The Paul Wells Show - The War Inside Rogers
Episode Date: March 20, 2024A new book takes us into the messy succession drama inside one of Canada’s biggest companies, Rogers Communications. It features family members fighting in public, two competing boards, and even act...or Brian Cox from HBO's Succession. Globe and Mail reporter Alexandra Posadzki’s book Rogers v Rogers takes us behind the scenes of a company trying to find its footing after the death of their founder, all while navigating a high-stakes business deal.
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A real-life succession drama
with a guest appearance from Brian Cox?
Congratulations on your real-life succession
at Rogers Communications.
And also having Joe Natale to fuck the fuck off.
This week, the author of a rip-roaring new book
about the power struggle at Rogers.
I'm Paul Wells, the Journalist Fellow in Residence
at the University of Toronto's Monk School.
Welcome to The Paul Wells Show.
For a few weeks in 2021, Corporate Canada was more fun than I've ever seen it.
The Rogers family was trying to decide who should run the Rogers Corporation,
and the way they did it was spectacularly public.
The company's CEO found out his job was in trouble from an accidental phone call,
which is surprising when you consider that these people run a phone company. The youngest of Ted Rogers' four children, Martha Rogers, challenged her own
brother Edward's decisions on Twitter, all while the government was deciding whether to approve
a $20 billion merger between Rogers and Shaw. Alexandra Posadzki had a front row seat to it all
as a business writer at the Globe and Mail. And now
she's written a best-selling book about the drama, Rogers vs. Rogers, the battle for control of
Canada's telecom empire. It's a fantastic guide to understanding one of Canada's biggest companies
at the most dangerous and ridiculous moment of its history. And yes, near the end, Brian Cox from the HBO show Succession makes
an appearance. I'm not even making that part up. We'll get to that before this strange tale is done.
Alexander Posatzky, thank you for joining me today.
Thank you so much for having me.
I want to first talk about the terrifying moment in every writer's life when they realize that they're going to be writing a book.
When did you decide this Rogers mess had gotten so big that the only way out was to write a book?
Well, to be quite honest with you, I was approached about writing a book by my agent, Martha Webb. And it was shortly after I had broken the story for the Globe and Mail about the alleged butt dial that had alerted the CEO of Rogers to the fact that
his job was on the line. And one of the things I learned, because I haven't been following the
coverage day by day, one of the things I learned is that the existence of the butt dial is hotly contested, but it's really not sure how Joe Natale learned that he was maybe for the high jump.
That's right.
several other directors of Rogers, is that Joe, and it turns out this was actually a butt answer as opposed to a technically a butt dial, is that Joe had called his chief
financial officer, Tony Staffieri, and Tony had allegedly inadvertently answered the call
while the phone was in his pocket while he's having this discussion about how he plans to reshape the
leadership ranks of Rogers Communications when he imminently becomes the CEO of Rogers. And this,
as you can imagine, comes as a shock to Joe, who thought that things were going quite well,
given that he had just signed a deal for Rogers to acquire for $20 billion Western Canadian cable company Shaw Communications.
This was the deal of Rogers' founder, Ted Rogers' dreams.
The whole family was aligned on the importance of this deal.
And then the other version that later has emerged is that, you know, Tony has denied the existence of a butt dial.
is that Tony has denied the existence of a butt dial. He did so in kind of a very specific way in the Toronto Star saying there was no call to Joe, there was no call by accident to Joe.
Some sources that I have spoken to have gone further than that and have essentially said
that they doubt that there was this inadvertent phone call at all, whether it
be a butt dial or a butt answer, and that Joe actually learned of the plan through some other
means, for instance, by monitoring Tony Staffieri's communications.
And all of that serves as a handy reminder that while this is an extraordinarily juicy business
story, almost every aspect of it takes a fair bit of setup before people can
understand why it was so astonishing that these people who run a phone company didn't know how
to use their phones. So let's back up a little bit. Why does Rogers matter in Canada?
