On the evening of Oct. 26, Guy Laurence was seated in Rogers Communications Inc.’s corporate box at the Air Canada Centre, watching the Maple Leafs battle the Pittsburgh Penguins.
The 52-year-old British telecom executive, who is taking over as Rogers’ chief executive officer on Monday, was cheering on his new home team as the Leafs crushed the Penguins 4-1.
He snapped pictures of the game on his smartphone and sent them to his three daughters back home.
Mr. Laurence had quite a few questions about Canada’s national game. After all, he needs to familiarize himself with the sport because Rogers just paid $5.2-billion for wide-ranging rights for the National Hockey League’s next 12 seasons.
One question he asked the assembled Rogers executives: How exactly does a faceoff work?
He’s about to find out.
For years, Rogers CEO Nadir Mohamed – who retires Monday as Mr. Laurence steps up – has tried desperately to stick-handle a deteriorating situation from the top of the telecom industry’s greasy pole. Rogers has long been the biggest of the Big Three in wireless and cable, the sector’s most lucrative areas, and has amassed a media empire that now includes valuable NHL rights.
But the firm has lost wireless market share to new upstarts, struggled in key markets against a rejuvenated BCE Inc. and suffered as Telus Corp. made huge gains in Western markets.
Rogers customers leave the company more often than at its big rivals.
And the telecom firm is now experiencing slowing growth in its core businesses, while seeing its industry leading metrics, including customer retention, gradually eroded by competition.
That Rogers would hire Mr. Laurence – a turnaround artist deployed to fix Vodafone Group PLC’s struggling regional properties – underscores the depth of the Canadian telecom giant’s challenges. He rose to top leadership roles within Vodafone, which has around 403 million subscribers in more than 30 countries, as an unconventional executive who upturned traditional work cultures with madcap management tactics.
But Mr. Laurence has more than rivals to worry about. He will also have to grapple with an industry where the rules of the game are a lot more fluid than in hockey because of an activist-minded regulator and a federal government in Ottawa obsessed with injecting competition into an arena long dominated by three players and coddled by foreign ownership restrictions.
“Guy will bring a very different perspective, which is good,” said Charles Sirois, a Rogers director who was on the search committee to select the new CEO. “Nadir was a continuity and a consolidation of [Ted] Rogers’ creation. And I think that now Guy will bring something different.”
Mr. Laurence, who was kept apprised of the deal’s process by Rogers executives, is excited about taking over with the new stable of NHL rights, according to Rogers’ chief financial officer Anthony Staffieri. The NHL is clearly a marquee property, and Rogers scored a coup by muscling out its competitors.
But spending $5.2-billion for NHL hockey was the easy part. Now the hard work begins: Even some at Rogers admit that maximizing returns on the 12-year deal for national broadcast and digital rights remains a big challenge.
“With this last deal, I think Guy will have marvellous assets, but there is a lot of work to make sure that these assets will be leveraged in all the dimensions of Rogers – wireless and cable and TV and radio,” Mr. Sirois said. “The next big challenge [for] Guy will be to make all those assets sing together.”
Critics say it is unclear exactly how Rogers will use sports content to benefit its core wireless, cable and Internet businesses. The CRTC’s vertical integration rules in particular are a hurdle because they prevent Rogers from providing broadcast content on an exclusive basis to its own wireless subscribers – unless that content was specifically created for mobile.
Given the current regulatory environment, Rogers may not have much luck testing the regulator on NHL content.
The company, however, has other levers to make money. Live sports, for instance, is key to Rogers charging lucrative national advertising rates.
“It is obviously PVR proof,” said Keith Pelley, president of Rogers Media. “People watch it live.”
There are also expectations that subscription fees – the money Rogers will charge other TV service providers to carry its specialty channels that showcase hockey games – are likely to rise, which is bound to impact consumers’ monthly bills.