Front Burner - A Succession-style spectacle at Rogers

Episode Date: October 27, 2021

The family behind the telecom giant Rogers Communications is in a bizarre public spat over control of the company. Today, CBC business reporter Pete Evans explains the unusual infighting.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hi, I'm Angela Starrett in for Jamie Poisson. Well, if you live in Canada, there's just no avoiding Rogers. Founded by the late Ted Rogers in 1960, the company is a giant, one of Canada's big three telecom companies. If Rogers isn't your internet service provider or sending you your cell phone bill, perhaps you've been to a Blue

Jays game at the Rogers Centre, or maybe you're a Raptors fan, a team owned by Maple Leaf Sports and Entertainment, which is partly owned by, you guessed it, Rogers. The company is totally ubiquitous in this country. And now the Rogers family is in the midst of a very public, very dramatic, very bizarre spat pitting brother against sister, mother against son in a fight over control of the company. the company. Today, CBC Business reporter Pete Evans is here to break down what's going on with Canada's very own Succession Style Spectacle. Hey Pete. Hey Angela. So I feel like before we start, we need to kind of give our audience a little like nod to buckle up because this is's succession, referring to the hit HBO drama.

But in a flurry of tweets sent around 3 a.m. Eastern time this weekend, Martha Rogers said it feels like another HBO show, Game of Thrones. I mean, have you ever seen anything like this? I mean, I can honestly say that I haven't. And I felt kind of weird saying that. But then when I checked around with people smarter than me me like they haven't heard of anything like this either so you are not alone in sort of being dizzied by the play-by-play here. Yeah and I want to talk about the characters of this saga like before we get into to what's actually going down here can you quickly set the scene set the stage and introduce us to the players who are in this family feud. Sure. So Rogers Communications Inc., the company founded by Ted Rogers,

who's the member of the family most people have probably heard of, he died back in 2008, but various members of his family stayed on the board of the company and still have some sort of say in how it's being run. So on the one side, the most prominent one on the business side of things would be his only son, Edward Rogers. You've got to build what is the best of today and try to future-proof it for what is the best for the next five and ten years. He basically has been chair of the company since his dad died.

And basically, he's taken a very keen interest in how the company's run. On the other side of the boardroom table, there's his own mother, Loretta Rogers. So that's Ted's widow. But reducing her to the role of wife is probably actually not doing her enough justice. She's actually sort of the co-founder of the company. She's the one who sort of bankrolled Ted back when this company was starting up in the 60s and 70s. There's also two more Rogers children involved here. There's Melinda Rogers, who has also had, you know, various jobs at the company the years, sits on the board. And then there's the other sister, Martha, who's been sort of mostly quiet over the years but has definitely stepped into the limelight in the last couple days. Yeah, and I definitely – we want to talk about Martha's Twitter feed in a bit.

But let's talk about what happened here more generally and back up a bit. As far as we know, at least, how did this saga kick off? How did it start? So sometime in September, there was a movement behind closed doors by Edward Rogers, who basically didn't like the direction of the company. So sometime in September, he sort of went to the chief financial officer of the company, which is a guy named Tony Staffieri, and said, basically, I don't like what the CEO, a guy named Joe Natale, is doing. I don't like the direction we're heading in. I like the cut of your jib. I'd rather you be the top guy. What do you say? It's sort of like a power play behind the scenes, except instead of making himself CEO, he was basically wanting to install the guy that

he trusted to sort of like run the executive side of things while he could sort of sit behind the scene pulling strings from the board level. I just wanted to talk more about this plot to oust the CEO, Joe Natale. It gets uncovered in a pretty ridiculous way, right? Yeah. If anyone's listening to this who's heard of this story already, I guarantee it's because of this part of it, which is, according to some excellent reporting from the Globe and Mail, Joe Natale, the CEO who's being targeted by Edward as sort of like wanting to get rid of him, he finds out about this because he gets a butt dial, if you can believe it, from Tony Staffigari. So basically, Tony, he accidentally calls the CEO, the guy he's trying to oust as CEO, therefore letting him in on this plan. I guess what seems so ridiculous about that part of it is that it's like, don't these guys run a telecommunications corporation? Like, shouldn't they know, like, how to not butt-tile somebody?