Well, Rogers is a company that touches millions of lives, not just through their wireless and
cable offerings,
but also because they own media companies, they own sports teams, they own the Rogers Center,
where Taylor Swift will be performing soon. And it was really this company that was started by
Ted Rogers, who had lost his own father when he was young. And subsequently to losing his father,
his mother effectively sold off
the family's position in the family business and was sort of left with nothing. And so she instilled
in Ted this desire to bring the Rogers family name back into prominence. And so he, you know,
goes to boarding school and he grows up with this kind of singular goal of restoring the family name.
He goes and he starts building this company
first in TV and radio and then in cable and then has the brilliant foresight to get into wireless
while people still have a lot of doubts about wireless and essentially creates through this
mountains of debt, this investment grade company. And just to kind of set up the players a little bit. So Ted has four
children. The eldest of them is Lisa Rogers, followed by his first and only son, Edward Rogers.
And then we have Melinda Rogers and Martha Rogers. And as Ted is getting older, there's all these
questions swirling around succession. He's obviously this larger than life figure within Rogers. There's,
you know, jokes going around about how there's no decision at Rogers too small for Ted to make,
which is actually probably a bit of a truth more than a joke. And so everyone's wondering what's
going to happen to this company when Ted ultimately steps aside or passes away. And at the same time,
we see two of his children, that is Edward and
Melinda, kind of working their way up through the company into progressively senior roles. And so
within kind of the rank and file, there's this perception of a rivalry between Edward and Melinda.
And what Ted ultimately does is he decides that he's going to actually leave it up to the board to choose the next CEO of Rogers,
but he strongly indicates a preference for a non-Rogers family member, and that is the head
of the company's wireless business who becomes the COO, a man named Nadir Mohamed. And at the
same time, there's another succession for Ted to plan, and that is who will be the controlling shareholder of Rogers
Communications. Because, of course, Rogers has this dual-class share structure where they have
class A voting shares and class B non-voting shares. And the vast majority, 97.5% currently
of those voting shares are held within trusts that are controlled by the Rogers family. And so a successor has to be chosen there in terms of who will be the controlling shareholder,
the chair of the Rogers control trust.
And then if we fast forward a little bit, the company goes through a series of CEOs
before we land in the fall of 2021, where we have Joe Natale at the helm of the company,
Rogers having just signed this major deal to acquire Shaw, and this conflict breaks out.
So it's two succession crises in one, right? It's a battle over who's going to run the company
as CEO. And it's a battle over how the family is going to sort its influence at the board level.
And they play off each other. I mean, so it seems to me, once I get to the end of the story,
that Ted Rogers hoped that he could plan out his succession,
as founders always do.
But in fact, the fundamental decisions just ended up getting punted forward
a few years, really just a few years past his death.
And then they play out in this extraordinary real-time drama.
Yes, the situation that essentially was the worst case scenario,
the thing that Loretta says Ted would have, Loretta being Ted's wife,
that Loretta says Ted would have wanted to avoid at all costs,
which is this highly public, embarrassing dispute between factions of the family.
And the timing for an open family crisis could hardly be worse, because while this is going
on, Rogers is trying to merge with Shaw, a $20 billion deal that needs federal regulatory approval and, I mean, sort of depends on Rogers' ability
to pass itself off as a company that can handle
not just great responsibilities,
but greater responsibilities.
Meanwhile, they've got two really substantial
service outages and everyone named Rogers
is swearing at each other on Twitter.
It's not ideal.
No, and I think the timing is a really interesting point that you raise because, in fact, it's the timing that Edward uses to try to justify his desire to change the leadership of Rogers because he later states that he doesn't feel that Joe is the right guy to close the deal
and to integrate the two companies. And meanwhile, a number of other directors on the board of Rogers,
including ultimately three family members, they feel that this is the absolute worst time to
change the leadership of the company because not only are you changing the CEO, but you're also talking about, you know, replacing the vast majority of the company's senior leadership team right at this critical moment where they're looking to close this deal, this highly, highly symbolic and important deal for Rogers that the whole family is aligned on.
