ST. LOUIS -- The interim president and chief executive officer of Charter Communications Inc. is pledging to grow existing markets in an effort to turn around the cable TV company's finances.
Robert May replaces Carl Vogel, whose resignation was announced by the suburban St. Louis company on Tuesday. May, a Charter director, is chairman of the rehabilitation services giant HealthSouth Corp. Vogel's resignation came in the wake of big losses in 2004 as Charter struggled with more than $18 billion in debt. Vogel also gave up his seat on the board of directors.
May, 55, previously was chief operating officer and a board member for Cablevision Systems Corp. from 1996 to 1998. Before that, he spent 20 years at Federal Express Corp. in a variety of senior management roles.
"You need to have huge amounts of credibility with your customers that you know what you're doing and that you're doing it well," May said in a telephone interview. "That's key to any business, but especially when you're delivering communications.
"I think over the recent past we have not always lived up to that expectation."
Charter shares dropped 13 cents to $1.92 in trading Tuesday on the Nasdaq Stock Market -- below its 52-week closing low of $2 a share.
Charter, which is controlled by Microsoft Corp. co-founder Paul Allen, said Vogel's departure was part of an agreement "reached mutually" by Vogel and the board. Vogel had been CEO and president since October 2001 and his contract was due to expire at the end of this year.
The board has formed a search committee to find a permanent president and CEO. May would not say if he will pursue that job.
"I'm totally focused on getting our new agenda put into place," he said.
RT Jones analyst Juli Niemann wondered if May would be a long-term fit for Charter.
"He's not known as a turnaround artist, he's the one who gets things back on track and running again," Niemann, of St. Louis, said. "Charter needs a turnaround artist. This is a company in real distress."
Charter grew rapidly in the early 2000s, but accumulated large debt along the way. May declined to speculate on future expansion, but said his focus will be on growth within existing markets. Charter has about 6.3 million cable subscribers in 37 states.
In addition to cable TV, Charter offers high-speed Internet, video on demand and other products.
"Part of Paul Allen's vision is we have delivered some really neat technology, some of it ahead of its time," May said. "The part that needs significant improvement is how do you execute on delivering those new technologies.
"The critical thing right now is to take what we have, do a candid assessment of where we can improve, and really drive those markets."
Charter lost $4 billion, or $13.38 a share, in the first nine months of 2004 in part due to a big charge to reflect lost value of some assets.
It warned last fall it may need extra funding to repay debt maturing in 2005 and 2006. Charter had debt of $18.5 billion as of the end of September.
Meanwhile, three former Charter Communications executives have pleaded guilty to charges arising from a scheme to defraud investors by inflating subscriber numbers. A fourth awaits a federal trial in February.
Allen, chairman of the Charter board, said May's role as a director made him familiar with its business and said his appointment "provides leadership and stability" while management and the board work a growth plan.
Vogel came to the company from Liberty Media Corp., where he was senior vice president, as well as CEO of Liberty Satellite and Technology. Previously he was an executive of AT&T Broadband and Internet Services. He had also been CEO of Primestar Inc. and Star Choice Communications and president of EchoStar Communications.