Right, not being able to use your phone properly is not exactly the best plan to paint yourself as the best person to lead a telecom company. But these things happen sometimes, right? I mean, like, we're all still been doing this pandemic for a year and a half, and we're all still muting ourselves on Zoom, we don't mean to be so. Yeah. Okay, so tell me a little bit more about what happens after the butt dial. So as soon as Joe Natale, the CEO, hears about this plan, he says, okay, I gotta fix this. He basically goes to the board of directors, which is this sort of like a group controlling the company and says, basically, I need a confidence vote. I've heard there's a movement to get rid of me. I need to know where I stand. Please let me know if I'm your guy or not. So the board, which has all these people on it, you know, Melinda,

Loretta, Martha, all these people we talked about before, they have a vote and they say, no, no, no, miscommunication, Joe. Joe, you're our guy for sure. That plan is not going to happen. We like you. You're the CEO. Staffieri then leaves the company a few days later. We don't hear publicly about this. He just sort of like leaves without much fanfare, which is like sort of a weird thing for someone as high up as that to leave the company without some sort of, you know, long period of warning. But that was the sort of first sign that something was happening behind the scenes when a CFO just leaves all of a sudden. Right. So the ouster fail CEO, Joe Natale, keeps his job and then stuff starts to really pick up.

What happened last Thursday? So obviously after this like plot came to light, it was a pretty tumultuous few weeks at the company. Yeah. And after this plot came to light, there was a regularly scheduled board meeting on the day that they released their earnings. And at that board meeting, the other members of the board basically had a vote to remove Edward as chair. So that's them basically saying, we didn't like that sort of thing you tried to pull. So as punishment, you're no longer the boss of this board. You're still on the board.

You still have a seat. You still have a say in what's going to happen to this company. But you're no longer the chairman of the board. Right. So then things get really crazy. Okay. So after Edward Rogers tries to get the CEO turfed, his sisters and his mom and the others on the board turn around and turf him. Yep. So that happens on Thursday, but he still does not take the message and still does

not give up. He basically is still saying, no, I'm right. The company's on the wrong track. I'm going to keep doing this. Edward comes out and says, these people who voted to remove me as chair, I don't recognize that. I'm getting rid of five of you. So he singles out five people on the board, none of which are in his family, of course. But he takes five so-called independent directors and says, I don't like you five. I'm going to put these five people into the board instead. Now he's able to do that because in addition to being on the board of the company, he's also the chair of the board of this trust, which actually controls the company. So when Ted died, he basically set up this unique structure so that the company would be a publicly traded company

on the stock market, but this sort of group, mostly of family members and a few other sort of ex-executives and like people around him would sort of have voting control, voting say over what happens. So like the Rogers family controls 97% of what's known as the voting shares of this company. So Edward says, I may be nominally sort of out as chair of the company, but I'm still in charge of this trust. And the trust is in charge of the company. And guess what? What I say goes. So he basically Friday night says, I'm naming these five people to be new directors.

Guess what? We're having a board meeting. And and lo and behold what a surprise at that meeting i've been named chair of the company again wow it's always sort of like battles for control at companies are always going to be fascinating it's just more fascinating in this one because the people who are sort of fighting with each other are members of the family and we never sort of get a sort of like a look through the keyhole at what happens there you know i've never in my years reporting seen a statement from a mother of someone saying how she's disappointed in her son's actions for what he's done but that's what we got last weekend from like loretta saying you know she called his board meeting invalid changes absolutely nothing he's put his

own interests ahead of those of rogers employees customers and shareholders i mean like this is you know i would not want to have my mom say things like that about me if I'd done something in my career. But this is a sort of strange state of affairs. I've never seen anything like it. So yeah, it's so bizarre. And, you know, I was talking to our team about this. And I was just saying, you know, my family's pretty dysfunctional, but this actually takes the cake. But I want to talk about Martha. So Edward's sister's Twitter timeline. I want to talk about her Twitter. This is the one who was tweeting about the Game of Thrones. And she tweets, quote, I see Ed has appointed himself the chairman. LOL. This should be taken as seriously as if he appointed himself the king of england end quote and she also tweets that their father ted rogers would be quote so disappointed to see how ed and his puppet masters are behaving destroying the company he built end quote so this is really messy stuff hey yeah i mean, you can tell from some of this stuff.

It didn't just happen in September. It wasn't some sort of sudden thing. I mean, they've sort of held it together previously, but they're tired of keeping their mouth shut. I mean, say this for Martha. She was actually probably the least well-known members of the Rogers family before this. If nothing else, she's found a great way to go from under 400 Twitter followers to like 12,000 in a matter of a week.

