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Ted Rogers: Moxie, creativity, boldness

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DEREK DECLOET GLOBE AND MAIL UPDATE DECEMBER 4, 2008 AT 6:00 AM EST

Ted Rogers was a prolific producer of great anecdotes, but if there's one story that captures the man's genius, it has to be the Great Texas Cable Caper. It was 1988, and Mr. Rogers swimming in debt, as always decided to raise some cash. He struck a deal to sell a U.S. cable system to a Houston utility for $1.26-billion (U.S.). At the last minute, the buyers insisted on a clause that would lower the price if the business lost subscribers before the deal closed. Mr. Rogers agreed, as long as the price also went up if he could add new subscribers. Then he launched a cunning scheme. Didn't cities like San Antonio have large Latino populations? They did. And couldn't a cable-TV company buy plenty of growth and fast if it made a compelling approach in their own language? Mr. Rogers hired a Mexican TV actor to find out. He blitzed the airwaves and filled the local newspapers with ads that promised a $100 grocery voucher to any new subscriber whose cable wasn't connected within four hours. Anyone who has ever been caught in the Rogers customer-service net knows the impossibility of getting anything done in four hours. But Mr. Rogers was never one to let an absurd proposition get between him and a greater fortune. Of course, we knew we couldn't hook anybody up within four hours, but it didn't matter, he recalled in Relentless, the autobiography released just months before his death on Tuesday. He knew the math. In seven months, Rogers Cable gave 42,000 people grocery vouchers, spent a total of $5-million on the campaign and got an extra $110-million in the sale.
Rogers Communications

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Moxie, creativity, boldness: The Texas episode was vintage Ted Rogers. This week's obituaries say he was a visionary, and it's true. But there's another reason he was so admired, even by his rivals: He ignored the stuffy, polite and too-timid conventions of Canadian business culture. In life, he was a dedicated Conservative and patriotic Canadian. But in business he was anything but conservative and his style was almost American in its aggressiveness, which is probably why he was one of the few Canadian CEOs to go to the United States and come back richer for the experience. That U.S. cable system he sold for close to $1.4-billion? He'd bought it for less than $400-million. And that deal wasn't the last time he'd get the better of the Americans. In 2004, he bought back 34 per cent of Rogers Wireless from AT&T Wireless for $1.8-billion. That would likely be worth twice as much now even after the market meltdown. The very same day he announced that deal, he flew off to Ottawa and Montreal to begin his pitch to buy Microcell Telecommunications, which he pulled off a week later. When you're moving, move like a blitzkrieg, Mr. Rogers said in a 2005 interview. Just don't stop. Don't sleep. Don't rest. That's the important thing. Others will rest. Others will take Saturday and Sunday off. Don't do that. Just drive. Even as a septuagenarian, he thought sleep was for wimps and losers. And there was no bigger wimp in Mr. Rogers' eyes than Ma Bell. In Canada, most CEOs avoid directly criticizing a rival's business plans. But when it came to BCE, Mr. Rogers tossed that convention aside. He couldn't resist. He made it no secret that he thought Michael Sabia, BCE's boss at the time, blew it by not outbidding him for Microcell. When Mr. Sabia decided to slash long-distance rates, preparing for new competition from the cablecos, Mr. Rogers scoffed: If they want to maim themselves, go at it It's an interesting strategy, to keep shooting yourself in the foot all the time. (Can you imagine Mr. Sabia saying such a thing in public?) And in the end, he did to Bell exactly what he'd done to AT&T and to that Houston utility: He beat them with his wits. When someone countered by bringing up the subject of Rogers' debt and there was always something to say about debt he had a

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ready answer. They would say, Well, Ted's got all this interest, he's going to be vulnerable.' And I would say, Now wait a minute, my interest is tax-deductible. [BCE's] dividends are not.' Eventually, private equity groups looking at Bell saw the logic in that argument. But just as the easy-money blowout was reaching its peak as Kohlberg Kravis Roberts and Ontario Teachers' Pension Plan were racing to see who could strap the most debt on to the old Bell Rogers Communications was going in the other direction. From 2005 through 2007, the firm paid down $2.5-billion in debt and got an investment-grade credit rating. Now, in the worst financial crisis in 75 years, that matters. Being a visionary is one thing. But vision with judgment and a knack for timing that's a rare combination. Ted Rogers had it, and no matter whom they choose as his successor, it will be hard for the Rogers directors to find someone who can replicate it. Article Comments

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