And it requires approval of not just one, but three government regulators. And so, you know, this is a time when Rogers should be kind of keeping its head down and focusing on getting this deal done. And instead, it's embroiled in this highly public battle that lands in a B outage. And then the other that's actually an entire service outage of cable TV, internet, and
wireless service, just as Rogers is asking the government effectively for permission
to become an even larger national coast-to-coast player.
One sense that I had of the scale of things is that for almost all of this story, I was
working for Rogers, right?
I was an employee of McLean's Magazine that was owned by Rogers,
that was part of a media division,
which Jonah Talley sells off at some point.
This doesn't even get mentioned,
I believe, in your book because it amounts to a rounding error
on a week's revenues
because the real game is bandwidth, smartphones.
I mean, that's where the real battle is.
Yeah, that's a really interesting point that you mentioned, having worked for Rogers yourself. I
think this is another thing to keep in mind for, you know, Canadians and potential readers of this
book is just, you know, when we talk about Rogers touching millions of people's lives,
this is a company that employs tens of thousands of people across its business.
And like you mentioned, they own media companies.
They did sell off their magazine division, but media is just such a tiny, tiny piece
of the pie compared to the revenues that they get from their wireless business and their
cable business.
And so we really are dealing with a very large and very significant company.
They're widely held by shareholders.
So I mentioned
the dual class share structure. You've got the class A voting shares, the class B non-voting
shares. Well, you know, the vast majority of public shareholders are, of course, class B
non-voting shareholders. But it's a lot of people, right? Like most people in some capacity are
invested in Rogers, perhaps through their pension fund or through
mutual funds that they own. Oh, yeah. And incidentally, this kind of striking revolving
door situation where they have four CEOs in succession, so to speak, after Ted's demise.
The only one I ever sort of met and had any conversations with was this character, Guy Lawrence, who perhaps mercifully for him was discarded as CEO before the real fighting began.
I mean, it's unusual for a corporation of this size to just rifle through CEOs as quickly as this one was doing for a bit.
It seems to have reached some stability now.
Well, that was certainly one of the issues
that Melinda raised when I had the opportunity
to sit down and interview her for The Globe and Mail
was that she firmly believed that there were advantages
to being a family-controlled company.
And the chief advantage, as she puts it,
is the ability to take a longer-term focus, right? So
when you look at public companies where you don't have a controlling shareholder, they're really
subject to the whims of the market. There's this real focus on the quarter-to-quarter bottom line,
and when you have a controlling shareholder, you can take this longer-term focus. And you saw this
with how Ted Rogers ran the company, right? He took on
big risks, even though he was widely criticized for some of the moves that he was making. He was
called a gambler because he was, you know, always betting the farm. And yet you look at how it
turned out. And, you know, he created this, you know, blue chip investment grade, stable, massive,
blue chip, investment grade, stable, massive, you know, telecom empire, telecom and media empire.
And, you know, what Melinda points to is the fact that there's been this turnover in the sort of upper ranks of the company in terms of the CEOs, right? We had Alan Horn,
the former chairman, be CEO on two occasions on an interim basis. We had Nadir Mohamed,
we had Guy Lawrence, then there was Joe Natale, now it's Tony Staffieri. And so she points out
that this kind of revolving door, it's not just the CEO, because with every new CEO, you also have
a whole new leadership team that's assembled, right? Every CEO comes in, they have their own
vision, they have their own plan, they want to put in their own team. And so there'd be these
periods of time in between CEOs, for instance, where you had these projects that have been going
on for a long time, and now they're just kind of shelved for a bit. You don't know whether to keep
working on it or whether it's going to go forward under whoever the new leader is. So this creates a lot of uncertainty within the rank
and file. So the central conflict, the conflict around which the butt dial or the butt related
conversation happens, is over whether Joe Natale will continue as CEO or whether Tony Staffieri
will be brought in to replace him. Staffieri had more history with the company. Natale will continue as CEO or whether Tony Staffieri will be brought in to replace him.