Because I saw this happening on Saturday afternoon, I think it was and I was like, well, I'm going to follow that. And I'm sure everyone else did too, right? Like you don't often get this sort of this inside dope on sort of, you know, family drama at such a huge scale with billions of dollars at stake. Yeah, definitely. You can see from her from her Twitter timeline, like this has been bubbling up for a little bit longer than the last few weeks. And I want to get to more of that mess in a minute, but I just want to make sure I'm up to speed here.

So last month, the chair of Rogers, Edward Rogers, again, tried to oust the company's CEO. His mom and sisters helped block this move and then turned around and helped oust Edward as chair. And then he goes and fires a bunch of the board, appoints new board members, and these new board members reinstate him as chair Sunday, despite the objections of his family. I just want to make sure I've got that right. You've got it. Okay, so wait a second. So who's the chair of Rogers right now? As we're recording this on Tuesday at around 1pm Eastern Time, who is the chair of Rogers right at this moment? So that is the $28 billion question. I mean, this is a company worth that much money. And honest to

God, I actually don't know the answer for you. And I've never seen the scenario where Friday got an email from the company saying, you know, here's our new chair. Edward's been turfed. A man named John A. McDonald has been named new chair of the board and everything's going to be fine. Two days later, different press release from a different person at Rogers saying, you know, Edward Rogers has said we've had this vote. He is now chair of the board. So I remember getting an email on Sunday afternoon and a subject line just said a message from the chair of Rogers Communications Inc. And honest to God, my first thought in my head was,

I wonder who that is. Like, I don't know which side this is coming from. Um, so yeah, basically there's, uh, there are currently two people with a sort of, uh, claim to the throne as chair of Rogers. It seems like Edward is in the lead right now, depending on who you talk to, and that, you know, he has a sort of sense of legitimacy, but like this fight is like far from over. So I can't honestly tell you who's in charge right now. Thank you. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization. Empowering Canada's entrepreneurs through angel investment and industry connections. Hi, it's Ramit Sethi here. You may have seen my money show on Netflix.

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financial vision together. To listen to this podcast, just search for Money for Cups. Wow, it's messy, but very and very muddy. And I want to talk about more of their dirty laundry airing. Another thing Martha Rogers tweeted about was what she called, quote, the truth about his Trump scandal. What is she talking about? What was the Trump scandal? So that came up earlier this year. I think it was about May. And May, when this happened, was a particularly contentious time. You know, they'd recently had the January 6th sort of riot in the Capitol. There was all this stuff about he was like disputing the election results. It's a rigged election. It's the only way we're going to lose.

Basically, it wasn't a very popular time to be associated with Trump. And at that time, most of the Rogers family are sort of fairly quiet on social media. But that is not the case for Edwards' family. His wife, Suzanne, is a very active philanthropist. It was the fifth Suzanne Rogers Presents gala, which brings some of the world's top fashion designers to Toronto for a special night with some of the proceeds going towards select children's charities. I started my first event with Oscar de la Renta, a truly memorable experience. And here I am, five events later, finishing up with Victoria Beckham.

Very involved in Toronto's fashion scene, gives money. She's very much a famous person in the city. And one of her Instagram stories, she basically showed off that the family was down there hobnobbing with the Trumps down at Mar-a-Lago and saying, this is so great. What a great party. Basically just didn't strike the right tone with sort of what was happening back at home. Didn't seem good. Well, like you and I were still like locked down from the third wave. I can't even go visit my grandparents. But here's this family out there flying down to go visit Trump and have a big party in Mar-a-Lago. It just sort of sort of tone deaf at the time. Right. Yeah. Of all the things. And on a different note of a different piece of dirty laundry, the star had a pretty

wild story on Monday about how Edward Rogers didn't want to keep Masai Ujiri in as the head of the Toronto Raptors. Tell me more about that. Yeah, yeah, that was a great story from the star on Monday. People like Masai Ujiri in this town. He basically took a franchise that was not doing well, turned him around, won a championship, brought us to the promised land. But we wanted to win in Toronto, and we have won in Toronto! Yeah! His contract was up to be in charge of the team,

and so, you know, as fans do, there were, you know, what if he leaves, what are we going to do? We like this guy, we like his strategy. Now, the Rodgers have a hand in this because, of course, they own the Raptors through their 37% ownership of MLSC, the company that owns the Leafs, the Raptors, all that stuff. And while every single fan in the city of Toronto was hoping, hey, man, just like cut a blank check for Masai, keep him around. Edward, it turns out, was apparently sitting there thinking like, I don't know, is this guy worth it? Like, you know, maybe we do someone better.

