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Thread: Sprint deal comes with big payout for outgoing T-Mobile CEO

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    Sprint deal comes with big payout for outgoing T-Mobile CEO

    Not bad way to go when leaving the company.

    https://www.bizjournals.com/seattle/...hoo&yptr=yahoo


    There was no question T-Mobile CEO John Legere would see a big payoff for closing the company’s acquisition of Sprint – the question was how big it would be.

    SEC documents show that Legere was granted more than $50.52 million in stock at $85.13 per share, according to Securities and Exchange Commission documents. His stock holdings in the company now total nearly 2.5 million shares.

    Legere, with his long hair and bombast, cultivated a maverick image for the T-Mobile brand. He exited his role as CEO when the $37 billion Sprint deal closed April 1, several months earlier than expected. He has been replaced by new CEO Mike Sievert.

    T-Mobile is potentially getting a lot for the money. With Sprint’s network in hand it may have a chance to challenge Verizon and AT&T, the nation’s two largest telecom carriers. The merger, which closed last week, leaves T-Mobile ranked as number three.

    The company has also said it plans to roll out a nationwide 5G network and it has taken aim at the big cable companies.

    The Sprint acquisition calls for an exchange ratio of about 11 Sprint shares for each T-Mobile share. Softbank Group Corp., which owns Sprint, agreed to surrender approximately 48.8 million T-Mobile shares acquired in the merger back to T-Mobile immediately following the deal’s close.

    Sprint shareholders other than SoftBank will receive a fixed exchange ratio of 0.10256

    T-Mobile shares for each Sprint share, or the equivalent of about 9.75 Sprint shares for each T-Mobile share.

    T-Mobile shares (TMUS) were trading at $85.09 Monday afternoon, up just more than 5 percent.


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    Well deserved payout. Legere has revitalized T-Mobile and should be well compensated for his achievements.

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    He is doing it by leaving the company in better shape than when he left. My goal, never to be realized, is to be fired as a coach and paid $5,000,000 to go away.
    iPhone 11 is my current primary phone. But I have more phones than lines. Back to only Prepaid with the changes in the economy.

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    I don't know much about big corporate executive compensation and bonuses, but considering all the BILLIONS that JL led T-Mo to make for T-Mo/DT $50 mil strikes me as a modest, well deserved bonus.

    I remember when T-Mo was a feeble also-ran behind Sprint. They did not get to where they are by having a Progressive-Dream worker & union controlled BOD. It took inspired leadership and considerable risk taking to pull it off.

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    Quote Originally Posted by bobdevnul View Post
    I don't know much about big corporate executive compensation and bonuses, but considering all the BILLIONS that JL led T-Mo to make for T-Mo/DT $50 mil strikes me as a modest, well deserved bonus.

    I remember when T-Mo was a feeble also-ran behind Sprint. They did not get to where they are by having a Progressive-Dream worker & union controlled BOD. It took inspired leadership and considerable risk taking to pull it off.
    Not to discount JL's excellent work, but it took more than his long hair, casual dress, foul mouth, and inspired leadership to turn T-Mo around. It took $6 billion of AT&T's money and a long term roaming agreement from the failed AT&T/T-Mo merger's penalty clause to jump start T-Mo's rise.

    What Legere did brilliantly was not squander those things- he used the cash infusion to build out T-Mo's network to a point that when AT&T pulled the plug on the roaming the second the penalty expired, the loss of coverage was minimized. He also leveraged the expanded coverage (first AT&T's then T-Mo's own) and his uncarrier initiatives to build T-Mo's reputation and customer base.

    During his tenure, T-Mo was punching well above its weight class. With the completed merger, T-Mo has finally become the carrier Legere's public persona has been pretending it was.




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    John Legere has eliminated the 2 year contract and lower the cost of Cell phones for every customers of all networks. I still remember this advertisement video when at the time, I said BS to T-Mobile and they proved me wrong. T-Mobile did what they said they were going to do. This was the start of the Uncarrier that changed the business model of all cellular networks services.


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    John Legere was appointed CEO of T-Mobile US on September 22, 2012.

