Investors puzzled by unexpected exit of COO Tom Rutledge
Cablevision’s Tom Rutledge, one of the most prominent and respected execs in the cable business, has ankled his post as chief operating officer of the Long Island cabler suddenly after 10 years, taking industry insiders by surprise and dismaying Wall Street.
“Rutledge is the best cable executive in America, and he’s done a great job,” said one fund manager. “If there’s something he’s done wrong, I really don’t know what it is.”
ISI Media analysts called his departure “one of the biggest bombshells in recent industry memory” and took their ‘buy’ rating off the stock, which could take a hit on Friday.
Under his watch, according to ISI, Cablevision upgraded its entire plant and achieved “almost cartoonish-like penetration” in its markets — 60% of basic video subscribers, of which 90% also buy high-speed Internet and 88% telephone service.
A 34-year veteran of the cable industry (including 24 at Time Warner Cable), Rutledge is credited as an innovator who was behind controversial advances from the remote-storage DVR to distribution of linear channels over the iPad. At Cablevision, he spearheaded a digital build-out, diversifying products beyond core video and oversaw the spinoff of assets from AMC to Rainbow Media.
He also provided a strong point of reference for Wall Street when dealing with Cablevision management beyond its 84-year old founder and chairman, Charles Dolan, and his son, CEO James Dolan.
Rutledge’s exit, which the company wouldn’t discuss beyond a formal release, raises the issue always simmering just under the surface at Cablevision that blood is thicker than water at the company controlled by the Dolan family with an iron grip by means of super-voting stock.
It’s one reason the company, with 3 million subs, has never been acquired despite repeated attempts over the years by Time Warner Cable.
In a statement Cablevision said that “it has an experienced senior management team in place overseeing cable and its other businesses, and that it has commenced a search” for Rutledge’s replacement.
Investors said it seemed odd that the company had no one lined up to take over his role.
Rutledge hasn’t indicated what his next move, if any, might be.
The industry faces enormous challenges. While Cablevision’s profits and subscribers have dipped recently, that’s been the case with most operators in an increasingly competitive landscape since the entrance of Verizon’s FiOS and with financially strapped consumers giving up service.
James Dolan wished him well. “Tom Rutledge has played a key role in driving and shaping Cablevision’s success over the last decade, applying a rare combination of technological vision and operational excellence that has delivered results. We are enormously thankful for his time here.”