A few weeks shy of the first anniversary of closing of Level 3’s purchase of Global Crossing, the latter’s former CEO has resurfaced in a somewhat unexpected direction. John Legere has been named Chief Executive Officer at T-Mobile USA, taking over for interim CEO Jim Alling.
Legere took over Global Crossing just as it entered BK back in the bubble years, and spent the next decade helping to rebuild what many thought couldn’t be (or shouldn’t be, depending on who you talk to) rebuilt. That determination and turnaround experience probably what Deutsche Telekom is looking for here, as T-Mobile USA may not be in BK but it is generally thought to be in a difficult spot: too small and spectrum-poor to stand a chance against Verizon Wireless and AT&T.
AT&T’s failed attempt to purchase the T-Mobile USA left the company with something of a ‘lost year’ competitively. They now must figure out how to make up the ground with LTE and start winning subscribers again. Everyone has a different remedy to suggest, from merging with Sprint to building out themselves to partnering up with Clearwire or DISH or something. I doubt there is a magic bullet, but I also suspect that people make too much of the gotta-be-the-biggest-or-die thing.
Can John Legere find a way to restore T-Mobile USA’s wireless mojo? Who knows, but it will surely be interesting to watch.
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doesn’t say much for the pool of telecom talent out there or the t-mobile board if this is the best T-Mobile could do.
what exactly has this guy achieved in 12yrs? became the first CEO of Asia Global Crossing and they filed for chapter 11 shortly after he left. Took over Global Crossing in 2001 and after telling the rank and file the company was in fine shape took the company into bankruptcy in Jan ’02. Emerged from bk in Jan 2004 at $30/shr. Three months after emerging from bk, the company was embroiled in an access accrual debacle that required the company to restate earnings two years of earnings. He missed external guidance 4 out of seven years after emergence. He created no shareholder value during his tenure at Global Crossing with the average and median stock price during the entire period from Jan ’04 through April ’11 at 14.50. Finally, on the day the Level 3 announcement was made the deal yielded a $24/share price, 20% below the Jan ’04 post BK re-IPO price.
And for his 10 yr failure with global crossing, he was rewarded with $60m. There’s one sure thing you can count on if he’s running this company and that’s that he will make a ton of money.
There is not a better CEO to optimize a telecom business and clean house.
yeah, because he did such a great job at Global Crossing. I will say he’s certainly wonderful at laying people off. As for the optimizing piece not sure where exactly he was successful at that unless you’re talking about optimizing his salary, his bonus, his severance and his stock allocations. As for creating shareholder value, well, let’s just say he’s a bit challenged in that department.
If you’re at t-mobile you might want to socialize that resume because he’s good with a knife. If you’re lucky enough to survive, you can count on doing twice the work at the same level of pay unless you’re one of his executives in which case he will take care of you.
I say this guy will be looking to do a tracking stock in 18 months, a carve out within three years, and a sale to private equity within 4.
That should line his pockets quite nicely.
This is pretty funny stuff to read. I work for T-Mobile US and have since 2009. We love John Legere to death! He’s been here almost a full year now and has done a phenomenal job including NOT laying off employees, making us a publically-traded company and making our stock prices SOAR! He also gave us all a very significant share of the company based on position held. He’s done amazing things that have been all over the headlines for good reason which will not only help T-Mobile but also the entire industry as a whole.
Really, no layoffs at T-Mobile since Legere arrived? that’s certainly news to the Seattle Times:
Originally published March 28, 2013 at 8:17 PM
“Latest round of layoffs at T-Mobile draws static
As many as 300 employees lost their jobs at the Bellevue headquarters Thursday in a cost-cutting move that drew employee ire over the way it was handled.
…Between 200 and 300 employees in the company’s operations group were laid off, ranging from administrative assistants to senior vice presidents. That’s in addition to a layoff of 100 employees in the marketing department earlier this month.”
http://seattletimes.com/html/businesstechnology/2020664139_tmobilelayoffsxml.html
And this all happened before the T-Mobile/Metro PCS deal even closed!!
You might want to hold off singing hail to the chief because there’s still 100s of layoffs associated with the operational efficiencies from the Metro PCS deal that are coming down the pike.
I bet him and J. Crowe are best buds. Two peas in a pod.
Congratulations T-Mobile, this is what you won….