    On September 27, 2012 TMUS closed @ $23.42. On March 31, 2020 TMUS closed @ $83.90. In roughly 8 yearsand 6 months the value of T-Mobile US increased 258.24%.

    Over that same time span, Apple, Inc., increased 168.83%; Verizon increased 17.91%; and AT&T lost 22.68%.

    That's why John Legere deserves his payout.

    He did not get as much as Marissa Mayer got for driving Yahoo into the geound: $184 million: https://www.bbc.com/news/business-39705328

    And his total compensation is no where near MikeTrout's is for playing baseball $430 million.https://www.nytimes.com/2019/03/19/s...ct-angels.html

    However, as far as T-Mobile being the first with unlimited, in 2002, before Cingular bought them, I had the AT&T charter Plan, $99.00 per month, Unlimited talk and unlimited text. If I was in the USA and the number I was calling was in the USA, then no charge. There was some data with that, I think, but no much at all. Just enough to check sports scores and news headlines.

    Oh!, yes, and I owned the Nokia 6310i. I looked on an invoice and there was no "equipment charge", just service plus taxes and fees.

    Next time a company needs to be driven into the ground, I'll do it for 1/4 of what Marissa Mayer charges.
    Last edited by Greenmule; 04-08-2020 at 07:27 AM. Reason: phone ownership

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    Quote Originally Posted by elecconnec View Post
    but it took more than his long hair, casual dress, foul mouth, and inspired leadership to turn T-Mo around. It took $6 billion of AT&T's money and a long term roaming agreement from the failed AT&T/T-Mo merger's penalty clause to jump start T-Mo's rise.
    This is inaccurate information in order to try to lessen the great accomplishments of John Legere. First of all, AT&T only gave Deutsche Telekom $3 billion of money and not $6 billion. The other amount was spectrum value that some claimed had a market value of $3 billion. However AT&T only considered it $1 billion as this article states.

    https://arstechnica.com/tech-policy/...n-breakup-fee/

    As far as the roaming agreement, while it is true it was included in the breakup agreement, but it was not free roaming. Simply T-Mobile had the option to roam on AT&T's HSPA network. However, as we saw after that, T-Mobile rarely let their customers use it and in fact even filed complaints on the high price of AT&T's roaming charges:

    https://arstechnica.com/information-...roaming-rates/

    That roaming agreement for the most part was not very valuable as T-Mobile didn't want to pay exorbitant roaming rates.

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    Sprint deal comes with big payout for outgoing T-Mobile CEO

    Quote Originally Posted by elecconnec View Post
    Not to discount JL's excellent work, but it took more than his long hair, casual dress, foul mouth, and inspired leadership to turn T-Mo around. It took $6 billion of AT&T's money and a long term roaming agreement from the failed AT&T/T-Mo merger's penalty clause to jump start T-Mo's rise.

    What Legere did brilliantly was not squander those things- he used the cash infusion to build out T-Mo's network to a point that when AT&T pulled the plug on the roaming the second the penalty expired, the loss of coverage was minimized. He also leveraged the expanded coverage (first AT&T's then T-Mo's own) and his uncarrier initiatives to build T-Mo's reputation and customer base.

    During his tenure, T-Mo was punching well above its weight class. With the completed merger, T-Mo has finally become the carrier Legere's public persona has been pretending it was.




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    I love how the att people credit their beloved carrier for starting T-Mobiles rise. They simply cannot give John Legere enough credit for the dramatic turnaround. I wonder what they will say when T-Mobile takes over the second spot from att? Will they credit their beloved carrier for that?

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    Quote Originally Posted by T-Buttler View Post
    I love how the att people credit their beloved carrier for starting T-Mobiles rise. They simply cannot give John Legere enough credit for the dramatic turnaround. I wonder what they will say when T-Mobile takes over the second spot from att? Will they credit their beloved carrier for that?
    Of course, whatever mental acrobatics it will take to justify their biased claim. Then they'll complain how the merger ruined their MVNO rates.

