Vogel Muses on His Future at Charter

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Charter Communications Inc. president and CEO Carl Vogel addressed questions last week about how long he might remain at the helm of the country’s sixth-largest cable operator.

Vogel, who joined Charter in October 2001, has weathered a series of storms there, ranging from Securities and Exchange Commission investigations into past accounting practices to mounting basic subscriber losses and pressure to pare down a crushing $18.5 billion in debt.

While he has succeeded on several fronts, there is still a long way to go and a short time to get there. Vogel’s employment contract expires on Dec. 31, 2005, which gives him about a year to either negotiate a new deal or start contemplating his exit.

NOT A CAMPAIGN

Speculation about Vogel leaving Charter has been around practically ever since he got the job. But last week at the UBS Warburg Media Week conference in New York, he appeared reluctant to campaign for another term as Charter’s head.

“My contract expires at the end of 2005,” Vogel said at the conference, in response to a question about his future with the company. “Charter has been an interesting three and a half years, a little different than I expected. But I like this business, I like what we do and I care about the people that work at Charter. I think very, very highly of them.

“Most of the people I brought into this company are not only long-time colleagues but personal friends. We’ll see what happens when we get out into 2005.

“We’ve made a lot of progress,” Vogel continued. “We’re proud of the progress that we made. In some cases it has been less than our own expectations for competitive reasons, but it’s been an interesting learning experience. I care about the company and I care about the people and I’m going to do all I can as CEO to do the best I can while I’m CEO.”

After the conference, Vogel did not want to comment on his employment contract and would not say when negotiations will begin.

People familiar with Charter, who asked not to be identified, said that Vogel has been frustrated but he does want to stay on the job. But with Charter’s stock price stagnant in the $2 to $3 range, its basic subscriber losses totaling 154,000 in the past three quarters and little substantive progress being made on the debt-reduction front, it may not be his choice to make.

Sources in the financial community said that while Vogel is well liked and respected on Wall Street, what Charter needs is an operations guru, not a financial expert. Charter tried to fill the operations role by hiring former Cox Communications Inc. executive vice president of operations Maggie Bellville as its COO in 2002. But subscriber losses continued to mount, and Bellville resigned in September.

ALLEN HOLDS BACK

And with a majority owner in chairman Paul Allen who has been reluctant to invest more money in the company, many of Charter’s efforts to reduce debt have had little impact.

Charter has done a flurry of deals that have pushed back maturities on bond debt and reduced interest rates, but most Wall Street analysts have pushed for Allen to make an equity infusion in the MSO that would wipe away a substantial portion of debt. So far Allen has resisted doing so, frustrating investors.

That frustration was noted by one conference attendee during the question and answer session at Charter’s UBS presentation.

“Unfortunately the contributions of the owner of the company have been a lot less than the CEO,” Sandler Capital Management managing director John Kornreich said. Vogel declined to respond.

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