(Excerpt from a March 22, 2002 news archive on Legere’s congressional Testimony)
‘Unfettered Greed’
“Absolute unfettered greed,” charged Rep. Michael Capuano, D-Mass., who appeared to be so angry that he declined to give an opening statement as the hearings began because, he said, anything he would have to say would be unprintable.
Later, he said he had a raft of questions to ask Global Crossing executives. He noted that they had dodged questions during the morning and that he could see he wasn’t going to get any straight answers. He would try to get written responses.
Rep. Stephanie Tubbs-Jones, D-Ohio, went straight for the jugular.
“What is your salary?” she demanded of Global boss Legere.
When the CEO hemmed and hawed, the congresswoman demanded an answer.
When he finally said his annual pay was $1.1 million, she asked what bonus he had received. When he answered $3.5 million, the congresswoman cited a worker in her district who lost health benefits and received no severance. She asked how many unfortunate workers could have been helped for that kind of money.
“I don’t do math in public,” Legere finally replied.
“I asked you for a straight answer, and you give me a quirk,” said the angry lawmaker. “I demand you apologize.”
The congresswoman told NewsMax.com after the hearing that Legere also had a $10 million loan forgiven, a fact that time constraints had prevented her from discussing in the committee session.
I don’t know any of the facts concerning GC or it’s bankruptcy or its execs, but the idea of Congress (either party) lecturing ANYBODY over financial matters would not be the example I would use, just saying.
Totally agree!
I worked for GC prior to the sale to L3. I left on my own … You may not like legere or respect him… I sure didn’t. One thing he did well was make sure everyone was moving in the same direction. Along the way people who weren’t moving in the same direction as his stated direction left either voluntarily or involuntarily. Bottom line his management style isnt for every situation but works well in management and business turnaround situations. So what we found out by these board actions are tmobile USA is in bad shape.
I also worked for GC. I also had the amazing experience working for IBM under Louis Gerstner in the 90s during their massive turnaround. The CEO is not a traffic cop directing automobiles through a traffic jam. His job is to design, implement, execute, and modify, as necessary, an effective long-term strategy to generate free cash flow for its stakeholders. Lou Gerstner was a master strategist and it was reflected in IBM’s impressive financial performance during his years.
John Legere had 10 yrs to generate consistent and sustainable free cash flow (not a meaningless single quarter’s worth) and he couldn’t do that. In the end, Legere had to convince the board (STT) to sell the company to Level 3 because he couldn’t make it work without more capital which a frustrated STT wasn’t willing to give and outside investors were uninterested in providing on a non-recourse basis because there was no more collateral left for GC to pledge.
If Lou Gerstner’s turnaround of IBM in the 90s gets an A, John Legere’s work at Global Crossing earns a gentleman’s C- at best.
If T-Mobile needed a turnaround specialist to save the company, John Legere is hardly their savior.
We can spend time in this space talking about his questionable executive decisions, his nepotistic executive choices or his do-as-I-say-not-as-I-do management style if you want to get down to the nitty gritty. Bottom line is he should have been released as soon as the access accrual event occurred. If that wasn’t enough, he should have been released the first time he missed external guidance. Instead, the Global Crossing board stuck with him and he failed to provide any shareholder wealth until the day of the Level 3 announcement which was still 20% below 2004 re-IPO price.
Cheers
John Legere was no Lou Gerstner. Thats for sure. But despite his shortcomings he still turned GC around. I don’t know if you know or even understood how close total liquidation we were at GC but we got through it. Did
Legere achieve results that mirrored amazing growth? Nope. He did, however, take a company from almost total extinction and sell it … Perhaps no where the opinions on this board think it should have been but it was done. Btw GC would have purchased L3 if STT wanted to remain in the game but they wanted to cash out so the opposite occurred. Doesn’t matter really because in the end STT made its money back and then some. Oh and on the access accrual issue … They should have fired the CFO and Access folks to start with but they didn’t. Perhaps that’s the nepotism protectionism you refer to … Perhaps not.
I don’t think the data supports you here.
(1) STT is still in the game. STT still owns over 20+% of LVLT. Their problem is they can’t sell because they’d flood the market with stock and LVLT’s stock would tank dramatically lowering STT’s cost basis. (They knew they would have to continue holding LVLT stock when they agreed to sell the company, but were not willing to put up any more cash.)
To say STT had confidence in Global Crossing’s management team is not supported by reality. STT went from a controlling interest (i.e., owning more than 50% of the equity) and control of the board to a 23% share of the combined company and 3 of 10 board seats.