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    Quote Originally Posted by jet1000 View Post
    This is inaccurate information in order to try to lessen the great accomplishments of John Legere. First of all, AT&T only gave Deutsche Telekom $3 billion of money and not $6 billion. The other amount was spectrum value that some claimed had a market value of $3 billion. However AT&T only considered it $1 billion as this article states.

    https://arstechnica.com/tech-policy/...n-breakup-fee/

    As far as the roaming agreement, while it is true it was included in the breakup agreement, but it was not free roaming. Simply T-Mobile had the option to roam on AT&T's HSPA network. However, as we saw after that, T-Mobile rarely let their customers use it and in fact even filed complaints on the high price of AT&T's roaming charges:

    https://arstechnica.com/information-...roaming-rates/

    That roaming agreement for the most part was not very valuable as T-Mobile didn't want to pay exorbitant roaming rates.
    Sorry, I was working off my partially incorrect recollection, not a series of Google searches.

    You're right. It was "only" $3 billion in cash. And $3 billion (according to T-Mo, $1 billion according to AT&T- god bless accountants) in AWS spectrum, mostly in major cities (like mine, Denver) where T-Mo previously only had 10MHz or less.

    As to the roaming, don't kid yourself. T-Mo used it. A lot. According to articles from the day, it instantly increased T-Mo's pop coverage from 230 to 280 million potential subscribers:

    https://www.engadget.com/2011-12-20-...nt-gets-d.html

    There was even a thread here complaining about loss of coverage when it was shut off and some rural folks were suddenly left with only the native coverage T-Mo had built out while the agreement was in force:

    https://www.howardforums.com/showthr...ion-Question)?

    But sure, pretend JL turned T-Mo around with his charm and wit alone, despite headlines like:

    "T-Mobile Announces New LTE Network with Funds from AT&T Breakup Fee"


    https://www.ibtimes.com/t-mobile-ann...kup-fee-415276

    Again, I'm not saying Mr. Legere didn't do a great job. He did. I'm just saying that rather than claiming he could walk on water, perhaps we could just agree he was an excellent swimmer?

    It takes two things to turn a wounded company around- effective leadership, and the resources those leaders need to get the job done. In 2011, pre-failed merger, T-Mo's prospects looked as bleak as Sprint's did in 2019, pre-the current merger. T-Mo got the needed resources from AT&T, and the leadership from Legere. It took both to make T-Mo a viable competitor.



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    Quote Originally Posted by T-Buttler View Post
    I love how the att people credit their beloved carrier for starting T-Mobiles rise. They simply cannot give John Legere enough credit for the dramatic turnaround. I wonder what they will say when T-Mobile takes over the second spot from att? Will they credit their beloved carrier for that?
    JL took over a weak #4 T-Mo shortly after the AT&T deal fell through. JL took a bunch of lemons and made lemonade, with the AT&T money as the sugar. AT&T was arrogant to agree to that deal failure payment. How is that crediting AT&T for starting T-Mo's rise?

    $3-$6 billion actually isn't much capital in the cell business. JL was brilliant (and lucky) to compound that into what T-Mo has become. AT&T deserves no admiration. They seeded the rise of a competitor to encroach, and possibly overtake, their market position. They look more like arrogant suckers on that deal.

    I'm not a fan of any carrier. That makes about as much sense as being a fan of a brand of gasoline. I just use the cell service that is the best performance for the money. Right now that is Verizon via a cheap MVNO. They are the only one that has good signal and speed inside my house. When it is time for a new phone in a couple of years maybe T-Mo will have the best performance vs price.

    I am a fan of the Sprint deal. Sprint made bad and unlucky business decisions that left them with no path forward other than failure. They were wasting a precious national resource for years by not being able to deploy their nation wide spectrum licenses. T-Mo should be able to do very good things with band 41/n41. That is the major thing that Sprint had that was worth much.

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    Sprint deal comes with big payout for outgoing T-Mobile CEO

    Quote Originally Posted by bobdevnul View Post
    JL took over a weak #4 T-Mo shortly after the AT&T deal fell through. JL took a bunch of lemons and made lemonade, with the AT&T money as the sugar. AT&T was arrogant to agree to that deal failure payment. How is that crediting AT&T for starting T-Mo's rise?

