Analysis on Rogers

As Rogers Communications Inc. zeroes in on hiring a new leader, the company’s media division is likely to feature prominently in any discussions with a would-be successor despite its relatively small place in the firm’s empire.

Only about a quarter of Rogers’ revenue is generated by the company’s wide-ranging stable of media properties, and profits have been declining. But the division plays a key role at the company, because family members who control the voting shares have never forgotten it was built by Edward “Ted” Rogers Sr. in 1927 after he founded CFRB in Toronto and gradually expanded his empire, which later blossomed under his son Ted Rogers.

“It’s an emotional issue for the family,” said Canaccord Genuity’s director of research Dvai Ghose. “Rogers started as a content company and I’d be very surprised if you ever saw a wholesale shutdown in its media division.”

Still, whoever is tapped to lead Rogers will see the company’s many challenges lined up, which may help explain why its shortlist of candidates is led by Vodafone UK president Guy Laurence, whose experience includes years working with content companies before leading a turnaround at the wireless giant. Rogers declined to comment on its CEO hiring process Tuesday.

Rogers’ conventional television networks City and Omni piled up a $30-million loss last year as Rogers spent big on content and stations in a bid to steal market share from its rivals as the new programming season gets under way. Its largely profitable speciality channels face competition from a slew of online competitors that offer the same programming at a fraction of the cost and with more viewing flexibility.

Rogers Media president Keith Pelley has brought in Boston Consulting Group to review efficiencies in the division, a move that could mean layoffs just as the company prepares to launch a tightly guarded digital subscription plan for its stable of high profile magazines that include Maclean’s and Chatelaine.

“We’re now...