Charter Communications, the nation's fourth largest cable company, didn't have to search far to fill the void created by exiting CEO Jerry Kent. It is tapping a member of its own board of directors: cable veteran Marc Nathanson.
Nathanson has been the nearly-invisible vice chairman of Charter since selling he sold Falcon Communications to Charter for $3.6 billion in 1999. While active as a member of the board, insiders say Nathanson played no active role in management. Nathanson traveled infrequently from his Los Angeles base to Charter's St. Louis headquarters.
That will change. Nathanson will join Charter chairman and controlling shareholder Paul Allen in a sort of "office of the chairman" role. The executive expected to replace Kent as president is Liberty Media Corp. senior vice president Carl Vogel. He is to report in part to Nathanson. It's not clear if Vogel will get the title of CEO.
Industry executives compared Nathanson's new role to that ex-Continental Cablevision Chairman Amos Hostetter played at AT&T Broadband for nine months or so. He calmed the management ranks after a 1999 shake-up there. AT&T had bought MediaOne Group, which had earlier bought Hostetter's systems.
Charter will need plenty of calming. The company's stock dropped about 40% to $12 because investors fear that Kent's replacement won't deliver the same strong cash flow growth to which they grown accustomed.
Also, Kent's exit is gouging a deep emotional rift among Charter's seasoned managers, and Microsoft co-founder Allen is eager to keep them from following Kent out the door. All last week his financial lieutenant Bill Savoy was busy offering "stay bonuses" of up to few hundred thousand dollars to some Charter executives.
- John M. Higgins