Meet Bradley S. Shaw, the 47-year-old youngest son of JR Shaw, the little brother of Jim Shaw and the new face of Shaw Communications Inc. No, there’s no plan to change the company’s stock symbol from the father’s initials to the son’s, but the third Shaw is nearing his first anniversary as chief executive officer. Ten months into his tenure, analysts, reporters, investors and competitors still aren’t quite sure what to make of Brad – or of Shaw’s prospects with him at the helm.
“I’m just a guy,” Shaw says. What you see, he says, is what you get: a little shy, very private and “totally committed.” He’s not precisely shocked that he’s CEO of one of Canada’s largest vertically integrated media companies. He is, after all, a Shaw. But he is perhaps mildly surprised that the board, his father and, heck, fate itself have put him in this role. The succession was emphatically not pre-ordained. It was not on anyone’s mind in 1987, when he became the second prodigal son to come into the family business after a rocky late adolescence and “lost” early 20s (Jim had followed a similar pattern of estrangement, reconciliation and ascent). Nor was it considered in 1997, when he moved to Calgary and into the ranks of senior management. That move came with the stipulation that, while he would work hard for the company, his priority was spending time with his wife and children.
Did a decade-plus of watching big brother Jim run the show give Brad an injection of ambition? Probably not. If Jim, to whom JR handed the reins in 1998 when the father was 64 and the son not quite 40, had displayed the interest to stay at the helm longer, one gets the impression that Brad would have been content to continue playing a supporting role. He shoulders the CEO role as a responsibility, not a reward. There is no ego here, just determination to work, and perhaps a healthy tinge of fear at the immensity of the task with which he’s been entrusted. That’s Brad Shaw – that’s what he projects. “It’s not about coming with ego and saying you know stuff,” he says. “I want smart people around me; I want smarter people than me around me – people that challenge me, that can think out of the box.”
A bigger contrast to brother Jim one can’t imagine, and Brad is aware of that. “Jim’s style is more, ‘This is what I want to do and that’s how we’re going to do it,’” he says. But notwithstanding Jim’s abrupt exit (see sidebar: “End of an Era”) and any inevitable sibling rivalry caused by Jim’s my-way-or-the- highway attitude, Brad won’t criticize his older brother. He can’t. “When I look at the 12 years he’s been there running the company, we’ve had incredible growth and incredible success, and that doesn’t come from someone just throwing darts at a board. He was incredible at strategic thinking, and he wanted to carry out his strategy a certain way, and great, he did it.”
JR Shaw’s Short Course in Human Relations
The six most important words
“I admit I made a mistake.”
The five most important words
“You did a good job.”
The four most important words
“What is your opinion?”
The three most important words
“If you please.”
The two most important words
The most important word
The least important word
Source: Above and Beyond: The JR Shaw Family in Life and Business
What’s Brad Shaw’s way? “I’m more collaborative,” he says. That comes across even in the way he talks about his competitors and the changing mediascape in Canada. “As the competition here heats up – which I think is great for the customer – what that means for us is that competition is not just with Telus. It’s with Apple; it’s with Google,” he says. “It’s become global.”
Jim fought frequently with the Canadian Radio-television and Telecommunications Commission and the federal Competition Bureau with gloves off. He even went so far as to withhold Shaw’s payments to the Canadian Television Fund back in 2007. Brad would prefer to educate than to scrap. He doesn’t do adversarial very well, and that has some commentators worried. “The new Shaw might be a kinder, gentler company, and that’s probably good news for [Telus CEO] Darren Entwistle, among others,” says Iain Grant, a commentator on the technology marketplace with Montreal’s Seaboard Group. Ouch. But Brad invites it. “We’re all going to compete and everyone wants to win,” he says.
Jim, one suspects, did not need to ponder that particular issue. His 12 years as CEO are bracketed by two of Shaw’s biggest and highest-profile transactions: the battle for control of Western International Communications in 1998, in which he first took on Canwest and the Aspers; and the 2010 buyout of the dying Canwest empire’s broadcasting assets. Both deals cast Shaw as the underdog, but one that was willing to push the envelope – legally and strategically – and do what needed to be done to close the deal.
