It allegedly started with a butt dial that led to a very dramatic and very Public Power struggle for Rogers Communications it was compared to the TV show succession as family members fought for control and for the future of Canada’s telecommunications Empire Rogers has more than 11 million
Customers and last year raak in over $19 billion in Revenue Alexandra patski has been breaking news on the Roger story since it started she covers the Telecom industry for the globe and she just published a book about this called Rogers versus Rogers the battle for control over Canada’s Telecom
Empire Today Alexandra joins us to talk about the Saga that pulled the Rogers family apart risked a 20 billion deal and what it all means for the industry today I’m man ramman Willams and this is the deciel from the globe in mail Alex thanks so much for being here
And happy book launch week thank you thanks for having me always love to be on the show so before we get into the story itself there there is a lot going on here so I think we should maybe just set up who the main players are in this
Story so so who do we need to know about here for sure so the first person that we all need to know is Ted Rogers the legendary founder of Rogers Communication a Visionary entrepreneur who built this company from essentially nothing into a massive uh Telecom and
Media Empire and in addition to Ted we have his wife Loretta and Rogers who bankrolled his business ventures and you know personally paid for the first bits of uh cable to be laid uh and then Ted and Loretta have four children so the eldest of their children is Lisa Rogers
Followed by their first and only son Edward Rogers followed by Melinda and lastly Martha okay okay so that kind of sets out the family structure here and of course they’ve all been involved in the company somewhere or the other some more than than than others um but big changes were
Kind of happening after Ted Rogers died so this was in 2008 what did that mean for the company yeah so let’s back up for just a quick second and talk about uh Edward and Melinda because these are the two of the Rogers children who kind of took
Uh the greatest interest in the company uh were both working their way up through the company over the years and many within the company’s ranks sort of perceived there to be a rivalry between them but there were always these questions kind of swirling around succession because Ted was this Larger
Than Life character there were you know jokes within the company that there was no decision at Rogers too small for Ted to make and what ended up happening is that rather than passing the reins to either of his children um Ted ended up leaving it up to the board to decide who
Would be the next CEO of Rogers but he indicated a very strong preference for the head of the wireless business a man named nadir Muhammad who was not a Rogers family member and that is indeed who the board selected to be the CEO I think let’s just take a second
Here and kind of establish some some of the basics here again before we we get into the heart of it um since Ted Rogers died how how does control of the company work cuz I understand there’s a control trust how how does this work so Rogers has what’s called a dual class share
Structure and so there’s two classes of shares you’ve got your class A shares which come with 50 votes each and then you’ve got your class B shares which come with no voting control over the company at all okay and 97.5% of these voting Class A Shares are
Held within trusts that are all overseen by the master trust the Rogers control Trust which is controlled by the Rogers family and close family friends so this basically ensures then that the family will always have control then of the company and that is exactly the goal
That Ted had was to M ensure that his family maintained control over Rogers for as many generations as Canadian tax law would allow okay all right so that’s kind of the backdrop to what happened uh and then we get to fall 2021 where where things kind of begin here and this whole
Thing apparently started because of an inadvertent call a butt dial if you will so so what happened there Alex yeah so the butt dial is the subject of some dispute um you know in one version of events this is um Joe natal’s version of events he Nataly is the CEO at the time
That’s right Nataly is the CEO and uh he’s you know sitting at home he calls his Chief Financial Officer Tony staffieri and uh Tony who is sitting in front of the Four Seasons where he and his wife own a condo he’s chatting with a guy who used to be Rogers general
Counsel his phone uh allegedly answers the call while it is in his Blazer pocket and he’s unaware of this uh at the precise moment where he’s discussing his plans for how he will remake the leadership ranks of Roger Communications when he imminently becomes the CEO okay
So I mean I imagine that was pretty shocking to Joe natal the current CEO to be hearing that then with this kind of inadvertent call one would think I mean as far as I know and as far as my reporting has been able to reveal Joe thought that everything was going quite
Well obviously um there were some tensions between him and Edward who is the uh controlling shareholder and at the time the chairman of the board but you know he felt he had the support of Melinda and Loretta and other directors he had just uh gotten this big takeover
This 20 billion dollar deal to acquire sha Communications Inc which is you know the the deal of Ted rogers’s dreams and I guess I should say so there is another version of events which is that natal learned of this plan through some other means perhaps um by looking through
Tony’s emails or perhaps it was leaked to him by another board member uh for instance Melinda um but through whatever means he learns of this plan he learns of this plan and he goes and takes this to the independent directors who sit on the Rogers board as well as ultimately
