Share price shows what new CEO is up against

Tony Staffieri finally has the job he has long wanted at Rogers Communications Inc. Now he must prove he's got a better plan than his predecessor had for turning around Canada's largest wireless and cable company.

Staffieri was named interim chief executive on Nov. 16, ending Joe Natale's 41/2-year tenure as CEO. The move capped a head-spinning sequence of events that included members of the Rogers family publicly feuding over which man should be in charge — and Staffieri getting fired as chief financial officer on Sept. 29.

The family went to court to fight over control of the board. Chair Edward Rogers won that battle, and directors installed Staffieri on Tuesday evening. The company's shares, which already trade at a sizable valuation discount to rivals BCE Inc. and Telus Corp., have fallen 2.6 per cent since then.

Staffieri's top priorities are clear. He has to steer the company's proposed $26-billion takeover of Shaw Communications Inc. through regulators and negotiate financing for the deal. In the meantime, he has to bring growth back to the worst-performing wireless unit of Canada's big three telecom companies.

If approved by regulators next year, the Shaw transaction is set to further expand the reach of Toronto-based Rogers, which already has more than 11 million wireless customers — about 30 per cent of Canada's population — and has extensive holdings in cable television, radio and sports.

Of the three telecom firms, only Rogers has reported significantly lower wireless-service revenue than it had before the pandemic. It made a strategic decision in 2019 to begin pushing wireless plans with unlimited data, at a short-term cost to revenue because of the loss of overage fees. Wireless providers have also been hurt by COVID-19 travel curbs, which reduce roaming charges.

The media and sports division, while smaller than its wireless and cable businesses, has also been a drag on profitability. The unit is a collection of TV, radio and sports assets, including one of Canada's two large sports cable channels and the Toronto Blue Jays baseball club. The group lost $101 million on an adjusted EBITDA basis in the first nine months of 2021. Even in better times, it isn't a big money-maker.

The firm is more than halfway through a 12-year, $5.2-billion television rights deal with the National Hockey League signed in 2013, when Staffieri was CFO, but has failed to yield many of the benefits expected.

Tony Staffieri