Schleyer: Rent-a-boss?
Some think AT&T's new CEO is leverage against Comcast bid
By John M. Higgins -- Broadcasting & Cable, 10/28/2001 7:00:00 PM
Temp or perm? That's the big question surrounding AT&T's replacement of cable chief Dan Somers with former Continental Cablevision President Bill Schleyer.
AT&T Chairman Mike Armstrong insists that the move is to install strong, long-term management at AT&T Broadband to complete the revival of the division. But industry and Wall Street executives widely see it as a move to bolster Armstrong's so far futile quest to increase his leverage against Comcast Corp.'s hostile bid for the unit.
Somers "retired" last week to make room for Schleyer, who had been highly regarded as president of Continental Cablevision. He was also briefly president of MediaOne Group after US West bought Continental in 1996 and has more recently teamed with other Continental executives to invest their take from the sale.
Schleyer is bringing two other ex-Continental executives with him. Ron Cooper will be COO; Dave Fellows will be chief technology officer.
The move seeks to counter the most persuasive argument of Comcast President Brian Roberts: that he can run AT&T's systems a lot better than AT&T management can. Roberts has sought to convince AT&T shareholders that, if the company accepts his $58 billion offer of Comcast stock plus assumed debt, he could increase the performance of the systems and AT&T shareholders would reap the upside through their Comcast shares.
And with AT&T Broadband's cash flow per subscriber half of what Comcast and others generate, investors have found Roberts's pitch pretty persuasive. AT&T has rejected Comcast's bid as too low, but Roberts has refused to raise it.
Some Wall Street and industry executives believe Armstrong is signaling that he's ready to keep the cable systems for the long haul, but that's not the consensus. "They're bounty hunters," said Lehman Bros. analyst Lara Warner of the new management. "I think they're in there temporarily, to basically sweeten the face of the cable division."
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