To Edward himself and he says well I would like to fire my CFO because I do not trust Tony staffier this guy who plans to take over my job and in a meeting with Edward this is where Edward says to him well don’t blame Tony this
Wasn’t Tony’s plan this is my plan and I do not agree to fire Tony oh and Joe essentially gives him an ultimatum he says well it’s going to be either me or Tony and Edward says well I would be happy to work with you on an exit package okay okay so they’re making
Moves to have Joe natal leave his position at CEO uh but then there’s this really dramatic meeting that that takes place so so what happens here Alex so several of the Rogers family members begin to have a change of heart primarily Loretta Rogers the Rogers family matriarch and her youngest
Daughter Martha Rogers who initially seem to be you know in agreement with Edward and then they start to feel that the independent directors have a very different view of Joe natal’s performance as CEO than the one that they had been presented by Edward and one of Ted’s longtime lieutenants and so
This all comes to a head at this this next board meeting where Edward is talking about you know moving forward and we’re going to get Tony in this role and then one of the independent directors says hold on we have a better idea and he passes the floor to Martha
Who reads out this resolution that essentially resends Joe’s quote unquote retirement wow and fires Tony staffieri and puts a bunch of ring Fen around Edward to curb his alleged interference with the company’s management okay so this meeting is happening Edward thinks this you know we’ve got the plan we’re going to kind
Of make this this announcement but then somebody else stands up and says wait a minute let’s do something different and all these other people are backing this other plan and so that’s what ends up happening that’s right and there’s a press release that comes out saying Tony
Stafy is gone as CFO of Rogers effective immediately and Alex this is really the first time the public is hearing anything about this right exactly so all of this has been kind of quietly Brewing in the background but it’s this press release that kind of goes off like a
Grenade on Bay Street because Rogers is in you know the midst of trying to get approval for this massive deal and now all of a sudden they’re parting with their Chief Financial Officer and they’re not giving any reason for the departure and it’s not like a transition
Right it’s not like this guy’s retiring and it’s going to be over the next six months it’s like no he’s gone effective immediately somebody else is in in his place and uh and so everyone’s kind of going what the heck just happened here and it actually took us quite a while at
The globe to um crack this open um roughly a week before we were able to report like what had really happen here behind the scenes so I mean this seems like a really big blow to to Edward Rogers right his plan to oust the CEO didn’t didn’t work uh how how did he
Take that so Edward um essentially struck back by deciding that he would fire the independent directors who had gone against him and so he starts to put a plan in motion that will essentially remove them um and at the same time as soon as the F the other family members
Learn of this plan they decide that they’re going to remove Edward as the chair of the board and so these kind of two things are happening in parallel with one another so I mean in in essence like are there like two like two boards happening here like how is this working
So what ends up happening is that Edward decides that he’s going to uh change the board through through a written shareholder resolution which has essentially never been done as far as we know in Canada I don’t know if it’s really ever been done anywhere to have such a major restructuring of the board
Without holding a shareholder meeting so there’s a little doubt that Edward as the controlling shareholder has the ability to reconstitute the board of Rogers Communications but the part that’s unusual is that normally you would have to hold a shareholder meeting and then you would have to give a
Certain amount of notice to assemble all of the shareholders um so that you know they can ask questions and they can you know hear the rationale for the decision and so he says well no I’ve reconstituted the board now I’ve removed these five directors I’ve replaced them
With my own chosen directors and the company saying we don’t think that this is legally valid and so for a period of time Rogers effectively has there’s a lot of confusion around who is the board of Rogers Communications because you have Edward saying this is the board and
Then you have U the management team and the five directors saying no we’re still the board um to the point that one of my sources referred to this situation as schroedinger’s board because you don’t know who the real Board of Rogers is ultimately what ends up happening it
Lands in court in BC and the court ends up uh deciding that what Edward has done is legally valid and now the new board is in place okay okay so after all of this happens Edward Rogers is is the chair he’s got his new board he’s got
The approval of of the BC courts uh what happened to uh to Joe Natali though so as soon as Edward’s new board is in place everybody thinks okay so I guess that’s it for Joe because obviously this whole fight started over Joe um but you know a number of directors and family
Members had raised the issue of you know how destabilizing it would be to the company to have the CEO exit in the midst of the shaw deal and so immediately in the aftermath of this BC court decision this press release comes out saying Joe natal is the CEO of
