Beyond the shredding of documents, the business of accounting typically promises little in the way of excitement. But when Landel Hobbs was a young auditor in Texas, he often had to travel under an assumed name.
Back in the wild days of the 1980s S&L meltdowns, Hobbs was part of a team of accountants hired by federal regulators to review and seize savings and loan outfits on the brink of collapse—an operation conducted in stealth mode so as to surprise the shady financiers and head off a cover-up.
“They used to check all these people into little towns under false names,” Hobbs says of his fellow accounting operatives, although he's not sure the efforts did much good. “It's a little hard to hide 35 people in suits in these West Texas towns.”
Last year, Hobbs stepped out of the shadows of the financial world to become president/COO of Time Warner Cable. And, as in Texas, another troubled situation awaited.
An unusual choice
Time Warner Cable, one of the best-performing cable operators, has spent nearly a year trying to buy the absolute worst-performing operator, Adelphia Communications. If the deal closes this summer, as many expect, Hobbs will inherit systems that are bleeding subscribers, generating sub-par cash flow and contending with employees bruised by the financial scandal surrounding founder John Rigas and his son Tim.
To be sure, Hobbs is an unusual choice for such a mission. Prior to his appointment last August, he had never held any sort of operating position. His ascent followed a management shakeup that sent former President Tom Baxter and former COO John Billock packing in January 2005. (Hobbs was previously Time Warner Cable's CFO.) He had no background in sales, marketing, customer service, plant installation or any other key aspect of running the nation's second-largest collection of cable systems. What's more, he had no experience at any cable operator before joining Time Warner Cable in 2001.
But even when he was a finance guy, Hobbs says, he always tried to look at budgets and spending through the eyes of the operating guys.
“A lot of finance people are myopically focused only on the immediate financial return, without focusing on the business implications,” he says.
Indeed, Time Warner Cable Chairman/CEO Glen Britt says Hobbs' adaptability is one reason he got the job.
“When Landel was new here, he thought cable was a monolithic business that could be run in a centralized way,” Britt says. “He came to understand that we run a collection of local businesses and that we're managing people who are running those businesses.”
Though he has crunched many a number, Hobbs isn't a complete quant. A Texas native, he won a partial music scholarship as a trombonist to Angelo State University, where he earned a bachelor's in business administration. Hobbs and his pals played parties, bars and rodeos around San Angelo, including a number of gigs on the local political circuit.
“The Republicans always paid us in beer; the Democrats paid us in food,” Hobbs recalls. “We tended to play for the Republicans.”
He even considered pursuing a career in music rather than accounting. “Honestly, I could have gone either way,” Hobbs says. “I think I got burned out. That's the reason I entered the business side.”
Like most accounting graduates of Angelo State, Hobbs started out in oil. He took a job in the Midland, Texas, office of Peat Marwick, auditing primarily oil-drilling and -services companies. He later moved to the Dallas office, where he served his tour of duty in the S&L crisis, before taking a job with BancOne.
In 1993, a former colleague called about an opportunity in a completely different world: cable networks. Hobbs joined Turner Broadcasting System as a controller and later became a senior VP of finance, working on budgeting and forecasting for existing networks and new channels the company was starting up abroad.
Star-struck by cable giants
Hobbs found little in the way of long-term planning at TBS. “I was amazed at the lack of [forecasting] systems in the entertainment industry,” Hobbs says. “Ted [Turner] was fabulous in intuitively knowing what made money. But there wasn't a lot of rigor around it.”
What impressed him, however, was the programmer's board of directors. TBS was owned at the time by several cable companies that had previously bailed Turner out of a financial crisis, and Hobbs found himself meeting with the likes of Tele-Communications Inc. CEO John Malone, HBO Chairman Michael Fuchs and Comcast President Brian Roberts. “The board of Turner was just star-packed,” he says.
After Time Warner bought TBS, and then was itself bought by AOL in 2001, Hobbs briefly moved up to Time Warner corporate in New York, before heading to the cable division that year.
As he faces the challenges ahead, Hobbs is optimistic—even about the Adelphia mess. He says that recent plant upgrades and resurgent employee morale have made the properties look better than expected.
“These are good businesses,” he says. “We know how to make these systems look like Time Warner Cable systems.”
There was a time, at TBS, when Hobbes would never have imagined going to the cable-system side. “Now,” he says, noting technological advances like video-on-demand, interactivity and telephone services, “I think this is the most exciting place to be.