We could find this other guy. Instead of saying, look, thanks for what you've done. Thanks for the $500 million increase in the franchise value. Thanks for the championship. They're sort of quibbling over things that don't matter. It just sort of really, really had the sort of whiff of someone, you know, a guy born on third base finds the guy who just hit a home run and says, you're not worth the money.

That's not what fans wanted to hear, basically. Right. One of the assumptions was that maybe Martha, someone who was upset with the direction of the company and like what her brother was doing might have leaked that. She's insisting today on Twitter that was not her. No, no, no. It was someone else. Wasn't me. It does just sort of have the sort of feel of someone who sort of, you know, like had an ax to grind with Edward and was sort of keeping their mouth shut before, but like couldn't keep their mouth shut any longer. It's all coming out now. I want to talk a little bit more about how unprecedented this is. I mean, this whole public spectacle comes at a pretty significant time here. is trying to finalize a massive takeover of Shaw Communications. What are consumer advocates saying about what that merger would mean for the likes of you and me who are, you know, cell phone users?

I mean, Canada's telecom sector is dominated by the so-called big three. It's your BCE, your Rogers, and your Telus. Now, Shaw was the fourth biggest in that, so just outside. So Rogers buying one of the. Now, Shaw was the fourth biggest in that, so just outside. So Rogers buying, one of the big three buying number four, basically makes the consolidation even more. Less choice for consumers, less ways to get away from dealing with them if you don't want to. So they're trying to get this merger through, I think $26 billion is the price tag. So not a small deal, one of the biggest ones in the history of the country, we got to be. Ultimately, consumers are going to be a little bit wary about it. Because, you know, anytime one

company goes down, that's less competition, that's less places for you to go to. Who's to say whether this is going to be good for consumers or bad. Generally speaking, when a company spends $26 billion buying something, they don't tend to turn around and like lower their prices after that. So yeah, it basically, that deal was sort of facing an uphill battle to begin with, sort of winning over regulators on the hearts and minds of consumers like you and me. And I can't say that all this behind the scenes drama is helping it. The last time I looked, I think Rogers shares are worth less today than they were before all this. And that's pretty much the market saying like, we don't like what's happening here. Like you guys

are licensed to print money. We would rather not deal with this drama and uncertainty and just sort of say, let's just take this deal on its merits as a business. And yet I have to say from the outside looking in, I can't say I feel like I have much of a dog in this fight. And I wonder if you think most regular Canadians have much of a stake in picking a side here. You know, I saw a Beaverton headline that read, Rogers beset by power struggle between guy who will raise your cell phone bill and a guy who will raise your cell phone bill. I mean, do you see anyone really picking a side here? I mean, I think it's the succession analogies the HBO show seem not too

far off. It definitely has a sort of feel of family drama with much higher stakes and basically things that you and I don't get to see normally just sort of playing out in public. That was your best shot? You lost. I think there's some doubt as to whether he lost and Kendall, Frank, Asha,

Alona, off the board, fired with immediate effect. I don't think you're able to do it. Security! Generally speaking, people aren't sort of well disposed to the telecom sector in general. So it is sort of feel like you're sort of rooting for no one in this, right? It's sort of like you're watching this game between feudal lords trying to decide who's going to rule you. It's kind of hard.

No one's sitting there saying, I will do this and I will cut your cell phone prices. decide who's going to rule you. It's kind of hard, you know, no one's sitting there saying, I will do this and I will like cut your cell phone prices. Like that's not going to happen regardless. So it's a bit hard to sort of find a rooting interest. And it just sort of, yeah, it just sort of speaks to a sort of tone deafness of the principles involved, you know, for all the things going on in the world. They're wasting their time seemingly fighting over who gets to control this golden goose. Pete, thank you so much for taking us through this very wild ride.

Really appreciate it. Thanks for having me. So since my conversation with Pete, there's been yet another twist in this story. On Tuesday afternoon, Edward Rogers filed a petition with the Supreme Court of British Columbia for a declaration that his move to reconstitute the board is valid and legally binding, which would cement his title as chair. That filing claims that his mother, Loretta, and sister, Martha, had initially expressed support for replacing CEO Joe Natale with CFO Tony Staffieri, and that the board had initially approved Mr. Natale's retirement arrangements before a late September reversal that saw the board reaffirm Mr. Natale's

position and terminate Mr. Staffieri. By Tuesday evening, Loretta had responded saying, quote, the claims Edward makes in his affidavit are as unfortunate as they are untrue, end quote. All right, that's all for today. I'm Angela Starrett in for Jamie Poisson. Thanks for listening to FrontBurner.