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Last year, activist investor fund Elliott Management relaunched a campaign for “Restoring the Castle”
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Co-founder Ted Miller, who left the CEO role in 2001, says he has a plan to make Crown Castle great again
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Crown’s board is saying they plan to right the ship without his help
Crown Castle is basically saying “thanks but no thanks” to one of its co-founders who says he wants to repair the company’s culture and bring it back to prosperity.
In a letter to Crown Castle published Tuesday, company co-founder Ted Miller, 72, said he and his team at Boots Capital Management LLC have a plan for making things right again at Crown Castle.
The plan includes selling the fiber business, becoming a pure-play wireless tower company and running the company more efficiently.
“Crown Castle would be worth tens of billions more today if it had simply held on to its international towers and never ventured into fiber,” Miller told Crown Castle Chairman Rob Bartolo in a letter published Tuesday.
Under his plan, Miller would return to the company as executive chairman – he told Fierce that he does not want to be CEO – and he would bring three other individuals to the board, besides himself. The other three are Charles Green III, David Wheeler and Miller’s son-in-law, Tripp Rice.
In a statement, Crown Castle said no dice to the board nominations. “While we recognize Mr. Miller’s contributions to the formation of Crown Castle more than twenty years ago, Boots Capital’s nominees do not possess the relevant expertise and experience to successfully oversee Crown Castle’s strategy,” Crown stated.
Crown crawling back
Following Crown’s earnings call in January, it looked as though it was starting to piece together a plan. Newly seated interim CEO Tony Malone, a former CTO at Verizon, led the call, explaining that he was optimistic about Crown’s future. A search was underway for a permanent CEO and the board was evaluating what to do with its fiber business.
All of this was going on after Crown Castle came under two attacks by activist investor Elliott Management. In 2020, Elliott blasted Crown mostly for its fiber strategy. Then in 2023, Elliott came back and said Crown disregarded its earlier analysis and continued to underperform compared to its peers.
Not long after Elliott’s second attack, Crown Castle announced the departure of then-CEO Jay Brown, who had been with the company for nearly 25 years. Elliott had been calling for new management as well as a review of the fiber business.
Miller attempts comeback
Now Miller is publicly coming out as wanting to regain control of the company. In an interview, he said he has nothing against Elliott, which identified issues that need to be fixed, but they’re not in it for the long term.
He shared a 39-page plan – a redacted version of it was released Tuesday – in a 90-minute call with the board last month. “Perhaps most revealing was that during my board interview, one director questioned whether we were ‘too in the weeds,’” Miller said. “Yes, we’re in the weeds. It’s what shareholders expect and demand of their board. Board members should be also.”
Part of Miller’s plan is to use digital twin and AI technology to increase efficiencies at Crown. He said Crown Castle currently has 18 towers for each employee, “the worst” among the three major tower providers. He wants to take that number to 23 for each employee by 2026, which is in line with rival American Tower’s U.S. tower operations.
Long history
Miller co-founded Crown Castle in 1994 – he wrote the company’s first check – and served as CEO from 1996 to 2001.
He pointed to a couple major missteps at Crown over the years.
When he left Crown in 2001, it was the first and only international tower company. At one point, they talked about merging with American Tower, but Steve Dodge, the founder of American Tower, declined to engage in talks because he didn’t want to expand outside of the U.S., according to Miller.
Eventually, Crown Castle sold its international assets and American Tower acquired assets outside the U.S. – so despite Crown being known as “Crown Castle International,” it’s not really indicative of its current status. American Tower has the more American-centric name even though it’s global.
Miller questions what the market cap of Crown would be today if it had held onto its international markets.
On the fiber front, Miller’s team put together a list of over 20 potential buyers and financial sources that are under NDA agreements. In their presentation, they said Crown’s fiber business could be sold for up to $15 billion.
Asked if the small cell part of the business would need to be sold along with the fiber business, Miller said they looked at various ways to sell the fiber business and/or keep it, but it’s so complicated to sell the fiber backbone without the small cells that they really need to be sold together. That’s in part because they want to get a deal closed before the end of the year to get more than $1 billion of tax benefits that would not be available beyond year’s end.
Crown Castle’s current management team and board acknowledged having engaged in “multiple discussions” with Miller since late last year and they’re not budging.
“The Crown Castle board and management team are confident in the actions the company is taking to remain well positioned for long term success and shareholder value creation. In particular, during the last two months the company has made significant strides forward toward creating a stronger and more valuable Crown Castle,” the company said this week.