    $3-$6 billion actually isn't much capital in the cell business. JL was brilliant (and lucky) to compound that into what T-Mo has become. AT&T deserves no admiration. They seeded the rise of a competitor to encroach, and possibly overtake, their market position. They look more like arrogant suckers on that deal.

    I'm not a fan of any carrier. That makes about as much sense as being a fan of a brand of gasoline. I just use the cell service that is the best performance for the money. Right now that is Verizon via a cheap MVNO. They are the only one that has good signal and speed inside my house. When it is time for a new phone in a couple of years maybe T-Mo will have the best performance vs price.

    I am a fan of the Sprint deal. Sprint made bad and unlucky business decisions that left them with no path forward other than failure. They were wasting a precious national resource for years by not being able to deploy their nation wide spectrum licenses. T-Mo should be able to do very good things with band 41/n41. That is the major thing that Sprint had that was worth much.
    I agree with your assessment. There are a few on here that believe that the meager billions that att gave T-Mobile is what jumpstarted the big network build out. As you said it wasn’t a very big amount to begin with. So I believe T-Mobile would of still turned around with or without the break up money. John Legere would have gotten the funding he needed one way or the other. Att’s beloved fans would like us to believe otherwise. They are worried that T-Mobile will soon be the number 2 carrier and they are panicking.

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    Quote Originally Posted by bobdevnul View Post
    $3-$6 billion actually isn't much capital in the cell business. JL was brilliant (and lucky) to compound that into what T-Mo has become. AT&T deserves no admiration. They seeded the rise of a competitor to encroach, and possibly overtake, their market position. They look more like arrogant suckers on that deal.

    $3-6 Billion was a heck of a lot of money to T-Mo in 2011, when they were saddled with debt and their market value was estimated to be $23-25 billion. (https://dealbook.nytimes.com/2011/03...or-39-billion/) That AT&T penalty payout equalled 25% of T-Mo's entire value at the time.

    And it seems, it only cost $4 billion for T-Mo to deploy LTE. Pretty handy to be handed a "free" $3 billion of it right before starting...
    https://www.ibtimes.com/t-mobile-ann...kup-fee-415276

    "TMobile USA is putting resources from its competitor to good use.

    "The Bellevue, Wash. company, the fourth largest wireless carrier in the U.S., announced plans to build a new $4 billion Long-Term Evolution (LTE) wireless network. The cost is the same as the breakup fee that AT&T (NYSE: T) was required to pay its parent, Deutsche Telekom, following a failed $39 billion merger deal.

    "A new network will give T-Mobile customers higher data speeds. The plan calls for installation of 37,000 cell sites and repurposing the use of wireless spectrum. T-Mobile received $1 billion of spectrum from AT&T along with $3 billion in cash..."

    Again, I'm not trying to take any thunder away from Legere- cash alone can't fix a failing carrier; just look at the infusions of cash Sprint has squandered repeatedly over the years without fixing their core issues. Legere used the breakup fee and the rest of T-Mobile's assets like Michaelangelo used a slab of marble.

    I'm just saying I don't think Legere could've pulled it off as well or as fast without the penalty from the failed merger. (And frankly, he probably wouldn't have been given the chance- at the time, Deutsche Telekom wanted badly to unload the poorly performing T-Mo USA, which was why they hadn't yet upgraded to LTE at that point- DT wasn't going to throw good money after bad. Without the penalty payout, DT would've probably continued running T-Mo into the ground until they found another "sucker" to dump T-Mo onto, probably Sprint.)




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    Perhaps 4 billion to deploy it on their AWS spectrum...

    ...but it cost more than 4. They paid 2.4 billion just for Verizon's A Block. They paid Leap 400 million for theirs. And then 23 other hodge podge A Block purchases. There's the 8 billion at the 600 mhz auction. And of course, the costs to buy equipment and install it across the country.

    He did well to find the sweet spot in pricing to keep cash coming in and still offer value. And he did come in after the merger was rolled back, offering him a clean slate to start over.

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