Staffieri had more history with the company. Natale had been brought in at the highest level
from outside, from another telecom, from Telus. Is this only about sort of spoils and personalities?
Is it about who gets to drive the truck or are there real different corporate philosophies?
Is it about who gets to drive the truck?
Or are there real different corporate philosophies?
Rogers run by Joe Natale for five or 10 years versus Rogers run by Tony Staffieri for five or 10 years.
Are they different companies doing different things?
Well, yes and no.
Because when you look at the telecom business, I mean, it's not an early stage growth industry
right now.
Like it's a pretty established industry. They've got
high penetration. So there are, of course, you know, differences in strategy, but I would say
the chief differences are essentially in execution, right? So you look at, for example,
the Shaw deal, everybody was aligned on the importance of the Shaw deal. Joe Natale wanted
the Shaw deal. Tony Staffieri wanted the Shaw deal. Every member of the Rogers family wanted the Shaw deal. And so you do have, you know, certain things where, you know, everybody
wants more wireless subscribers. They want higher profitability margins. They want lower churn,
meaning less turnover in the customer base. But some of the people that I spoke to who have since
left the company, they did feel that there were differences in the
organizations. They felt that Joe Natale was the kind of leader who really like cared about
employees and their development and that he was really focused on things like improving morale
in the call centers and improving customer service. And they felt that in contrast,
Tony Staffieri's Rogers was one that was too
financially focused, too focused on the bottom line, treated employees as if they were numbers
on a spreadsheet to be manipulated in order to make quarterly targets. And then in contrast,
if you speak to people in Tony Staffieri's current leadership team, they will say that Joe's team was not executing well,
that the company was lagging behind in a number of key metrics, and that now that Tony's in charge,
the company has actually regained its leadership position in those key metrics. And, you know,
this is essentially a business whose aim is to make profits for shareholders. And so, you know,
they would say that that is the correct focus. And Joe Natale, his tenure at TELUS before Rogers
kind of split the jury. Like people had very different recollections about what Joe Natale
was like as an executive at TELUS. Yeah. And that's one of the things that I find so fascinating about this whole story
is like, you know, you have CEO compensation
and you have all of these compensation consultants
who are, you know, all very smart and qualified people.
And yet when you actually look at measuring CEO performance,
you can have people so deeply divided
on whether or not a CEO is performing well. So you
have a situation like here you have with Rogers, where Joe actually is, you know, compensated well,
and he's told by the board that he's knocking it out of the park, or that he's doing well,
or that he's meeting all of the metrics. And then at the same time, you have a chairman
and several other board members who are unhappy with his performance. And so you have to wonder kind of what is happening there. Is he being measured by certain board members, perhaps in
a way that is different from the way that he's being measured according to the official metrics
in his performance review, right? Because he's been given good performance reviews. And it's
interesting because that is very similar to what he experienced at TELUS.
Now, a lot of the analysts that I spoke to actually said that Joe Natale was not in the
role long enough at TELUS in order to truly get a proper grasp of whether or not he was
performing in the role.
But then a number of other people I spoke to actually said that, you know, companies forecast out their financial results in advance and that the future projections
didn't look how they wanted them to. So there's a lot of kind of differing narratives here, right?
Some people speculate that perhaps Darren Entwistle, the former CEO of TELUS, simply wanted
his job back. And then
others would say that Darren just didn't feel that Joe Natale was up to the task of running TELUS.
