Former AT&T Broadband & Internet Services CEO Leo
J. Hindery Jr. crossed over to be chairman and CEO of GlobalCenter Inc., a subsidiary of
telephone-service provider Global Crossing Ltd. that maintains Web sites for corporate
It may not be a subsidiary for long. Part of Hindery's job
will be to take GlobalCenter public -- a move Hindery said will take place in the first
half of next year. "It will probably be earlier than later in that time frame,"
Although it appears that Hindery, 51, may have landed
himself in a situation similar to AT&T Corp. -- Global Crossing is a telephone
company, albeit on a much smaller scale -- he said this endeavor was more akin to his gig
at Tele-Communications Inc.
For starters, Hindery will be running the show himself, and
not reporting to a bigger CEO. And he will be able to continue to do what he does best --
"I think you will see us very active on the deal
front," Hindery said. "I will be building a management team that is
first-rate." GlobalCenter is based in Sunnyvale, Calif., near Hindery's Hillsborough
Although it is an Internet company, GlobalCenter is no
start-up. Hindery said the company counts the top 300 users of Internet services among its
clients, including Yahoo! Inc. and eToys Inc. It has annual revenue on the order of $200
million, and it registers more than 1 trillion hits per year.
"This is an existing company with a lot underneath
it," he added.
GlobalCenter announced Hindery's appointment on the same
day his old employer, AT&T, announced that Daniel Somers would take over permanently
as president of AT&T Broadband -- a coincidence noted by many industry observers.
In a meeting with analysts Dec. 6, Somers and AT&T
chairman C. Michael Armstrong spent an inordinate amount of time trying to convince
analysts that it did not pay a high price for its cable assets.
At the analysts' meeting, Armstrong said that although the
purchase price of both TCI and MediaOne Group Inc. will total $110 billion, that doesn't
take into account assets that will be sold by the acquired companies.
Somers argued that factoring in assets that will be sold by
MediaOne ($18 billion), the value of holdings in various cable partnerships ($14 billion)
and stakes in Excite@Home Corp. ($5 billion), Time Warner Entertainment, Road Runner and
other partnerships ($19 billion), the price tag for TCI and MediaOne drops to $54 billion.
That works out to about $3,350 per subscriber, or $2,200
per home passed -- a bargain these days.
While most analysts saw AT&T's explanation as an
attempt to bolster its stock price, they said the argument was plausible.
"There is some truth to it," Legg Mason Wood
Walker Precursor Group analyst Scott Cleland said. "But they also have to spend an
inordinate amount of money to get to where it is useful. The truth is probably somewhere
Hindery split from AT&T Broadband in October, ending
what was an acrimonious relationship at times.
He first built his reputation in the industry as the head
of InterMedia Partners, a Memphis, Tenn.-based MSO that he built into the ninth-largest in
the country. Hindery went to work for TCI chairman and CEO John Malone in 1997, helping to
shore up that company's sagging cable operations.
While at TCI, Hindery ignited an industrywide consolidation
effort, helping to turn that MSO into something Malone could sell to AT&T.
Hindery also earned a reputation of being a hard-driving
dealmaker with an intense dislike for bureaucracy -- traits that led to clashes with
He will see some familiar faces at his new job. Former
AT&T Business Services president Robert Annunziata, who previously ran MSO-controlled
Teleport Communications Group, is Global Crossing's CEO. And chairman Gary Winnick is an
Hindery said the opportunity to work with those two
"sure helped" him to decide to take the job. "Bob [Annunziata] has been a
great ally. Gary [Winnick] is an old friend, and I am pleased with what he did at Global
Crossing. I build things. He's done a nice job putting together a team that is
deal-oriented. These are all of the same things I found attractive about TCI."