PROFILE / RAYMOND W. SMITH : For Bell Atlantic CEO, a Deal of a Lifetime
Raymond W. Smith, the gregarious, ambitious chief executive of Bell Atlantic Corp., once wrote a play about four friends who reach age 50 without accomplishing anything.
It appears Smith is unlikely to be a character in his own play. In fact, he just may close the deal of a lifetime by merging Bell Atlantic with its neighbor Nynex to create the nation’s second-most-powerful communications company and an important global player.
Still, Smith knows that signing an agreement to merge is only the first stage in a long process that could easily turn sour if regulators object or if market conditions suddenly change. Smith has come close to making history before, only to see it slip out of his grasp.
Smith shook the communications world and sparked of wave of merger activity when he announced a groundbreaking 1993 agreement to acquire Tele-Communications Inc. for $16 billion. But when new federal price caps cut deeply into TCI’s cash flow and share prices soon afterward, the deal fell apart, setting off a chain reaction of similar broken deals among other companies.
Smith and TCI Chief Executive John Malone, who together had trumpeted the dawning of an age of interactive television, now publicly bickered over whose fault it was.
It didn’t much matter. Their vision of movies-on-demand and education from every television station wouldn’t have succeeded anyway.
Both cable and telephone companies discovered that technical problems and the high cost of offering such services would make such a venture prohibitive for the foreseeable future.
Three years ago, Smith predicted that close to 3 million homes in his company’s territory would be wired for interactive television service by the end of 1996. Today, Bell Atlantic has only small experimental services going in a couple of cities. But then, for Smith, progress hasalways been a push for something more, something better.
He was born to a poor family (his father began work at a Pittsburgh steel mill at 13) and worked his way through college, earning an engineering degree at Carnegie-Mellon University. He then joined Bell of Pennsylvania (then part of AT&T;) and earned an MBA at the University of Pittsburgh by taking night classes.
Smith likes to tell stories of how he rebelled against AT&T;’s complacent bureaucracy as he rose through the ranks at Bell.
When he couldn’t get AT&T; to fill potholes in the parking lot, he did it himself and sent the bill to his superiors.
According to one story, he messed up his office, scattered dead pigeons around and invited a senior executive to visit as part of a ploy to get his offices remodeled.
When AT&T; was split into seven regional Bell operating companies in 1984, Smith moved quickly to add new services, winning the respect of Wall Street with one of the best productivity records among the Bells.
Smith caught multimedia fever while playing with an interactive computer system at the Getty Museum. That led to the TCI deal.
Today Smith continues to tout the importance of interactive television.
But in recent years, he’s focused on more traditional sectors. He began to woo Nynex with a joint venture that last year merged their cellular operations, making it cheaper and easier, for example, to make cellular phone calls between New York City, controlled by Nynex, and New Jersey, controlled by Bell Atlantic.
With the merger, Smith is also expected to agree to hand over the reins some time in the future to his younger partners at Nynex. But that won’t matter.
If the deal closes, Smith will have had his opportunity to rule over a new communications empire. He won’t be talking to old friends about missed opportunities.