And yet, Edward Rogers absolutely led the charge in terms of wooing Joe Natale over to Rogers
before souring on him later. Yeah. And in fact, there was a period of very tense negotiations with Talis over attempting
to free Joe from his non-compete prematurely. And in the end, there was an arbitration process,
and they did actually get to a deal that did free Joe Natale from his non-compete slightly earlier
than the actual length of the contract at a price. And there was this kind of view within Rogers that
the more that TELUS kind of fought to prevent Joe from starting at Rogers early, the more it
convinced the board members at Rogers that Joe was really valuable because why else would TELUS
be fighting so hard to stop their competitor from getting Joe Natale? At the end of the day, we're left with a little bit of mystery over whether Joe Natale was worth
the fuss. I wish him all the best. I don't know the guy. I'm sure he's wonderful. But the sort
of objective indices we have, it's not entirely clear that Rogers was right to want him as much
as they did. And it's also not entirely clear whether getting rid of him at that moment in time was the
right move or the wrong move, right?
People still to this day are divided on this.
And when you look at the performance of Rogers during the tenure of Joe Natale, you have
to keep in mind a number of various things that would be affecting the stock price, right?
So you had, for instance, the impact of the pandemic, which hit Rogers
disproportionately hard because Rogers has a larger wireless customer base than the other telcos. And
that base is largely concentrated in the GTA, where you had some of the strictest lockdowns
in the country. You had the company being in the midst of a lot of transformation. They had actually just made the move to so-called unlimited mobile phone packages. And they, you know, took a bit of a hit that they had
intended to be a temporary hit in order to make that transition just before this very unexpected
thing of the pandemic occurred. And then, of course, you had the fact that they had just struck
a deal to acquire Shaw. And so that deal is going to involve taking on debt there's a great degree of regulatory uncertainty it was
unclear at that time what concessions would have to be made as we've since seen of course rogers
had to divest shaw's freedom mobile wireless carrier and make certain other concessions to
the government in order to get that deal done and And so all of that is going to, of course, affect the stock price. So it's very hard. You know, one of the things
that I walked away from this research process with is this belief that as much as, of course,
yes, a CEO can influence execution and strategy, they don't simply have a magic wand that they can
use to make the stock price do what it
does. You have, you know, right now you have sector wide things going on, right? You actually have
high interest rates and that hurts the entire telecom sector across the board. And so there's
a lot of these other factors that play into the stock price if you're using that as kind of
the primary determinant of a CEO's performance.
Now, it becomes clear at a certain point that there's an open conflict over who the CEO should
be. And I think the four Rogers siblings surprised themselves by how stark the divisions are over how that's going to play out and by how sort of publicly they stake
out their positions.
I don't think they intended not to get along and suddenly they're very publicly not getting
along.
What was that like for them as far as you can tell?
I mean, I would assume that it was quite painful to have this kind of
a public rift in their family being essentially watched by the whole country. And it was dramatic,
as you say, right? It's very rare in Canada for us to see this kind of drama playing out within
this very wealthy, prominent and powerful family in such a public fashion, right? We saw
Martha Rogers tweeting disparaging things about her brother. And we also saw a number of previously
confidential family documents become public via the court filings that were made, for example,
Ted's will and his memorandum of wishes. Because of course, you know, this conflict over the
leadership of Rogers became so fraught that the Board of Rogers ended up voting to oust Edward
as chair. And what Edward ended up doing is going to the Rogers Control Trust, securing their
support, and then essentially deciding to reconstitute the Board of Rogers Communications to remove the five
independent directors who were opposing his attempt to make the changes to the leadership.
And so, and then a thing that was really shocking for a lot of people was the company then comes
out and says, you know, Edward, the way in which you've done this through a written resolution
without assembling all the shareholders for a shareholder
meeting, we don't think it's legally valid. And so the board of Rogers actually remains constituted
exactly the same today as it was yesterday. And we're just going to ignore this change and move
forward. And so I think for maybe the first time in Canadian business history, certainly as far as
me or any of my editors at The Globe are aware, you have this situation where you have two, hypothetically, you have two boards of Rogers, and nobody can definitively tell you
which board is the real board.
And at one point, they were meeting simultaneously.
The Rogers board and the family trust, the pretend board and the real board, as I thought
of them, but that was in conflict.
