Editor's Letter: Courting Adelphia

Cable World, Feb 7, 2005

By John P. Ourand

It's almost too easy to view the management changes at Time Warner Cable as a corporate power grab by chairman and CEO Glenn Britt. After all, it makes for a good story.

Britt has always come across as a quiet, unassuming executive. Since he lacks the charisma of other cable CEOs, he tends to fly under the radar. His six and a half years of running Time Warner Cable have been marked by steady, not spectacular, business. And he's the one who benefits most from the executive shake-up, which pushed his two biggest corporate rivals out the door.

But there's more at play. If Time Warner Cable wants to pretty itself as a potential suitor for Adelphia or, even, Cablevision (and it does), then it had to lose several layers of corporate management.

That's why Britt's boss, Time Warner's media and communications group chairman Don Logan, commissioned an internal review to tell him what the rest of the industry already knew: that Time Warner Cable's management structure was top-heavy. John Billock and his cohort Tom Baxter were the logical ones to go. After a stellar 23-year career at HBO, Billock never really fit in at Stamford. (Remember the expensive 2003 marketing campaign "When Pigs Fly"?...)

Logan's housekeeping didn't end with those moves. After all, if Time Warner Cable is going to buy Adelphia, it still has to become much more nimble.

To that end, Logan decided to further decentralize the corporate structure by moving the MSO's EVPs from Stamford into the field. This means that Carol Hevey, Terry O'Connell and Bill Goetz will either have to move out into the field or find another job. Barry Rosenblum, who oversees New York, still will be close to corporate. And James Fellhauer, who oversees systems from Wisconsin to Hawaii, effectively will be living on a plane.

The moves put Time Warner Cable's power squarely into three sets of hands: Logan and his direct reports Britt and EVP and CFO Landel Hobbs. The moves decentralize Time Warner Cable corporate, making future acquisitions more likely.

The moves also show Britt to be a savvy backroom politician. In August 2001, he prevailed in another power struggle, when Time Warner Cable kept Britt and moved Joe Collins to the now-defunct MystroTV. Now this.

But the latest maneuvers also set Britt up as Time Warner's go-to guy-- sort of a Stamford version of Philly's Brian Roberts. Already, he's been more visible this year than in the past--partly a function of serving as NCTA chairman this year. I expect him to become even more involved in industry affairs.

The last chapter hasn't been written on this. Other MSOs eventually will follow suit, looking to streamline their operations by jettisoning executives. That's why we rate the job security of the remaining MSO executives in this issue. Let me know whether you think we got it right or wrong.

[Copyright 2005 Access Intelligence, LLC. All rights reserved.]