JR probably didn’t agonize over the definition of winning, either. Winning equalled building, acquiring and growing. He founded the company in 1966 and made his first acquisition two years later. That began a trend that would see Shaw complete more than 70 acquisitions over its 35-year history. “When I joined the company in 1989, both JR and Jim said to me, ‘We are going to be acquirers, not the acquired,” remembers Shaw’s president, Peter Bissonnette.
From the beginning, JR was building not just a business, but also a Shaw family legacy (even if he didn’t give the company that name until 1983). Don’t let the public nature of Shaw’s ownership fool you. What’s significant is not that Shaw is a publicly traded company, but that the ticker name is SJR – JR Shaw’s initials, last name first. It’s the Shaw family’s inheritance, in which the public is allowed to invest. Shaw’s dual class structure ensures that only holders of Class A shares have a say in how the company is run, and the Shaw family controls 79 per cent of those shares.
You might wonder whether that means the patriarch really did relinquish control. And the answer is … yeah, mostly. First, there’s a voting trust agreement among the corporations owned or controlled by the Shaws that is exercised by five trustees. More compellingly, there’s the fact that JR would not have handled the Western International acquisition the way Jim did, and he would not have otherwise steered Shaw the way Jim did. Meanwhile, the public handover was complete. After 1998, Jim was the face of Shaw, and JR’s public contribution was limited to the provision of complimentary sound bites that supported his son’s leadership.
From a technological and competitive point of view, JR exited the spotlight at just the right time. He recalls the rise of the Internet, and the conversation he and Jim had around it. “Is that going to be a business?” he remembers asking.
“Are people going to use it? Is there something there we can sell?” Jim had a better grasp on this new thing than his father. “I needed to step back,” JR says.
“I think when you’re into these big jobs and they’re so demanding and so forth,
you need younger minds, and that’s when Jim came into being. And now Brad.”
Brad watched the first transition and the conflict it created between father and son. “JR, with Jim, had to let him do his thing, and it was initially tough,” he says. “This time, it’s easier for him, because he’s been through that already.” The one who’s having a bit of a struggle letting go this time is, naturally, Jim. “I talk to him, and he says, ‘Remember, I did this, and you should do that.’” Brad laughs. And you can see the younger brother, used to this pattern, nodding so as not to provoke a fight, and then going off to do his own thing. His own thing, yes, but with input from others, including Jim. “He cares,” says Brad. “He lives and breathes this stuff.” Plus, let’s face it, Jim may not be running Shaw, but Shaw is still Jim’s income stream, and Brad knows it. “As a family, you need to have these conversations – from an ownership point of view.”
The End of an Era
Nobody wanted it to happen this way. The transition plan that was in place was good: Jim Shaw would see the Canwest acquisition through to the end and then ride off into the sunset. It wasn’t a sudden decision: there was a health scare in 2008 that had the “bad boy of cable” rethinking priorities, and throughout 2009 and 2010, Jim would intermittently send signals that he was done.
“It does take a toll on you,” says Peter Bissonnette, Shaw’s president. “It’s heavy lifting.” Shortly after the health crisis, Jim confided in Bissonnette “that he wanted to see the next phase of his life” sooner rather than later. From that point on, Bissonnette knew he’d soon have a new Shaw as CEO, and he watched Brad take on more and more of the load in anticipation of the transition.
The Canwest deal was closing on October 27, 2010; on October 22, Jim Shaw announced that the Brad era would start the following January.
Then came an investors’ lunch on November 12, 2010, in Vancouver, at which Jim heckled and insulted investors and Shaw management. Six days later, Brad was the CEO.
The official line from Shaw was that it made sense for the transition to be immediate so Brad could “move forward with the necessary decisions” with respect to the Canwest deal.
But it’s hard to refute that the older brother’s highly visible meltdown sped up the hand over to the new CEO. “It wasn’t done the way we had planned, but you deal with things as they happen,” says Brad. “I’m sure he regrets it, but it is what it is.” JR steered the ship for 22 years. Jim did it for 12. “I think 12 years is a long time,” Brad says.
