In the wake of a sustained decline in its stock price and facing pressure to step up its advanced-services rollout, Classic Communications Inc. last week revamped its management team with the resignation of long-time president and CFO Steven Seach.
Seach, who joined Classic in 1992, left the company to join Austin, Texas, venture-capital firm Austin Ventures as "entrepreneur in residence."
Classic said it would split Seach's duties between COO Dale Bennett, who will assume the president's role, and John Geisler, a partner and CFO of Brera Capital Partners.
Geisler will serve as interim CFO until a permanent replacement is found. Brera Capital is one of Classic's largest investors.
Jeffrey Garvey, a founding partner of Austin Ventures, has also resigned from Classic's board of directors.
Classic also said it named former Prime Cable executive Dan Pike to the newly created position of chief technology officer.
The MSO, which operates in mainly rural markets, has been under fire lately for a sluggish digital rollout and increased competition from direct-broadcast satellite providers. Classic's stock also has been hit hard, declining to under $5 per share from its December initial public offering price of $25 each. Classic shares closed unchanged at $3.63 each on Nov. 30.
"Today's announcement reflects my decision to actively pursue a variety of entrepreneurial opportunities at one of the country's premier venture-capital firms," Seach said in a prepared statement. "Classic's management team has never been stronger and more focused."
Bennett joined Classic in April as COO and had been instrumental in its rollout of digital cable and high-speed data services, Belisle said in a statement. Prior to joining Classic, Bennett served three years as vice president of AT&T Broadband's Texas Metro Region. He also has held several other positions throughout AT&T Broadband, including vice president of its Southwest division in Walnut Creek, Calif., and vice president of its Denver-based National division.
Pike was senior vice president of science and technology and CTO at Prime Cable for five years and had held various technological positions at the company since 1977.
"We are very excited to have someone of Dan's experience join the Classic management team as we move forward making the critical decisions relating to the upgrade of our systems to digital- and data-ready broadband platforms," Belisle said in a statement.
In an interview, Pike said his first priority would be to "shape the capital expenditure approaches" at Classic.
"I don't know if you should expect dramatic widespread changes, rather than a constant tuning process," he added. "In the digital world, a new and different solution comes along."
Pike said his role would not be to set Classic's digital agenda, but rather to advise Belisle and the rest of the management team on a technical strategy and "help the company maximize gains through the use of digital technology, including the strategy on upgrades and how to implement the digital platform."
He has his work cut out for him. Classic embarked on an aggressive marketing plan aimed at bringing in new digital subscribers to its AT&T Broadband-provided Headend In The Sky digital platform early in the third quarter that had showed some preliminary results.
In June, it launched a new limited-basic tier for $15 per month and repackaged and relaunched its digital product. The company finished the third quarter ended Sept. 30 with about 11,200 digital customers, surpassing its targets.
But the company is still losing subscribers to DBS, albeit at a slower rate. According to its third-quarter results, Classic lost less than 1 percent of its subscribers in the period, or about 3,000 customers.
ABN AMRO Bank cable analyst John Martin said operators that serve rural subscribers face unique challenges in the industry.
"Other large MSOs are trading at a premium vis-à-vis small rural operators," Martin said. "Obviously the most basic question is, 'Do they have the capital to implement their upgrades?'"
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