Joseph Wright, Former Chairman, Intelsat Ltd.

Via Satellite: What was your assessment of the industry when you first arrived?

Wright: One of the first panels I ever participated on — I had only been at PanAmSat a couple of months — discussed what we would be doing in the future. Everyone talked about how much capital they were putting in the business and how they had the largest satellite platforms, etcetera. I said, ‘Doesn’t anybody think of profitability, return on investment, free cash flow?’ There was a silence in the room. I laid down my marker probably earlier than I should have, because nobody would have dinner with me that night. That was fine, but it gave me a good idea of what the competition was like.

Via Satellite: Did you plan to change the operations from day one?

Wright: When I came on at PanAmSat we were already in an oversupply situation and on the downward curve in overall industry revenues. Prices were eroding and we had a note for $1.9 billion due to Hughes-General Motors in six months after I got there. Given those factors, it was easy to convince the engineers to go along with the new business model. They didn’t have a choice. I can remember a conference in Paris three or four weeks after I arrived and Conny Kullman and Giuliano Berretta were having a discussion on how to breakup the PanAmSat fleet. They looked at it as we would have to go into some form of liquidation because we would not be able to pay off the Hughes note.
Whether it was marketing, finance or engineering, one of the first things I told my executive team at PanAmSat was that I would listen to all opinions, but we had to move quickly and we were not taking votes. It’s not the perfect management style but one that was necessary in a period that was not necessarily a crisis situation but was a problem situation. I was fortunate to have a management team that rallied around it. The entire team was extraordinary. People may have called us cowboys, but we were an organized group of cowboys. We moved very, very quickly. We didn’t rely on getting 100 percent of the information to make decisions, and we performed. That style carries through today with David McGlade and Intelsat. It’s tough to do, but they’ve done it.

Via Satellite: How did your plan lead you to the smaller satellites?

Wright: The idea is that the incremental cost per transponder was going to be so tight that it was not a good capital decision to go with larger satellites at that time. The cost per transponder was about the same as larger platforms. My feeling was that if you put up a platform and it’s only 50 percent utilized — like some of the larger ones that were being launched — you’re losing real value from the get-go. The return on investment for a satellite can take several years, so our idea was to design for the market rather than the manufacturer. If the demand was there, we would put up another small satellite. At that time we were criticized for going against the norm, but it proved pretty smart. Capital conservation is one of the ways you can help increase your bottom line.

Via Satellite: What was your assessment of the industry when you first arrived?

Via Satellite: Did you plan to change the operations from day one?

Via Satellite: How did your plan lead you to the smaller satellites?

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