Cable chief suddenly quits AT&T

Executive was seen as man who would lead cable telephony strategy

October 07, 1999|By BLOOMBERG NEWS

NEW YORK -- AT&T Corp., soon to be the largest U.S. cable TV operator, announced yesterday that Leo Hindery, president and chief executive officer of its cable unit, is unexpectedly leaving the company to pursue other interests.

Hindery, 51, was president of Tele-Communications Inc., the cable TV company that AT&T acquired for $59.4 billion in March. He is the latest top-level executive to leave AT&T since Chairman and Chief Executive Officer Michael Armstrong joined in November 1997.

Hindery's departure comes at a critical time for AT&T, which has bet much of its future on cable systems that will offer phone service, data communications and Internet access as well as television programming.

The company says it is on track to sell the new services in eight cities by the end of the year, though the success of the strategy is not a given.

"Leo Hindery is a highly respected cable TV executive that Wall Street believed was going to lead AT&T's cable telephony project to success," said Kevin Roe, an analyst at ABN Amro Inc. His departure "is certainly not a positive."

Brian Adamik, senior vice president at Yankee Group, a Boston market researcher, said Hindery could be replaced by John Malone, AT&T's largest shareholder and former head of TCI. Malone is chairman of Liberty Media Group, AT&T's cable programming arm.

Hindery's decision to leave "evolved over the last couple months," said Adele Ambrose, an AT&T spokeswoman. The New York telecommunications giant will conduct an internal and external search for a replacement, and no timetable has been set.

The company also agreed yesterday to buy closely held American Cellular Corp. for $2.32 billion through a joint venture with Dobson Communications Corp. The purchase will help cut costs associated with AT&T Wireless users who make calls on other companies' cellular networks.

Hindery's departure comes just days before the Federal Communications Commission is scheduled to vote on a proposal that could force AT&T to shed millions of cable customers to win approval of its purchase of cable TV provider MediaOne Group Inc.

To win approval for the $53.8 billion MediaOne purchase, AT&T needs the FCC to relax rules barring a single company from owning stakes in cable systems that reach more than 30 percent of U.S. cable households.

The MediaOne acquisition would make AT&T the largest U.S. cable operator, serving about 16 million subscribers.

Including minority stakes -- especially MediaOne's 25 percent ownership of most of Time Warner Inc.'s cable systems serving more than 12 million customers -- AT&T would own stakes in systems reaching more than half of all cable households nationwide.

Hindery said he would stay at AT&T at least until the MediaOne acquisition closes, which is anticipated to occur by the second quarter of 2000.

"I have committed myself to helping [Armstrong] complete the acquisitions and some of these system restructurings," he said. "I'm more of a cable guy than a finance guy."

Hindery said he has not decided what he will do after he leaves AT&T.

Pub Date: 10/07/99

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