New blood Malone brings in Hindery as No. 2 man at TCI

John Malone's decision to cede one of his titles may be one of the smartest decisions that the Tele-Communications Inc. head has ever made, industry experts agree.

Malone named InterMedia Partners Chief Executive Officer Leo Hindery president of TCI, retaining for himself the titles of chairman and CEO.

Appointing Hindery is the latest in Malone's efforts to improve TCI's dismal stock performance, said John Aronsohn, senior analyst at The Yankee Group, Boston.

"Hindery's job is to whip the company into shape, make it leaner and meaner, so TCI can get out of its stock crunch and have access to capital to move into the next generation of technology," he said.

Hindery has said that his strategy will include reorganizing the cable giant into smaller operating units with fewer subscribers per system, but he declined to be more specific.

His success with InterMedia, the 1.4 million-subscriber company that he founded in 1988, bodes well for TCI. Hindery boosted InterMedia's subscribership by 4.7% in 1996 and improved cash flow by 12% while holding annual rate increases to 5.6%.

TCI, on the other hand, raised its cash flow by only 3% last year and lost 70,000 subscribers-a drop in the bucket for the multiple systems operator, which has nearly 15 million subscribers nationwide, but not a good sign as direct broadcast satellite services continue to threaten the cable industry and as telco competitors begin to appear on the horizon.

At least one analyst believes that the appointment of a strong and well-regarded manager like Hindery is part of a larger scheme on Malone's part.

"The good doctor [Malone] has got something up his sleeve," said Gary Kim, principal at Itibiti Ventures, Littleton, Colo., pointing to some of TCI's recent spinoffs as proof.

"Breaking the TCI empire into pieces is something that [Malone] has always steadfastly opposed," Kim said. "Now all of a sudden, he's spinning out assets as fast as he can.

As soon as TCI's stock price has stabilized, Malone will reveal the ace in his hand, he said.

"The man's a very flexible master strategist," Kim said. "The truth is, we can speculate until the cows come home about what it is, but Malone is planning something very big, and as soon as he gets the stock valuation he wants, he'll pull the trigger."

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