It wasn't obvious which was the real board.
Well, you had the Rogers Control Trust, and then you had the old board, and then you had the new board, right?
And so you did have these dueling meetings of the Control Trust and the board, the original board.
And that was kind of before this written resolution was submitted.
But yes, we did have this kind of situation that one of my sources has called Schrodinger's board, because you don't know which is the real
board. And this is why it ultimately lands in court, because Edward goes to the BC court.
Little known fact is that Rogers, despite being this Toronto headquartered company that is,
you know, sort of very prevalent in the very fabric of this city,
they're actually incorporated in British Columbia, which is
something that Ted had enacted for various reasons back in the day. And so what most people don't
know, and certainly I didn't know before all of this about the BC Corporations Act, is that it's
unique in allowing for this sort of a change for the board to be reconstituted through a written
resolution without a shareholder meeting.
Of course, the shareholder meeting is kind of a formality, right? Because Edward effectively
controls 97.5% of the voting shares of Rogers. So even if you did assemble all of the shareholders,
he would still be able to reconstitute the board. The difference is it would take him time.
He'd have to call the meeting. There'd have to be a notice period. And then at the meeting,
shareholders would have the opportunity to ask questions and ask for the rationale,
because at that time, Edward had said very little, if anything, really publicly about why he wanted
to change the leadership of Rogers Communications. And so, you know, some of the corporate governance
experts felt that, you know, a shareholder meeting would at least allow an opportunity for the issue to be discussed fulsomely.
On the other hand, Edwards Camp felt that the change needed to be made quickly because this whole two board situation was just too destabilizing to the company.
And Rogers competitors, namely Bell and Tellis, were using this whole situation to try to delay the Shaw deal. They were making submissions to the telecom regulator arguing that it shouldn't
approve the transfer of Shaw's broadcasting assets to Rogers' control over the assets because we
don't even know who's in control of Rogers. There's two boards. How can the regulator approve
a change in control at a time when it's so murky? And so
Edward and his camp felt this needed to be done quickly to get rid of this kind of uncertainty.
And the judge in BC ultimately did agree. But as part of that process, you know, we saw so much,
we saw these affidavits, right, from Edward's mother, Loretta, an affidavit from Edward. We
saw affidavits from members of the leadership team mother, Loretta, an affidavit from Edward. We saw affidavits from
members of the leadership team and, you know, a director of the company's lead director,
John McDonald, that all had dueling information, right? And people pointing fingers and going,
I disagree with most of what's written in this other person's affidavit. And so it made this
fight so very public in a way that we really don't see very
often in this country. And it addresses these larger issues around family controlled companies
in Canada, which we don't often talk about, even though we have so many of these companies in our
economy. Do you feel like you understand how these companies work better than you did? Or is it just one damn thing after another?
I mean, I definitely, writing this book was definitely an educational process for me in
terms of understanding dual class share structures, but also understanding corporate governance.
But there is still a lot that we don't see because one of the issues I've uncovered with
some of these dual class structures is essentially a
lack of transparency, right? Because in the case of Rogers, so much of what's happening is happening
within these family trusts. And these family trusts are not subject to the same disclosure
rules as, you know, the public aspect of the publicly traded company. And so you have this
unique situation where you do have a widely held publicly traded company. And so you have this unique situation where you do have a widely held publicly traded company,
but at the very top of it,
you have this Byzantine structure of trusts
where much of what is happening,
including changes to this 10-person advisory committee
that has ultimate control over the board of Rogers
is sort of shrouded in secrecy and in mystery.
I admit that it's not obvious to me how much transparency there should be around the inner
workings of a company.
I mean, private company gets to run its business and in a hotly competitive environment, some
of these decisions should reasonably be in the vault.
But it sure was fun to see all of that stuff get out of the vault.
