If you’re like me you won’t necessarily find it easy to get through all the stuff about the fabulously opulent lives of entitled, drape-wearing heirs to astronomical wealth that fuels so much of the first part of Kelly Pullen’s current Toronto Life cover story, The Man Who Would Be King, nor will you avoid a bit of nausea at the glowing terms given to Ted Rogers’ efforts to build his empire “one precarious piece at a time,” with its less-than-humble beginnings as he borrowed against the wealth of his father’s estate and was supported further by a father-in-law, a British lord. But as Jays fans it is very much worth pushing through such feelings, if you have them, because what lies inside the piece is a pretty tremendous work of journalism.
While ostensibly a piece on Uncle Ted’s son, Edward S. Rogers III, by the end of it Pullen has lifted the veil on not only Edward’s aspirations within his father’s company, but the power struggle that’s taken place within it during the years since Ted’s death, and how the company currently sees itself and where it is headed.
Even though the Jays barely rate a mention — Edward likes going to baseball games, we’re told, and the club is named as tenants of the Rogers Centre in a simple list of places and things in Toronto that bear the company’s name — it offers some important background on trying to understand the relationship between ownership and the club, and what we can potentially expect now that the days of conflicts between Edward Rogers, his sister Melinda, and former CEO Nadir Mohamed are over, with former Vodafone U.K. head Guy Laurence firmly in charge.
The results of all this digging are… actually maybe somewhat hopeful.
Here are my Coles Notes on the parts of the piece to do with the power struggle, with a slant towards all that seemed pertinent to the Jays:
- Edward was in charge of Rogers Cable in the early 2000s, and didn’t like how Mohamed came in to run mobile just as it was becoming a tremendous growth industry. At the time cable’s growth was good, but not exploding the way mobile’s was, especially after Rogers became, for a time when it first launched, the exclusive carrier of the iPhone in Canada.
- Partly due to the successes of mobile, Uncle Ted made it clear that he wanted Mohamed to run the company after his death. When that time came, Edward put his name forward as a candidate to the CEO search committee anyway. Wary of having the company founder’s son — and a member of the board of directors, and one of its biggest shareholders — looking over his shoulder, Mohamed negotiated a multimillion dollar golden parachute for himself when he was given the job. If there was ever an impasse between him and the board, and it determined that he needed to go, he’d be paid very handsomely. And, in fact, though his exit a year ago was billed publicly as a retirement, it was more the result of a failed power play — “and neither side could say for certain whether he’d quit or been let go.”
- The background to Mohamed’s departure is this: Both members of the Rogers family who are involved in the business (Ed and Melinda) bristled at the new hierarchies Mohamed imported when he arrived. The Rogers siblings lost power, and people from Mohamed’s mobile division got better jobs than those from Edward’s cable division when the two were merged. In response to this, we’re told that Edward and Melinda intentionally created confusion among other employees (especially because of their status as primary shareholders) by disagreeing with Nadir, snubbing mandatory meetings, etc.
- That wasn’t his only difficulty. From Pullen’s piece: “Mohamed’s role became more challenging as the competitive advantages Rogers had enjoyed began to disappear. Bell, for years the most lumbering, bureaucratic organization in the country, now had a new CEO, George Cope, who was on a mission to make the company more nimble. In 2008, Bell and Telus teamed up to build a new national wireless network that would give their customers the same roaming capabilities as Rogers (as well as access to the iPhone). And the effects of the federal government’s 2008 decision to open the market to other wireless carriers were now becoming clear: the new entrants, whose operations were mainly centred in Toronto, had taken a bite out of Rogers’ business. The years of unbridled growth at Rogers had led to a kind of complacency within the company and a lack of investment in itself. Its internal software systems (for customer or tech support, for example) were in need of upgrading. Even the company’s branding seemed stuck in the ’90s.”
- In 2011, the Ontario Teacher’s Pension Plan put their stake in MLSE for sale, which ended up being “ the only major acquisition Rogers made during Mohamed’s tenure,” despite the fact that, to his mind, ”buying a sports team wasn’t on strategy. Rogers was in the connectivity business, not the ego-driven, high-risk sports ownership business. His solution: mitigate the risk. He and George Cope agreed to a joint bid of $1.32 billion and split MLSE 50-50.”
- The split with Bell on MLSE happened “much to the chagrin of the family, who were growing tired of sitting on the sidelines. Edward and Melinda were especially disappointed: they had wanted all of OTPP’s stake.”
- Not long after that deal was secured, Mohamed proposed a five year plan to the board of directors that would have cut both Edward and Melinda Rogers out of the company hierarchy. It’s painted in the piece as Mohamed trying to force the board’s hand: to either give him the company or the golden parachute. They chose the latter.
- Given the timing of everything that has happened between the club and ownership — the Jays’ late 2012 expenditures came before Mohamed’s retirement was announced, and the money seemed to dry up as soon as he left– his departure is sometimes viewed as a pivotal, and negative moment for the club, but considering Mohamed’s supposed aversion to his company’s heavy involvement in sports world, despite the opposite public face, I’m not sure that’s necessarily the right reading.
