Cablevision Systems Corp. (CVC) dropped the most in seven weeks after saying Chief Operating Officer Tom Rutledge will step down this month for undisclosed reasons.
Rutledge, 58, will leave effective Dec. 19, according to a regulatory filing. He joined in 2002 and has reshaped Cablevision as operating chief since 2004. The Bethpage, New York-based company is seeking a successor to oversee its cable operations, according to a statement yesterday.
Rutledge transformed Cablevision into a cable infrastructure-focused company after it spun off Madison Square Garden Co. (MSG) and AMC Networks Inc. in the last two years. Cablevision, the fifth-largest U.S. cable operator by subscribers, added assets with the $1.37 billion purchase last year of Bresnan Communications LLC.
“This is a staggering loss,” said Craig Moffett, an analyst at Sanford C. Bernstein in New York. “Tom Rutledge is the hands-down-best executive in the cable business.”
Cablevision fell 13 percent to $12.09 at 9:48 a.m. in New York after earlier losing as much as 15 percent for the steepest intraday drop since Oct. 28. The shares have fallen 41 percent this year before today and 46 percent since AMC was spun off July 1.
Vijay Jayant, an analyst with International Strategy & Investment Group, called Rutledge’s departure a “bombshell” and lowered his price target for Cablevision to $17 from $25.
Investors will punish Cablevision as long as there is uncertainty about who will replace Rutledge, Jayant wrote in a research note.
“For Cablevision investors (still) in it for the long haul, we believe they’d better hope that the right person is found, and found soon,” Jayant wrote.
Rutledge was inducted into the Broadcasting & Cable Hall of Fame this year after 34 years in the cable industry. He was Time Warner Cable Inc. (TWC)’s president before Cablevision Chief Executive Officer James Dolan hired him as president of cable and communications.
“Tom Rutledge has played a key role in driving and shaping Cablevision’s success over the last decade, applying a rare combination of technological vision and operational excellence,” Dolan said in the statement.
Rutledge’s departure follows that of John Bickham, who succeeded Rutledge in 2004 as president of cable and communications. Bickham announced his resignation last month.
CEO Mike Lovett of St. Louis-based Charter Communications Inc. (CHTR), the fourth-largest U.S. cable company, has said he will step down by April 30. Charter hasn’t announced Lovett’s successor.
A Cablevision spokesman, Jim Maiella, declined in an e-mail to comment beyond the statement, and said Rutledge declined to elaborate.
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