“It’s been a long haul getting here, and doing this, it’s something where to fight the fight, your heart has to be there, and I think he lost some of the willingness to do that.”
Family-controlled public companies have long been a mainstay of corporate Canada, perhaps nowhere more so than in the media industry, where the eight companies that account for three-quarters of all television-media-Internet revenues are (or were) family companies at their core: Thomson Reuters (which owns the Globe and Mail), Shaw, Rogers, Quebecor (QMI), Cogeco, Astral, the Toronto Star and Transcontinental. Their structure intermittently comes under fire by analysts and pundits, in Shaw’s case most recently when Jim’s $16,000-a-day pension was revealed.
But such companies have one unassailable advantage over their truly public brethren. “They have a long-term perspective,” says Jay Mehr, senior vice-president of operations at Shaw. “We have the ability to make more dramatic, more conscious shifts in our approach than other organizations. Companies that are focused on the individual quarter or individual fiscal year wouldn’t have that ability,” he says.
Seaboard’s Grant agrees. “Shaw looks at things differently than other corporations – from generation to generation, not quarter to quarter,” he says. “They’re looking at building something. After all, their name is on the front door.”
Brad’s inaugural quarter disappointed analysts, while the most current one pleased them. Unlike his brother, this is not a man who will tell off analysts or shareholders for criticizing him. But he will tell you what he thinks is wrong with the current corporate business model. “Everything’s about the quarter,” he says. “You race to the quarter; you race to the month’s end. Yes, there’s a measurement for that, but there has to be measurement for creating long-term value for shareholders.”
Long-term value for this Shaw isn’t just about share price. He doesn’t think that way: his big picture includes everything. Former Senior Vice-President of Operations Bill MacDonald, who mentored Brad when he returned to the fold, said he “found Brad very different from the others … Brad wore his emotions on his sleeve. It made him terribly vulnerable.” What Brad remembers most about the Canwest acquisition is not the thrill of the fight nor the thrill of victory, but empathy with what the Asper family had to be going through at the time. “When JR and I talked about the deal, he said to me, ‘We’ve just got to realize how that’s changed that family – how we would never want to be in that spot,’” Brad recalls.
JR’s empathy for the Aspers did not prevent him from pursuing the Canwest deal, nor did it prevent him from making a myriad of other tough business calls, such as the 1994 asset-swap deal with Ted Rogers that enabled Rogers to buy Maclean Hunter. Ron Osborne, CEO of Maclean Hunter, was angry. He had pegged Shaw as a potential white knight. “I guess that means you are in Ted Rogers’ camp,” he said to JR. The elder Shaw’s response was simple: “No, Ron, I’m in Shaw’s camp.”
For 12 years, Jim demonstrated he had taken that particular lesson to heart. Now it’s Brad’s turn. But Brad’s take on what “in Shaw’s camp” means may be different. “You need to make a difference, make a contribution – don’t always be taking,” he says. “Shaw needs to do more to give back, and I’m not talking about giving the farm away, but we need to be more serious about making a difference. When did it become just about the almighty profit? Where is there a bigger game to play? There is more of a role that business needs to play in communities and societies in a more positive way.” He points to Shaw’s recent Together is Amazing campaign as just one such initiative, and circles back to Shaw’s competitors. Suppose Shaw and Telus teamed up to do something better, bigger? How great would that be? “This will be funny when Darren reads it,” he says, laughing. “‘What do you mean you want to do something with us?’”
Let’s be clear: he’s talking community collaboration here, not business collaboration. But as the Canadian media landscape continues to adapt to the business realities of vertical integration, to technological change run rampant, to the spectre of real global competition and to an ever more demanding and fickle customer, business collaboration could well be in the cards. JR built and bought. Jim aggressively acquired. Is Brad going to be the Shaw who will have to collaborate in a merger or other business deal in which the Shaw ego needs to be swallowed so that shareholder value is maintained, or, better yet, maximized?
It’s not Shaw’s first choice. “We look at what we have here and what we are generating, and the family is extremely pleased about the position we are in,” Brad says. “For us, this is our life. We’ve worked for it; our sweat equity is in here,” he says. “You never know what’s going to happen in the future.”