Rogers and he has the board support however what Joe ends up doing um through a series of meetings with Edward and their various allies and legal Representatives is putting forward this list this document of his principles basically things that he needs to be in place for him to feel like he can run
Rogers effectively the sounds like a list of Demands almost then this is certainly how several of the directors um viewed this list but the board ends up deciding after you know seeing this list and hearing from Joe he actually speaks to the board um that this this
Isn’t going to work and they end up deciding ultimately to fire Joe and put Tony staffieri in first on an interim basis uh run a CEO search of course Tony uh emerges Victorious and is currently the CEO of Rogers that’s amazing so that’s like really a 180 so the board
Comes out in first in support of natal and then actually no he’s out and stery is back in so I mean I’m I’m starting to understand why people compare this to succession right there’s so dramatic uh and the other thing is it’s so it’s so public Alex right I mean is this often
Happening behind the scenes and we don’t see it or or like is this a really kind of a different situation where we’re seeing this kind of family drama play out this way it is uh in my experience as a business reporter and I’ve been on this beat for four years and I’ve
Covered other business beats um over the past decade and this is you know the most dramatic public family and corporate Feud that I have personally ever covered um I think it’s quite unusual you know Canada’s business Community has seen as very button- down and proper and and honestly sometimes
Quite boring and this was this dramatic fight that really shook the business Community we have a lot of these dual class share structure like family controlled companies in this country we have a lot of them and a lot of these other you know families who control public companies were watching this I’m
Told kind of biting their nails because this is a perfect example of what can go wrong when you have this type of share structure and you know shortly after this whole uh leadership change had played out um around Christmas Edward gets this video message from Brian Cox
Of course the patriarch from HBO’s hit show succession essentially congratulating Edward on his real life succession Edward this is from suzan congratulations on your real life succession at Roger Communications and also having Joe natal to the off and for me when this video surfaced this was kind of
Like the moment where the walls between fiction and reality just came crashing down I was just completely stunned we’ll be back in a minute okay so the backdrop to this whole struggle was the deal for Rogers to take over Shaw Communications which which did end up happening in the end um
But I think we should touch on this a little bit Alex because how does this I guess fit into the the family power struggle of course so the one thing that the family was all United on throughout all of this was the importance of Shaw Shaw uh was the company that Ted always
Would have wanted to acquire and this was kind of the coming together of these two legendary cable families and one of the things that has come out is that Edward essentially had reservations about Joon natal’s ability to complete that deal and to integrate the two companies and this is why he felt that
He wanted to enact a management change quickly rather than waiting for after the deal had closed meanwhile other members of the board felt that you know right in the middle of the deal was the worst time to change the CEO um and Shaw actually you know stayed very much out
Of it throughout because you know this was a Rogers family situation they felt they didn’t want to intrude but you know they had they had another offer for an acquisition they had an offer from Bell and they had turned down that deal in favor of the Rogers offer and so you can
Just imagine the Sha family sitting there biting their nails being like Oh my gosh can these guys just stop fighting and get this deal done yeah I mean this is an important point because when a company kind of seems to be in chaos that of course has other
Ramifications right and there was a lot of talk at the time too about how damaging this this family Saga this family drama could actually be for the company Rogers uh was it damaging like looking back at it Alex how how did it affect the company I mean there was a
Lot of noise um in terms of effect on the stock price like we did see big jumps in the stock price but it’s always a bit hard to tell exactly what is responsible because at the same time you had a lot of uncertainty over whether the shot deal would close and you know
Usually when you’re a company acquiring another company that also affects your stock price and then there’s other issues macroeconomic but at the end of the day I mean you look at Roger Financial results and you know looks like the company’s doing just fine they’re acquiring Wireless customers they’re still a very profitable company
Their revenues are growing they were able to close the deal um so and and all of this in spite of the fact that they suffered a massive Nationwide outage to all of their services in July of 2022 oh yeah that’s right of course um okay so
On the Roger Shaw deal there was also a lot of concern uh about competition so what have we seen there yeah so a lot of the concerns stemmed particularly around uh Shaw’s wireless carrier Freedom mobile Freedom uh you know was Canada’s fourth largest wireless carrier was this
Kind of Scrappy upstart that was sort of seen as the Challenger to the status quo um was credited with driving uh prices lower or at least creating competition for consumers and so there was a lot of concern about whether we would allow Rogers to acquire freedom and then we
