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The mysterious Mr. Wang
Billionaire's JumpTV move his latest baffling manoeuvre
Charles Wang often baffles those around him. When the software and real
estate billionaire bought the New York Islanders hockey team in 2000, he
turned to then-general manager Mike Milbury in the middle of a game and asked
when it would be halftime.
“He just looked at me like I'm nuts,” recalls Mr. Wang, 63, who made
his fortune at Computer Associates Inc., the U.S.-based software company he
started in 1976 that became a multibillion-dollar giant during the tech boom.
“I just kept thinking, is [Milbury] ever rude. I had no idea [hockey had
three periods]. I bought the Islanders for one reason: I wanted to make sure
they stayed on Long Island. That was it. I was not a hockey fan.”
Now, as Mr. Wang prepares to take the reins at JumpTV Inc., a small
Canadian tech company that has struggled to make money since going public two
years ago with big ambitions to capitalize on Internet video, he once again
has people baffled.
This is how Mr. Wang likes it; he prefers to keep people guessing.
His plan is to merge his Internet video business NeuLion Inc. with
JumpTV and stabilize the Toronto-based company after what he calls a period of
“turmoil.”
In the past two years, JumpTV has been marked by a revolving door on the
management side as the shares slumped from more than $9 a share to penny stock
status.
“They lost some people; last year they brought in a new CEO who was
trying to get his arms around it,” Mr. Wang said during an interview in
Toronto. “Turmoil means you're focused on the things that are not germane to
the business – getting revenue in.”
He figures JumpTV was on to a good idea, it just wasn't doing it right. The
company has spent the past two years locking up online broadcast rights to
foreign TV channels from around the world to sell online. But it couldn't
build a big enough audience.
“They weren't making money from it. Which means you don't have the right
partners,” he said. “So we're going to take those things and start to find
the right partners.”
When demand for some of those channels did not materialize, JumpTV was
forced to slash costs. “We tried to do too much, too quickly,” JumpTV
chairman Scott Paterson told the company's annual meeting last week.
How Mr. Wang plans to execute his strategy is not yet clear. Known as a
blunt speaker and a brash operator, he has moved quickly to place his stamp on
the company. Most of JumpTV's Toronto offices will close in the coming months
and move to NeuLion's New York headquarters, where it operates businesses that
include one that serves up video highlights for NHL.com.
Mr. Wang will become chairman, while his wife, Nancy Li, will serve as
chief executive officer. Mr. Paterson, the former head of Yorkton Securities
Inc. who took JumpTV public two years ago, will be vice-chairman of the merged
operation.
Mr. Paterson had requested to be co-chairman, but that was a short
discussion, Mr. Wang explains in a thick New York accent honed since the
1950s, when his family moved from China to New York.
“I said ‘no. I'm older than you. You've got a lot more to learn from
me,' ” he says. “It's true. I'm probably blunt to a fault. But it's a
fact: He's a young whippersnapper.”
Mr. Wang needs little introduction in tech circles. When Computer
Associates was at its zenith during the tech bubble, he was considered a
visionary. When he retired in 2002, the company, now called CA Inc., was
facing questions about its accounting practices, which are still being probed
today. He now focuses on real estate, including building a $2.2-billion arena,
hotel and sports complex on Long Island, N.Y.
Mr. Wang (pronounced Wong) makes no apologies for his abruptness. In fact,
he doesn't waste a lot of time weighing outside opinions. He has no time for
e-mail. He delegates correspondence to others so he can focus on “just
making decisions,” he says.
His decision to merge NeuLion with JumpTV came after realizing the two
companies were destined to compete for some of the same market. In addition to
carrying foreign TV channels, NeuLion and JumpTV are both chasing sports
leagues and their audiences.
“We're out there buying more bandwidth [for NeuLion] and they have too
much,” Mr. Wang says. “That doesn't take a genius to figure out we should
maybe get together on that pretty quickly.”
Mr. Wang isn't the only one to size up JumpTV's assets.
Brad Greenspan, the founder of MySpace, attempted a takeover bid last week
that was turned away by the JumpTV board. While the offer of $1.01 a share for
25 per cent of the stock was a 70-per-cent premium, the board figured the
offer was designed solely to gain access to JumpTV's $40-million of cash
reserves.
However, shareholders aren't yet convinced Mr. Wang is the saviour for
JumpTV either. In the weeks after the mergerwas announced on June 9, the
shares fell 25 per cent.
Mr. Wang laughs this off. “If we needed the stock as a currency to buy
other companies, yeah, I'd be worried.”
He is well aware of his reputation as a maverick. When he signed goalie
Rick DiPietro to a 15-year, $67.5-million contract a few years ago, “they
called me crazy,” he says. Then he points out several teams that have copied
his idea.
Whether it's his JumpTV merger, or his approach to running the Islanders,
Charles Wang has one theory: “Who's the idiot questioning it? That's what I
say.” - 2008 July 2 THE
GLOBE & MAIL
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