Well, I mean, the
thing about Rogers is that it's a public company, right? It's not a private company. And so you have
public shareholders. And as an investor, don't you feel that public shareholders, the ones who
don't have a seat at the table, they don't have a vote, right? They don't get to weigh in on these
major decisions. The only way that they can vote is effectively through their decision to buy and sell Roger's stock.
And how can they do that properly if they don't have access to the same level of information as other shareholders, if they don't really know what's happening?
So this starts to get into policy questions.
And I was tremendously entertained by the frequent appearances of
three politicians, two of them former politicians and one of them practicing. Francois-Philippe
Champagne is the industry minister, and this was his problem for a while. But also David Peterson,
who hasn't been the premier of Ontario for 30 years, but was prominent on the Rogers board.
And John Tory, who was the sitting mayor of Toronto while all this was happening, and yet was very much active in trying to resolve
this dispute. What can you tell me about Peterson and Tory? Yeah, so Peterson, as you've noted,
has been on the Rogers board for quite a while. So he sort of played this role of elder statesman
on the Rogers board. And he was actually kind of ready to step down because he was technically originally an independent director.
But there's, you know, this understanding in corporate governance that if a director has been on the board for a certain period of time, they kind of lose their independence.
Right. And so he felt that it was kind of time to move on, but he ended up ultimately staying because another independent director left the board also amid sort of conflict on the board with Edward in particular.
So Peterson decides to stick around.
And then ultimately he ends up being the guy who stands up and says, you know, I don't agree with what's going on here.
Right. stands up and says, you know, I don't agree with what's going on here, right? He's the one who
gives an impassioned speech talking about how this process through which Edward, in certain people's
minds, had fired Joe Natale was unacceptable. He calls it deplorable. And Peterson is the only
person who actually votes against a motion that would accept Joe Natale's retirement on certain terms. So he
becomes very instrumental to how this whole thing kind of unfolds. John Tory, on the other hand,
so he's not on the Rogers board presently, but he is on the advisory committee. And he had made
a promise to Ted that he would try to help the family
once Ted was gone and so he does like as you mentioned play this very significant role
attempting to mediate this whole dispute and ultimately when the advisory committee
votes to well votes on whether they should restrain Edward's powers as the chair of the
control trust, thus blocking his ability to reconstitute the board, a vote that ultimately
fails. John Tory does vote with Loretta, Melinda, and Martha in order to try to stop Edward from
reconstituting the board, I guess, in the hopes of finding more time to kind of resolve this whole
conflict. So
they do both play a very significant role. And I think the fact that we have these politicians
involved in this whole thing actually just kind of is a perfect example of how cozy the Canadian
business world really is. And then there's the federal government watching all of this,
as mystified as some of us are by what's going on
and trying to have some influence, especially you've got Francois-Philippe Champagne making
it super clear that these service outages are not acceptable, although saying that doesn't
constitute a fix. I guess I'll ask you, what is the federal government's role in general?
And what does this teach us about the sort of eternal question about whether we have
sufficient competition and sufficient number of players in the telecoms market in Canada?
So Champagne's role in all of this is essentially that he is the regulator who has to approve the
transfer of Shaw's wireless licenses to Rogers. And he comes out with a
statement and says that he will not approve a wholesale transfer of all of Shaw's wireless
licenses to Rogers. And this is ultimately what prompts Rogers to go and start looking for a buyer
of Freedom Mobile. So what's kind of interesting from a competition perspective here
is when you look at Rogers and Shaw, they didn't actually compete directly with one another,
at least not on their cable business, because Rogers founder Ted Rogers and Shaw founder J.R.
Shaw, they actually sat down many, many years ago and effectively decided to carve up the country into East and West
with Rogers dominant in the East, Shaw dominant in the West. And so there's effectively no overlap
between their cable footprints. The area in which they do compete, of course, is the wireless sector
because Shaw, of course, is the owner of Freedom Mobile and Freedom Mobile, Canada's fourth largest
wireless carrier, is seen as a
particularly significant competitor because they've sort of been the scrappy fourth carrier
that's been credited with driving prices down. They're the kind of alternative to the three-player
market. And this was kind of the crux of the competitive issue for this deal was the idea of
Rogers acquiring Freedom meant swallowing up
the fourth largest carrier. Then we go from four wireless carriers down to three, essentially.
