Tom Rutledge has been a mainstay in the cable community for 50 years.
What a difference a few years can make. At the height of the pandemic two years ago, Charter Communications CEO Tom Rutledge was riding high with a firm that was gaining new broadband users every month as people rushed to work and learn from home. Rutledge is out today.
Rutledge turned Charter from a relatively small regional cable company into the No. 2 provider in the U.S. by orchestrating an audacious takeover of Time Warner Cable, announced in 2015, for nearly $79 billion including debt. At the time, Charter served about 6 million subscribers with a market capitalization of about $20 billion.
Charter has announced the appointment of Chris Winfrey as president and CEO, beginning December 1. After more than a decade as Charter’s chief financial officer, Winfrey most recently served as the company’s chief operating officer. Winfrey will report to Charter’s board of directors as CEO.
When combined with a $10 billion acquisition of Bright House Networks announced at the same time, the Time Warner Cable deal roughly tripled Charter’s size, both in terms of valuation and consumers served. Rutledge rebranded the company’s television and broadband internet assets as Spectrum. Charter’s income has surged 600% and its customer base has increased 500% during Rutledge’s tenure.
Until this year, investors applauded Rutledge’s pledge to become a pure-play cable firm. Charter’s steady additions of high-speed broadband users, which come with extraordinarily high-profit margins, resulted in the company’s stock more than tripling in value between May 2016, when the Time Warner Cable transaction concluded, and December 2021.
After years of expansion, broadband additions have finally leveled off this year. This has resulted in cable valuations plummeting. Charter is down about 44% in 2022.
Rutledge began his career in cable in 1972 as a technician at Eastern Telecom. He gained a reputation as a top-notch cable operator while at Cablevision, working for then-CEO James Dolan. Charter poached him from Cablevision in 2012, giving him the CEO role.
“It has been an honor and a pleasure to lead Charter and this incredible team over the past 10 years,” Rutledge said in a statement. “During my 50 years in this industry, I have witnessed first-hand its ability to continually evolve and change the world, and our opportunity today is greater than ever with ubiquitous connectivity being central to everything we do.”
The revelation today, which coincides with the major annual trade show Cable-Tec Expo, comes as a surprise. A Texas judge lowered Charter’s punitive damages in a murder trial from $7.3 billion to $1.15 billion the day before. However, $1.15 billion is still a significant figure.
Charter has also struggled this year with broadband customer losses and a stock decline.
“When Tom was chosen to head Charter in 2012, his reputation as a talented operator was second to none, but we never expected the new heights to which he would take this firm,” said Eric Zinterhofer, Lead Independent Director of Charter’s Board of Directors. He expanded the company organically as well as through transformative acquisitions.