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I first met Leo Hindery in Denver's convention center back in 1997. He wasn't exactly thrilled to see me. Six months earlier, he had been named president of cable-TV giant TeleCommunications Inc., a thankless job if there ever was one. And I, like lots of other reporters who had been covering TCI back then, had opined that it would take a lot of work for Hindery to turn around the hobbled cable company, which was hemorrhaging customers because its service record, even by cable-TV standards, was awful.
What I didn't know back then was that TCI Chairman John Malone had hired Hindery -- as he later acknowledged to me -- to "fix it up and sell it." The simple fact that normally closemouthed TCI was staging a public event for the press should have alerted me that the company was prettying itself up for sale. Sure enough, two years later, AT&T bought TCI for a cool $52 billion and got Hindery along with the cable company.
It's now evident that Hindery, 53, a one-time Seattle newsboy, is the best salesman of the new-media era. First, he gets a king's ransom for TCI. Then, in late September -- a mere 11 months since he was named president of telecommunications upstart Global Crossing -- he gets $6.1 billion to sell off the company's GlobalCenter unit to Exodus Communications. That's a fairly staggering price for a unit that, as far as I can tell, is little more than a heck of a lot of computer servers.
MISSION ACCOMPLISHED. The deal with Exodus creates one of the world's largest Web-hosting companies, with something like 32 data centers and a 4,000-customer client list that includes the likes of Cisco, Compaq, Dell, and Microsoft.
It also stands to make Hindery one wealthy guy -- again. Based on his contract with Global Crossing, he'll own 5.5% of the company if there's a change of control -- something that Hindery himself manufactured over the past two months by brokering the deal to Exodus. With a strike price of $54.37 a share, Hindery's stake stands to make him nearly $250 million when Exodus completes its "definitive" deal to buy GlobalCenter.
Which brings me back to that day in Denver, when Hindery told me he intended to turn around TCI -- and in a hurry. Two years later, Hindery had done just that, by trimming overhead, improving TCI's woeful service record, getting the press and analysts to buy in -- and in the process, collecting more than $300 million in stock options. Hindery left TCI about a year after the AT&T takeover, after also striking a deal for AT&T to buy the industry's third-largest cable company, MediaOne, for $58 billion.
THRILL OF THE DEAL. The word around the industry when Hindery left AT&T was that he and Chairman Michael Armstrong weren't getting along, at least in part because Armstrong didn't realize just how much money it took to upgrade TCI's technology-impaired system to offer the full range of telephone and other services Armstrong wanted.
A one-time investment banker who went on to become chief financial officer of the San Francisco Chronicle in 1985, Hindery has been a big deal guy ever since he first came into the media business. He once told me that he camped outside of Malone's offices in the late '80s, until Malone gave him $40 million to buy a couple of cable-TV systems. Hindery operated them in partnership with TCI before eventually selling what became a large cable franchise back to TCI and joining up. Now, after making what looks like a handsome deal to sell GlobalCenter, Hindery is again heading out the door -- sticking around just long enough for the deal to close early next year.
So that leads anyone who has followed his career to wonder where Hindery will go next. With more than $500 million in his pocket and a daughter in San Francisco he dotes on, I figure he won't necessarily want to work. But heck, he also loves the thrill of the deal. And I would guess it won't be long before someone comes calling again.
Grover is Los Angeles bureau chief for Business Week. Follow his Power Lunch column every week, only on BW Online Edited by Thane Peterson
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Copyright 2000, Bloomberg L.P.
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