And this flew in the face of years of policymaking, not just by the liberal, but also by the
conservative governments who had done various things over the years to try to encourage
the emergence of a national fourth carrier. And so ultimately, it's Champagne who comes out and
says, no, we still want to have a fourth carrier, we don't want to lose the fourth carrier. And so
that essentially forces the sale of Freedom to Quebecor's Videotron. But that doesn't satisfy
Competition Commissioner Matthew Boswell. He still feels that this deal is too anti-competitive. He's concerned
that separating Freedom from Shaw's infrastructure and from other support that Shaw offers to Freedom
will weaken it. He doesn't believe that Quebecor is necessarily the right buyer or that they're
not necessarily going to be able to compete as aggressively as Shaw was able to with Freedom. And so he moves
to block the deal. And this, of course, plays out over the course of a month in front of the
competition tribunal, who ultimately overrules the competition bureau and says, we think the
deal will be good for competition. We think that Videotron is an adequate buyer for the asset. And, you know, we see the deal close.
There's one more name I want to throw into the mix and it's Brian Cox.
At the very end of the story, this goes from being a story that everyone says is a succession story
to one in which Brian Cox, the star of succession makes an appearance. What the hell was this about?
Oh my gosh. Yeah. So for me, this was such a surreal moment because, of course, while I was covering this whole saga,
at the same time, the third season of Succession was actually airing live on HBO. You're seeing
these two fights literally playing out at the same time. And then shortly after the holidays, so I think it was in early 2022,
like in January, this video surfaces. And to explain this video, I have to explain Cameo.
So this website called Cameo, many people have probably heard of it where you can go online and
you can buy a personalized video greeting from celebrities who are offering
their services on Cameo. You send them a script and they will read this greeting for, you know,
your family member or your friend wishing them a happy birthday or Merry Christmas or congratulating
them on an achievement or what have you. And so somebody purchased a Cameo video from Brian Cox
who plays Logan Roy, the patriarch on Succession, congratulating Edward
Rogers on his real life succession at Rogers Communications and on getting Joe Natale to
F the F off. And we got a copy of this video. We ran it on the Globe and it attracted a lot of
attention, as you can can imagine because this is the
first kind of moment where like the walls between fiction and reality are just crumbling down right
you no longer have the separation between these two storylines anymore and what's interesting is
the existence of that video and the fact that it became so widely disseminated actually is a point of contention
in Joe Natale's legal battle with Rogers Communications, which is still ongoing,
where he talks about how this video was essentially created to disparage his reputation,
and many of his friends and professional contacts wound up seeing it.
At the end of the day, you are left with a reinforced sense that these very large companies
with a million moving parts are still very human stories with all of the absurdities
and fallacies of any human activity.
Yeah.
I mean, I think this is something that's often overlooked when people think about business
stories, right?
As you think about a business as this kind of faceless corporation, But, you know, the people who run businesses are
humans and the people who work in those businesses are humans and the customers who are touched by
those businesses and who provide the profits to those businesses are humans. And so I think all
business stories have personalities and human elements. But I think that that is particularly
true when you look at family controlled companies, because you have individuals with an outsized level of influence over those companies.
And when you look at Rogers in particular, you know, when I was working on this story, people would ask me, like, are you writing a family story or are you writing a business story?
And I would say, well, both, because how do you separate the Rogers family from the Rogers business?
You can't.
The two are so tightly interwoven.
Well, one thing we couldn't have done without was a well-informed tour guide, and that's
you.
The book is called Rogers vs. Rogers, Alexander Posadzki from The Globe and Mail.
Thanks for writing it, and thanks for walking us through it.
Thank you so much for having me on your show. I really appreciate it.
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