Ted Rogers’ obsession with firm’s succession
What would late media mogul think about his company’s latest changeup with outside talent
So once again Alan Horn is stepping into the breach at Rogers Communications Inc. The good soldier and family ally has previously filled in for an ailing Ted Rogers, and now fills in for an ailing executive suite as the company ejects CEO Guy Laurence and awaits the arrival of Joe Natale.
The post-mortem of the sudden firing had a slight air of Mafiosi about it, as in, “The Family” was not happy with its treatment at the hands of Mr. Laurence, specifically the two Rogers offspring who had remained involved with the company since their father’s death.
Let’s recall that Mr. Rogers was obsessed with succession. He had planned to retire at the age of 67, or at least that’s what he told his shareholders.
Then perhaps 70 would be an apt time to retire.
The months passed into years. Felled by ill health in the autumn of 2008, Horn stepped in. Ted Rogers died in December of 2008, at the age of 75.
What Rogers failed to do was secure family operational succession, though the company’s multiple-voting-share structure ensured that control would remain in family hands.
“They have to do, first and foremost, what they enjoy,” Rogers told me in a long-ago interview in his Forest Hill home as our conversation turned to his four offspring. “They work hard, they contribute to charity, they care about other people.”
Still, it stung to think that the company he worked “so damned hard to build over 50 years” would be run by outside talent. The backstory here, as many will recall, was the way in which the Rogers family had been “screwed” — Ted’s word — subsequent to the death of Edward Rogers Sr. when young Ted was just 5 years old.
Ted’s single-minded focus, marked by hostile takeovers and the piling up of eye-popping amounts of debt across the decades, was to build a lasting Rogers empire. (He once joked that he didn’t expect to live long enough to see Rogers’ debt ratings bumped to investment grade.)
But there are examples aplenty of family-run firms that struggled or even cratered after the scions took over. The Montreal Bronfmans, who had been handed the cash-spinning Seagram liquor empire, come to mind.
The comparison is appropriate, for it was Edgar Bronfman Jr. who, in 1995, led Seagram into the entertainment business by purchasing a controlling stake in MCA Inc. — music, movies, theme parks. That acquisition would prove to be the equivalent of pulling a pin on a grenade.
In Distilled, his soon-to-be-released autobiography, Charles Bronfman states repeatedly that operational control should have been handed to outside management and that his nephew’s MCA deal, which he did not oppose, was a mistake. In 1995, “convergence” was still a hot corporate buzzword. Remember the merger of Time Inc. and Warner Communications? And, later, the epically disastrous mar- riage of Time Warner with AOL?
In 1994, Ted Rogers launched a hostile takeover for Maclean-Hunter, with its cable, publishing and printing assets. I remember the shudder that then ran through the halls of Maclean’s magazine at the time. Few believed the takeover would bode well for those on the publishing side. “If we are to maintain a distinctive Canadian voice and a vibrant financial presence in these markets, it is essential to build companies of comparable scale and sophistication,” Rogers said at the time of the $3-billion deal.
Of course, he had to sell Ottawa on the takeover. He was looking at world-scale players at the time, Time Warner among them. The CRTC concluded in its review that the takeover constituted “a timely restructuring within the broadcasting industry that will have generally positive consequences for cable subscribers.” One forecaster predicted that Rogers henceforth would be seen not as a Canadian company, but an international one.
But the concept of convergence proved a bust and was, in the view of Sumner Redstone, in its death throes. “The age of the conglomerate is over,” the Viacom chief said in an interview in the summer of 2005.
Ted Rogers didn’t suffer fools. He yelled a lot. And boy, he sure could churn the executive ranks. What would he think today of the Rogers stable? Is the company walking back its commitment to magazine content as it chops the frequency of print (Maclean’s) and migrates some titles (Canadian Business and others) to be digital-only content brands? Is a reshaping of the Canadian media landscape in the offing? What is happening to that distinctive Canadian voice?
I wish Ted were here for another of his wry conversations. I wonder if he would reach for that famous Sumner Redstone quote: “Sometimes divorce is better than marriage.” Jennifer Wells can be reached at jenwells@thestar.ca