Rob Marcus didn't spend sleepless nights as a child wishing to be the chief financial officer of the second largest cable operator in the country. But it's not a dream for the nine-year veteran of Time Warner Inc. and Time Warner Cable. It's about to be reality.
Marcus, currently senior executive vice president at Time Warner Cable, will become CFO of the cable company in January. And though he has worn several hats in various management jobs at both TWC and parent Time Warner Inc., one moniker has stuck with the fast-talking, sharp-witted, Merrick, N.Y., born-and-bred executive throughout his career. Dealmaker.
A lawyer by trade, he joined Time Warner Inc. in 1998 after seven years at the New York law firm Paul, Weiss, Rifkind, Wharton & Garrison, then Time Warner Inc.'s principal advisers on mergers and acquisitions. As a result, Marcus has had a hand in virtually every M&A deal the media giant has done during his tenure.
And the list is impressive — beginning in the early 1990s with the creation and eventual unwinding of Time Warner Entertainment, the complex and sometimes controversial partnership with Toshiba, Itochu and US West, established initially to help pay down debt from the 1990 merger of Time Inc. and Warner Communications.
Among the deals on which Marcus's fingerprints can be found:
- Time Warner's joint purchase of Adelphia Communications with Comcast for $17.6 billion;
- Time Warner's sale of its Warner Music Group division to a group led by former Seagram CEO Edgar Bronfman in 2004, for $2.6 billion;
- The sale of TWI's CD and DVD manufacturing division in 2003 for $1.05 billion;
- The sale of TWI's 50% of cable channel Comedy Central to partner Viacom in 2003 for $1.225 billion.
Marcus said in an interview, however, that he never truly aspired to be CFO — or any of the other positions he has held at the company for that matter. But he sees the progression as logical.
“I've always really risen to the challenges that were presented to me, did the best job I could and then tried move on to the next thing,” Marcus said. “I would characterize the CFO challenge as the next in a series of challenges.”
Those challenges are mounting. Time Warner Cable, which became a separate public company in March, is still majority-owned (84%) by Time Warner Inc. The second largest cable operator in the U.S., with 10.3 million subscribers, TWC, like its counterparts in the industry, has struggled recently with basic-subscriber losses, increased competition from telephone companies and satellite TV and a rapidly declining stock price. In fact, speculation has been rampant that Time Warner Inc. could reduce that stake further (possibly even below 50%) in the not too distant future, making TWC more of a pure-play cable stock.
While Marcus can't talk about his strategy as CFO until he actually gets the job, the longtime executive knows one thing: He will have a seat at the cable company's decision-making table.
“What it's really about is I want to be one of the guys who run this company, understanding of course that [TWC CEO] Glenn [Britt] ultimately runs the company,” Marcus said. “That was the deal that led me to cable in the first place, and it is what has led me to be involved in virtually every decision we make here at corporate.”
Marcus cut his teeth as one of the chief architects of Time Warner Entertainment, both while he was at Paul, Weiss and during his tenure at Time Warner Inc.
The TWE partnership — which pumped needed money into Time Warner Inc., but came under fire for its vast complexity — was eventually unwound in 2006 and was a key component in Time Warner Inc.'s joint purchase with Comcast of Adelphia Communications. Comcast, through a series of deals of its own, had inherited U S West's portion of the partnership years earlier.
The Adelphia deal took more than a year to close. At times, Marcus said, it looked like it would never happen — he called it the “triple lindy,” referring to the nearly impossible dive made by Rodney Dangerfield in the movie Back to School. But in the end, the Adelphia acquisition bolstered TWC's subscriber base by about 3 million customers and secured it as the dominant cable company in the top two advertising markets in the country — New York and Los Angeles.
TWC has had some difficulty in integrating the Adelphia markets, with subscriber losses continuing to mount in Los Angeles this year. But the deal also led to others with Comcast.
Marcus was reluctant to call Adelphia or even TWE his crowning achievement, but others point to them as clearly important deals in Time Warner's storied history.
“To this day I think the resolution of TWE was attributed to Rob,” said former Time Warner CFO Richard Bressler, the man who brought Marcus to Time Warner in 1998. “In my mind, if you did nothing else in that job but unwind that, you've earned your keep.”
Bressler, who left Time Warner in 2001 and is now a managing director at Boston private-equity firm Thomas H. Lee Partners, said Marcus has an uncanny knack for breaking down complicated transactions into an understandable form, a skill that he said will help him in his new role.
“This guy's got game,” Bressler said.
While he is well-known in dealmaking circles, Marcus is practically a ghost to the investment community. Several cable analysts contacted to comment on the incoming CFO declined because they simply didn't know him. Marcus hopes that will change quickly.
“My hope is that [my] reputation has some legs,” Marcus said. “We're going to proactively make sure that I get out there. I'm hopeful that the skills speak for themselves and, over time, people are going to get comfortable.”
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