maggio says, is the Big Idea he's been thinking about for more than 20 years. It's essentially a cable TV channel that rewards viewers for paying attention to ads. The viewers can play a variety of quizzes, games and trivia contests that test general knowledge and their recollections of ads they have just watched. Maggio calls it an InterNetwork.
The fledging channel is still going through test phases, but is operational in some parts of the Tampa Bay area. In July, Maggio signed a deal with Bright House Networks to run the channel for the Tampa market; Maggio says he picked Aug. 1 as the debut for the station on purpose, as that day was the 25th anniversary of MTV, a channel many credit with changing the TV industry.
Maggio hopes ReacTV will be a profitable venture, not just a colorful, gimmicky contest. The business plan calls for charging advertisers based on ad ratings - not program ratings. So, the more people that watch an ad, the more Maggio can charge advertisers, and ultimately give out as prizes.
What's more, the plan is to charge advertisers one fee, based only on the number of people watching the ads on a second-by-second count. Maggio claims ReacTV, using ErinMedia's research technology, can provide that data, while Nielsen can't.
Maggio has an entrepreneur's parent-like zeal for all his companies, trying to spread the love among all the divisions. Lately, though, he says his time has been split between ReacTV and the real estate projects, about 35 hours a week on each.
He continues to work that hard, he says, in part thinking about his father, who moved to America when he was 16 years old and worked nearly every day thereafter.
"I don't believe I'm owed anything," he says. "If I lost everything I had, it wouldn't be a tragedy. I'd start over."
Associate Editor Sean Roth contributed to this story.
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