For months, Charter Communications Chairman Paul Allen and CEO Carl Vogel debated how to reduce the company’s big debt, with Mr. Vogel seeking a cash infusion from Mr. Allen, the billionaire co-founder of Microsoft, and Mr. Allen ignoring most of those pleas.
Last week, that debate ended when Mr. Vogel resigned as chief executive and as a board member amid growing board dissatisfaction with Charter’s performance. Robert May, a board member and nonexecutive chairman of HealthSouth Corp., will serve as interim CEO until a successor to Mr. Vogel is named.
Lance Conn, a Charter board member, said the board thinks “the change in leadership will accelerate” the company’s efforts to improve performance, which he acknowledged has not met Wall Street’s expectations.
In a lot of ways, the departure of Mr. Vogel, a well-respected cable executive whom many Wall Street analysts credit with doing a laudable job under difficult circumstances, signals that Mr. Allen may never step up with an injection of cash, a prospect that could add to the dark cloud already looming over the company.
On top of that, some analysts fear that Mr. Vogel’s departure could convince other executives, particularly those loyal to Mr. Vogel, to bolt the St. Louis-based company. That would be more bad news for Charter, which is already looking to fill its chief operating officer and chief financial officer positions.
Though it is the third-largest multiple system operator with 6.5 million subscribers, an $18.5 billion debt load brought on by a string of cable acquisitions in the late 1990s has hurt Charter’s ability to deploy advanced cable services such as video-on-demand and digital video recording devices as fast as its peers. In addition, the company’s financial troubles have made it tougher to fight off the aggressive growth of satellite operators in the video arena and telephone companies in high-speed data. -Jay Sherman