(2) STT has not made money. People seem to forget that in addition to initial equity they provided in buying GC out of BK they also provided credit and then more credit and then more, most of which was ultimately converted to equity so that GC could borrow more money and pledge assets to the new creditors as collateral.
Where exactly was the turn around? Moving away from voice and into data? Considering every similarly situated carrier had moved or was moving in that direction already, it’s hardly worthy of a $60m payday.
On the occasions when guidance was met, there was more accounting sleight of hand than you’d see at a penn and teller show. Slow paying vendors (to goose cash), inducing early pay from customers (to goose cash), end of quarter dark fiber sales (to goose cash), OA&M buyouts (to goose cash, revenue and OIBDA), treating late payment charges from vendors as a finance charge instead of operating expense (to inflate cash flow from operations), playing with previously written down real estate assets…
Quite frankly, I don’t know what’s so miraculous about selling the company. He first took it into bankruptcy, wiped out over $11B in debt and emerged from bk with only $200M of debt. That they had to accumulate another $2B merely to survive is not a spectacular feat.
Level 3 is saddled with over $8B in debt and never filed for chapter 11, yet they had the resources and assets to purchase Global Crossing, which, as noted above emerged from bk 7 years earlier with a crystal clean balance sheet.
that should read selling price, not “cost basis”
Where is Abu?
COO role for his good work at GC? Instead of back on his cubicle as Financial Analyst where he belongs?
Will JJL make the same mistake based on personal relationships or has he evolved?
Camarotti needs to come back and save telecom
Add to that the stellar leadership of XO’s CEO, Network and IT guy, sales guy and the csm leader and you have yourself a winning combination folks! Nothing could stop them accept of course Billy Baru coming in for a nice joy ride on Johnny cakes lap. One things for sure …
you guys are the bessstttttttttt
Two years later. So glad I found this page.
Some well known VIPs here in “Silly Valley” still roll their eyes at the mere mention of Global Crossing. Can imagine their amusement at Legere’s latest act and antics. But he is getting the job done at T-Mo. Whatever it takes … pink shoe laces, juvenile tirades on Twitter and suchlike all the way to the bank.
Still, for all his lobbing of stink bombs in every direction, you would think that Legere would appear to be having more fun.
Necropost to the above story. Legere has moved a mountain since fall 2012. And it looks like he’s just beginning to hit his stride. It’s a truism that those with the right stuff often come back stronger and better than ever, after a setback or less than glowing experience.
Legere has everyone paying attention this game-changing time around. Don’t bet against him.
In addition to his questionable accounting activity when he ran Global Crossing, John Legere also had to settle several sexual harrassment claims against him during his time there. He has no respect for women, he is not a gentleman and it is no coincidence that he has no female executives reporting directly to him.
But the bottom line is that the Board at T-Mobile will let him do whatever he wants as long as he continues to turn around the company, and that is exactly what he’s doing.
I have not worked for any big major companies, but I know Legere is an idiot. It does not take a genius to see that. I think he is a high level conman. He gets companies to pay him large sums of money. I would not be surprised if his contracts somehow null and void at will employment clauses. For example, a contract that promises him 3 to 5 years of work at a company. Of course, he wants everyone going in the same direction. He is probably good at that lol. Most con artist are. They are good talkers. Just because someone has everybody headed in the same direction, it does mean they are going in the right direction. Sometimes not conforming is good if it is for the right thing. Legere may have fired those unwilling followers, but it does not mean he was correct in doing so. It also does not mean those that did not conform had incorrect judgement. Character is everything and Legere is easy to read. He is that salesman that will tell you anything to make that money, even if it means lying to you.
Correction: does not mean they are headed in the right direction.
I have not worked for any big major companies, but I know Legere is an idiot. It does not take a genius to see that. I think he is a high level conman. He gets companies to pay him large sums of money. I would not be surprised if his contracts somehow null and void at will employment clauses. For example, a contract that promises him 3 to 5 years of work at a company. Of course, he wants everyone going in the same direction. He is probably good at that lol. Most con artist are. They are good talkers. Just because someone has everybody headed in the same direction, it does not mean they are going in the right direction. Sometimes not conforming is good if it is for the right thing. Legere may have fired those unwilling followers, but it does not mean he was correct in doing so. It also does not mean those that did not conform had incorrect judgement. Character is everything and Legere is easy to read. He is that salesman that will tell you anything to make that money, even if it means lying to you.