Jim Shaw's younger brother is taking over the helm of Shaw Communications Inc. as the Western cable giant launches an ambitious expansion into broadcasting and wireless.
Brad Shaw, more understated than his scrappy elder brother, will become chief executive officer early next year, the Calgary-based company said Friday as it announced Jim Shaw was resigning after 12 years in the position.
The new CEO is coming in as the company founded by father JR Shaw enters a new era, with the takeover of the television assets of CanWest Global Communications Inc. and plans for a wireless network late next year.
As a team is built to manage the new TV and wireless businesses, Jim Shaw said in an interview, it was the right time to hand the reins to his brother to guide those changes from the beginning.
"If I [stay on as CEO]it's just going to be for a couple of years, maybe three or four years, but it's better to have somebody that builds [the media business]" he said. "Whereas I've already done my building. And now it's his turn, so that's okay."
Jim Shaw will remain with the company as vice-chairman of the board of directors.
"We decided that we should be proactive and make the decision while my father and I and Brad were all okay, and everything was copasetic," he said. "Nobody has to leave, nor do they want me to leave; they don't want that. But it's more of an orderly transition."
Jim Shaw is the gregarious farm kid who grew up scrapping in the schoolyard and, as CEO, always enjoyed taking on regulators if he disagreed with them. Brad, the taller, thinner younger brother, is more understated, though he gets animated talking about cable boxes, subscriber growth and wireless potential.
The succession plan has been in the works for about a year, Jim Shaw said, and the company has been working to give his brother more visibility. Brad, 46, has been appearing at industry events, and has been more vocal on conference calls. At the Canadian Radio-television and Telecommunications Commission hearings into the CanWest deal last month, Brad answered more questions than usual.
"It's not a surprise, and it's not indicative of a major change in the company," said one industry analyst. "This is old son out, young son in, everything else stays the same. The key operating guys who make the trains run on time stick around, and most importantly perhaps, the dad sticks around."
The announcement on Friday also followed the company's fourth-quarter earnings, which showed a decline in profit compared with last year.
"It's going to be a difficult period until they launch wireless. That's when they will have the fourth leg of the chair to support future growth," said Maher Yaghi, a telecom analyst with Desjardins Securities in Montreal. Brad Shaw will have to focus on competing with Telus as it improves its Internet-protocol television (IPTV) service and bundling offers for subscribers. "It's putting more pressure on Shaw to give more promotions to keep their customers. And that leads to sometimes misses on the top line like we saw today."
"It's hot and heavy out there," Brad Shaw said of the competitive landscape during a conference call with analysts Friday. "We believe there's … opportunities to ensure that [we]continue to compete and continue to make sure that there's a balanced approach to the market. … We all have the technology. We all have the money. We all have the commitment. So it's a matter of working to win that game every day."
Like Jim, who learned the ropes from the bottom up at the company, starting out driving a cable truck, Brad worked his way up through the management ranks by starting small. He was hired in 1987 as a customer service representative, and in his early days at the company Brad was sent to manage the company's operations in Hinton, Alta., an outpost near the Rockies that had four staff members.
From there, Brad took on more responsibility within the family business as a systems manager and then vice-president of operations in British Columbia, New Brunswick and Nova Scotia. He took charge of the company's satellite business, Star Choice (now known as Shaw Direct) in 2000, and became senior vice-president of Shaw's cable business in 2004. He was appointed executive vice-president of the company last February.
"You've not got a big spoon in your hand sitting in some desk doing nothing. I've seen too many family members in other companies doing that," JR Shaw said in an interview Friday. "You need to know the business … whether it's putting in the wire and installing it from a construction point of view, or going to the house, or answering the phone."
As the patriarch who founded Shaw Communications, JR's strategy has always been to hand the reins to his children. Jim, who is 53, took over from his father as CEO in 1998. Since then, he has overseen the 1999 spinoff of the company's broadcast assets into Corus Entertainment Inc. and, more recently, the $200-million purchase during the federal government's spectrum auction to prepare for the launch of a wireless network. And in May, the company announced the CanWest deal.
The company released its fourth-quarter earnings on Friday morning. Shaw reported profit of $121.6-million, or 28 cents per share, in the quarter ended Aug. 31, which was down slightly from year-ago earnings of $124.2-million, or 29 cents per share.
Revenue for the quarter totalled $938.9-million, and increase of 7.6 per cent from $872.9-million last year.
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