- Rogers’ massive NHL rights deal was announced almost a year ago, as Mohamed’s tenure was winding down. According to the piece, the company was essentially between CEO’s, though this was a time when Edward had “the new locus of power, and people began buzzing around his office more.” Despite Ed perhaps feeling that the time was right for him to take his rightful place atop the company his father had built — something the piece suggests he still wants now, as he “stands offstage, waiting in the wings, eager to restore the family name” — it’s at this point that Guy Laurence enters the picture and takes over as CEO.
- Laurence was a compelling figure, made it clear that he badly wanted the job, was liked by a Rogers family he was keen to ingratiate himself to, and it was thought that “his radical management ideas sounded like just what was needed to rejuvenate the Rogers brand.” He began his tenure in December of last year, precisely around the time the picture seemed to change for the Blue Jays, whose talk of needing to add multiple players shifted into revenue-neutral deals and the sound of crickets. Laurence’s first order of business was to get to know the company as best he could, so he went on a listening tour.
- From Pullen: “While he was conducting interviews and town hall meetings, Laurence kept his own counsel. He was sphinx-like—listening to everybody but confiding in no one. In late April, he compiled his report, a 20,000-word document he presented to the board. The findings weren’t entirely surprising, but they put the internal issues like poor customer service into high relief. Everyone was worried the company had lost its way, that it had become slow and risk-averse. Dispirited employees were envious of Telus, with its slick branding and high customer retention rates. They were tired of working for the most loathed company in Canada.”
- The fact alone that they hired Laurence in part on the basis of upper management’s concern for the brand — unlike the complacent preceding years — would seem good news for Jays fans given what should be obvious about how a well-funded and successful club would reflect on ownership, as opposed to the perception that currently persists. Something else to be hopeful for, if one can allow oneself to read it that way: the company may have been in a minor state of paralysis while Laurence did his listening tour and compiled his strategy report. That may not mean anything for a piece of the puzzle as small as the baseball team — perhaps not as much as the sinking Canadian dollar — but if it didn’t impact their operating budget directly last winter, it may have impacted their willingness to ask for more.
- Two things that have characterized Rogers’ ownership of the club as much as anything have been their aversion to risk — especially financially, and especially when it comes to fears of throwing good money after bad the way that seems necessary as long as they’re not going to have the patience for a sustained, lengthy, brutal rebuild — and the way the team’s fortunes and actions — the lack of spending, the lying company men at the top if the organization, the failure to move faster on the turf issue that has been painfully obvious at least since free agent Carlos Beltran spurned them following the 2011 season (though, really, since Troy Glaus forced his way out of town in 2007), the astonishingly tone deaf placement of the Ted Rogers statue outside the park, etc. — have made the parent company appear utterly loathsome. If Laurence wants to be less risk averse and is more brand conscious, even if they’re a minor blip on his radar, this could turn out to be a good thing for the Jays.
- There is another possibility, though, and not a particularly good one: interestingly, despite the good relations and quick ingratiation, once Laurence came in he made the same sort of power play that Mohamed did, trying to remove the Rogers family from the day-today operation of the business. And this time the board complied. Along with outside-the-box thinking, Laurence is known best for cost-cutting, which doesn’t necessarily bode well for the company’s baseball club — or anyone but its shareholders, really. It doesn’t help either that moving Edward farther away from the centre of power removes someone who actually likes baseball, and who presumably wants to see the brand and the team do well — after all, he was, it has been reported, the one who promised Jays players at a team event in the spring that money would be available at the trade deadline if the club was still in contention.
- There is still reason to hope, though. Laurence’s “strategy, dubbed Rogers 3.0, includes fixing customer service and accelerating growth. Laurence believes that the NHL broadcasting rights are a project the entire company can rally behind, and one that can be leveraged to help resuscitate the Rogers brand. The rights may not substantially raise ad revenues, but Laurence is hoping they’ll translate into increased revenue in cable and mobile.”
- In theory those same ideas should apply to the Jays, though the parallels are not perfect. They take in money in CDN for example, but by far their biggest expenditures (payroll) are in USD, making them especially vulnerable to fluctuations on the currency market. Plus, MLBAM already has domain over much of digital rights aspects of the game, limiting the way the company could exploit that revenue stream — though obviously a better product ought to lead to more demand to watch on cable and through whatever means Rogers can devise to get digital viewers through their proprietary services.
- The baseball club seems poised to remain the red headed step child of the Rogers family, at least where sports are concerned. It’s perhaps even a bit unsettling to read of just how big their hockey play is to the company — for example, just about all Rogers-owned publications, “even decidedly un-sporty ones,” are being required to produce hockey content — while baseball is entirely an afterthought, both in the piece, and presumably in the top floor hallways at Bloor and Jarvis. However, if “critics of the NHL deal [who] say it has quickly transformed Rogers from a communications company into a sports marketing company” are right, in addition to the company’s greater willingness to take risks, and the keenness on un-poisoning their brand, fans can at least feel a little hopeful for their teams that sports and the marketing is such a central focus of the behemoth, I think. Even those who are fans of the “wrong” sport. I hope.