Since Ted Rogers died, the ‘Old Guards’ are the powers behind the throne

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Remember Rasputin? The mystic mad monk who shaped prerevolution Russia as backroom adviser to Czar Nicholas II and his wife Alexandra?

Well, when Rogers Communications Inc. vice-chair Phil Lind released his autobiography three years ago, he told a tale about his friend and long-time colleague, Rogers director Alan Horn. The story centred on Mr. Horn when he was the media and telecom company’s chief financial officer, and he devised a complicated strategy to move Rogers’s radio stations from one entity to another, for tax reasons.

After the company successfully executed the manoeuvre, Mr. Lind called Mr. Horn “Rasputin’s Rasputin,” which both Rogers executives took as a compliment.

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There’s one problem with emulating the Mad Monk’s management approach. The first time around, it ended poorly. Recall that Rasputin met his end after being poisoned, shot and tossed into a river by rivals. And revolutionaries killed the Czar and his wife shortly afterward.

This time, Mr. Lind and Mr. Horn wear part of the blame for letting what should have been a straightforward chief executive changing-of-the-guard at Rogers escalate into an all-out brawl for control of the company. And a feud in the founding family has knocked the stuffing out of the stock price and put the $26-billion takeover of Shaw Communications Inc. at risk.

As executives who made fortunes serving Ted Rogers – Mr. Horn holds an $80-million stake in the company, while Mr. Lind’s Rogers shares are worth $22-million – these Rogers directors should be doing all in their power to honour his legacy. The current revolution at Rogers reflects poorly on both.

Mr. Lind, now in his late 70s, and Mr. Horn, a decade younger, were Ted Rogers’s key lieutenants in building the country’s largest wireless and cable operator. When Mr. Lind joined the company in 1969, it had 15,000 cable subscribers; there are now 10 million Rogers customers across Canada. Mr. Horn, a native of Scotland, came aboard in 1979 as the financier who tapped junk bond markets to fund Rogers’s expansion, working hand-in-glove with Robert Gemmell, then an investment banker, now a fellow board member.

Since the founder passed away in 2008, the pair have played Rasputin-like roles as the powers behind the throne, in their roles as directors advising the company and chair Edward Rogers, and serving the Rogers clan as advisers to the family trust that controls 97.5 per cent of the company’s voting shares.

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Mr. Lind and Mr. Horn have been squarely in Mr. Rogers’s camp as he has attempted to replace company CEO Joe Natale with CFO Tony Staffieri. Court documents show Mr. Horn shook hands with Mr. Natale after negotiating a $13.7-million severance package. The Rogers board reversed course a few days later, with Mr. Natale remaining and Mr. Staffieri departing.

In the wake of the controversy over leadership, the board replaced Mr. Rogers as chair last week. He then defied his mother and two of his sisters by moving to replace five Rogers directors. He nominated five new board members, who reinstated him as chair. The new board members include former Rogers vice-president Jan Innes, who Mr. Lind hired, and former Brookfield Asset Management CEO Jack Cockwell. Mr. Lind served on the Brookfield board.

Mr. Horn and Mr. Lind promptly put out statements supporting the new candidates, with both saying it’s what Ted Rogers would have wanted. The convenient thing about claiming you are honouring a deceased founder’s wishes is no one can prove you wrong.

In a statement on Wednesday, Mr. Horn said that, after three decades at Rogers, “I assess business performance based on the facts, share price, relative total shareholder return and key performance indicators. I am sure those looking at this story with a critical eye and a view to business performance will cut through the noise.”

For his part, on Wednesday Mr. Lind said, “It is extremely unfortunate that Edward is being forced to implement the wishes of the controlling shareholder in court. The actions he took were appropriate and necessary.”

However, Ted Rogers’s daughter Martha Rogers – who is also on the company board and a member of the trust’s advisory committee – took to Twitter over the weekend to make a case for keeping Mr. Natale as CEO and preventing her brother from returning as chair. She attacked his long-time advisers.

“The Old Guards who puppeteer Ed, & who just can’t let go, are led by Phil Lind & Alan Horn,” Martha Rogers said. “My father trusted to “do the right thing” & would have fired them in a heartbeat for making his biggest fear a reality. Money, power & control have gone to their heads.”

In his autobiography, titled Right Hand Man, Mr. Lind describes the departure of former CEO Guy Laurence, who was Mr. Natale’s predecessor. Mr. Lind said the Rogers board severed ties in part because Mr. Laurence “refused to listen to anyone.” Rogers veterans say Mr. Natale fell out of favour in part because he committed the same sin – not showing the proper deference to Mr. Lind and Mr. Horn.

The relationship with Mr. Natale began with infatuation. Mr. Lind played a key role in recruiting the former Telus executive and said in his book that the new CEO displayed “all the right instincts” early on. “Joe is exhibiting this Ted-like town hall flair,” said Mr. Lind. “So far, I’d describe his tenure as terrific. He’s exactly the person we need.”

That was then, this is now. Schemes that would make Rasputin proud have left Rogers saddled with two boards, two chairs and a lame-duck CEO as it heads into critical regulatory hearings on the Shaw takeover.

The company is going to need to propose remedies to the Competition Bureau and other agencies to get the deal approved. Mr. Lind, sitting beside Ted Rogers, used to excel at the give-and-take with regulators. Now the media and telecom veteran would struggle to answer a simple question: Who speaks for Rogers?

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