Cablefax The Magazine - July 2015 - 8

2015 Top Ops Awards
MSO FINANCIAL EXECUTIVE OF THE YEAR
Mark Stephan
Mediacom
As the longest-tenured CFO in the industry,
Mark Stephan remains a relatively
quiet guy. But he has been integrally
involved in deals and transactions that
have resonated in big ways for Mediacom
and the industry at large over the course.
" I've known Mark for over 27 years. He is very smart, very low key and
loyal, " says Mediacom founder, chairman & CEO Rocco Commisso.
" Mark's not into self-promotion, but that doesn't mean that he doesn't
have a lot of accomplishments. "
Stephan's list, in part, encompasses raising $14 billion in equity and
debt, including refi nancing rounds that led to Mediacom's acquisition
of 30 cable systems totaling $3.4 billion, funding almost $4
billion in capital investments in systems and refi nancing long-term
debt. Along the way, he helped engineer Mediacom's public offering
in 2000 and its return to the ranks of privately held companies 11
years later.
Before offi cially joining the cable industry, Stephan helped chart its
growth from his days working at Royal Bank of Canada, where he
was originally engaged in corporate lending, mainly to Fortune 50
companies. Living on the lakefront in Chicago, he didn't want to go
to New York, where " people are loud and brash. " Finally, he made
the jump to the Big Apple.
During his tenure as manager of telecommunications and media
fi nancing, Stephan's client list included Cablevision Systems, Century,
Comcast, Continental, Daniels, Houston Industries, Jones Cable,
Marcus, Prime Cable, Rifkin, TCI, United Cable, Time Inc., Turner
Broadcasting and Cablevision Industries where Commisso was
working as EVP and CFO. Stephan joined his former client in 1993.
" Rocco was tired of managing relationships with 40 banks, " says
Stephan, noting that he then stepped into that role as VP, fi nance and
FAST FACTS
Fast Facts
uThe longest-tenured CFO in cable, Stephan has been
with Mediacom since 1996.
uStephan helped engineer Mediacom's initial public
offering in 2000 and its return to the ranks of privately
held companies in 2011.
uDuring his tenure at Royal Bank of Canada, Stephan
helped provide funding for Comcast, Cablevision Systems
and Turner Broadcasting, among cable notables.
8
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treasurer. Stephan also played a hand in Cablevision Industries' sale
to Time Warner in 1996.
That also was the year he joined Mediacom.
" I founded Mediacom in 1995 and acquired my fi rst system,
Ridgecrest, California, in 1996, Mark was the very fi rst employee
that I hired at Mediacom, " said Commisso.
Stephan, serving as senior vice president and CFO, said Mediacom
was " a two-man shop " in the early days. It embarked on a strategy
of acquiring undervalued systems in smaller markets, as it looked to
close the digital/technological divide between its systems and those
serving major markets, raising equity and debt to upgrade plant.
Today, the company serves 1.3 million video, data and voice customers
in 22 states, with its transaction trek bringing former Triax
and AT&T systems-the latter deal closed for $2.1 billion in June
2001 as Stephan secured a $2.5 billion capital raise in equity and
debt-into the Mediacom portfolio.
The year before, Stephan had steered Mediacom's initial public
offering. " Mark has a great sense of timing for the market, " said
Commisso. " Right after the Time Warner-AOL merger, we went public
at the peak of valuations for cable at 18 times cash fl ow. " By way of
contrast, Charter is attempting to purchase Time Warner Cable today
at a little over nine times cash fl ow.
More recently, Stephan, named a Cable Pioneer in May, has been focused
on refi nancing roughly half of Mediacom's capital structure, some $2
billion. " We held on to some cheap debt for the past seven years, until
the very last days, " he explains. Interest costs-despite the same level
of borrowings-have dropped from $240 million annually in 2007 to
an estimated $150 million in the current year. " The cost of debt is very
competitive. It's not because we're borrowing less, " said Stephan.
Despite being rated as " junk " for many years, Mediacom now has the lowest
cost of debt at 4.7% of any public-semi-public MSO, including Comcast,
according to company offi cials. Mediacom was upgraded by S&P in 2014
and by Moody's earlier this year.
According to Stephan, Mediacom's upgrades in infrastructure has
it in good shape to meet the video, data and voice needs of its residential
customer base, while also affording the capabilities to serve
commercial business. He said there are " big game " opportunities in
helping to build out cell towers across its footprint and there is " so
much runway ahead with mom and pop businesses. We have the
best network available to service both large and small businesses. "
With the industry amidst another consolidation period, Media is keeping
its options open during the current wave. " Dr. Malone came back to the
domestic market and started the consolidation trend, " said Stephan,
adding Mediacom is generating strong cash fl ow. " We're in a great
place to be a buyer or seller, depending on market conditions. "
- Mike Reynolds
July 2015
Cablefax: The Magazine
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Cablefax The Magazine - July 2015

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