Would be going down from four carriers four major carriers to three obviously there’s still other Regional Wireless carriers I want to acknowledge but they ended up being uh forced to divest it um so they sold Freedom mobile to kebec or the owner of Videotron and so as we all know the deal
Did go ahead and you know what we’ve seen since then has been kind of a mixed bag uh we have seen some uh increased uh pricing competition in the market in terms of like promotional offers around the Christmas holiday and back to school season uh we’ve seen churn in the
Industry elevated so churn is this metric of customer turnover on a monthly basis and so we’ve seen that tick up a bit so that’s always an indication that there is uh increased competition but at the same time we’ve also seen both um Rogers and Bell come out with some price
Increases um and also honestly at the end of the day when you have a major deal like this like it can take years to really see what impact on competition it’s going to have and so we haven’t even been it hasn’t even been a whole
Year since this deal has closed and so I think much Still Remains to be seen okay yeah so the the Roger Shaw deal did go through though they kind of the internal drama was kind of settled but how has this played out then Alex since then
With the rest of the the Rogers family so what we saw quite recently was that Melinda and Martha um two of the key voices of descent um actually going to court um I should actually mention quickly that uh Loretta Rogers uh passed away um but so Melinda and Martha uh
Ended up in court um saying that they’ve essentially been Iced Out of uh board meetings they’re not being given and the same access to board documents and that case is now essentially settled because there has been a private settlement in the Rogers family uh and Melinda and
Martha have agreed to step down from the board so they are no longer directors of Rogers uh because the terms are confidential we don’t know what they got in exchange for uh giving up their board seats okay wow just lastly here Alex I mean when you step back and and look at
All of this how it how it played out um I guess I’m just wondering how you reflect on it like what does all of this say about this Telecom Empire uh and and I guess Canada’s Telecom industry more broadly yeah look I think this story raises some some really critical
Questions about you know this’s a very very important industry about you know corporate governance in family controlled companies um and quite honestly about transparency I mean one of the things that I personally find um to be so interesting uh is the fact that you do have in this story a a company
That is controlled majority uh by a family and yet there’s very little um transparency around the Rogers control trust itself and of course you know Canadian laws allow for this but as a journalist I’m always in favor of transparency and so when you have a company where 97.5% of the shares are
Controlled by this family and we’ve now seen you know what that can lead to when you have Discord in the family and yet the Family itself is not actually required to disclose you know even who are the advisers to this Rogers control trust but you would think that this is
Something that maybe the investors uh you know the class B shareholders of Rogers would want to know um and so I think that for me is one of the key takeaways because you know we do here have this very critical company controlling you know critical infrastructure in this country and it’s
Essentially uh in the hands of one man and it’s something that affects a lot of Canadians right people have their their cell phones service through this company people loan shares of this company so it’s it’s you know it it affects a lot of people that’s right I mean Rogers
Touches millions of people’s lives not just through Wireless and cable services that they offer but also as the owners of the Blue Jays as the owners of mlsc as the owners of the Rogers Center where Taylor Swift is going to be performing later this year so this is like a
Company that really touches a lot of people’s lives and it’s a critical service that they provide which is Communications and you do essentially have one guy kind of in control of it all and that is Edward Rogers we don’t have a lot of books Canadian business
Books that look at some of these players not a lot of people know very much about the Rogers family and they are this extraordinarily powerful and Wealthy family that you know has a lot of control over our lives Alex thank you so much for being here today thank you so much for having
Me that’s it for today I’m manica ramman welms our producers are mine white Cheryl Sutherland and Rachel Ley mlin David Crosby edits the show Adrien Chung is our senior producer and Angela Penza is our executive editor that succession theme you heard was actually performed by the glob and males band Yes we do
Have a band Fun with discipline thanks so much for listening and I’ll talk to you [Applause] tomorrow
Back in the fall of 2021, Canadian news headlines were dominated by the story of the Rogers family battling for control of Rogers Communications Inc. It was a very dramatic, and very public, power struggle that was frequently compared to the TV show Succession.
The fallout from that saga is still playing out today. Alexandra Posadzki has been breaking news on this story since it started. She recently published a book, Rogers v. Rogers: The Battle for Control over Canada’s Telecom Empire. Today, she explains the saga that pulled the Rogers family apart, risked a $20-billion deal, and what it all means for Canada’s telecom industry now.
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