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WorldCom’s Ebbers rises from basketball coach to communications mogul

October 3, 1997 GMT

NEW YORK (AP) _ Coaching high school basketball in Mississippi doesn’t seem like the ideal starting place to build a telecommunications empire. But Bernard Ebbers doesn’t do things by the book.

The no-nonsense chief executive of WorldCom Inc., who gained national attention by offering to buy MCI in the biggest takeover in U.S history, also spent time selling cars and renting motel rooms.

Along the way, he has shown repeatedly that quick feet and a brash attitude can make his big gambles pay off.

``He’s definitely a guy with a different mold, which is important because of the way the industry keeps changing,″ said Jeff Sadler, an analyst with Atlanta-based Robinson-Humphrey, a unit of Smith Barney. ``If you did things the old fashioned way you’d be stuck where MCI and Sprint are now.″

In his biggest public moment yet, Ebbers was willing to wear a suit instead of his typical jeans to announce his MCI offer, but he wouldn’t put on the polished veneer that so many chief executives wear.

He wasn’t shy about calling a dumb question a dumb question and was happy to take a shot at the amount he would pay the investment bankers who advised him on the deal.

``As little as we can.″

Ebbers is willing to dream out loud about bigger things. Announcing the MCI deal on Wednesday, he floated the idea of taking over British Telecom, which was on the verge of buying MCI itself and now stands to be pushed aside.

But don’t mistake him for a visionary. Ten years ago, Ebbers never expected that deregulation and missteps by the industry’s big players would present such an opportunity.

``We’re not trying to be an MCI or a Sprint,″ he told the Jackson Journal of Business then. ``Never will. We really don’t want to be. We are a small player in a big industry, and there is a niche there for us.″

Today, WorldCom is by far the largest operator of the vast data networks that make up the Internet, and will trail only AT&T in the long-distance business if its $29.4 billion bid for MCI succeeds.

Ebbers presides over a management team culled from more than 40 acquisitions the company has made over the last decade.

``His coaching days are paying off, because he’s brought in a lot of high-priced talent ... and he’s getting them to play as a team,″ said Steve Shook, an analyst at Interstate/Johnson Lane in Charlotte, N.C.


Ebbers, 56, was born and raised in Edmonton, Alberta. Despite his Canadian origins and the global-sounding name of his company, Ebbers explained why WorldCom would be a better fit for MCI than British Telecom by saying: ``They just don’t live here.″

He received a basketball scholarship at Mississippi College and majored in, of all things, physical education. After graduating, he coached high school teams for a year before investing in a hotel in 1974.

Soon, Ebbers had accumulated a chain of Best Westerns in Mississippi and Texas and a car dealership in Columbia, Miss.

At the advice of his friends, Ebbers invested in a tiny long-distance company called LDDS, even though he knew little about the phone business. That was in 1983, just months before the breakup of AT&T.

The company struggled for a few years and was about to close its doors before Ebbers took over day-to-day operations and began buying up competitors.

``He was worrying about getting a switch in Memphis and Little Rock to complement his switch in Jackson. And then he put a switch in Louisville, and then Atlanta, and he just kept building,″ said Bob Bolen, an analyst with J.C. Bradford & Co. in Nashville.

``If you ask him about changing industry trends two years out, three years out, he will say ‘I don’t know,’ which is unusual for a CEO. But he’s focusing on what’s inside the horizon,″ Bolen said.

That horizon changed drastically in 1996, when a new law allowed long-distance, local and cable companies into each others’ businesses.

LDDS had already grown into the fourth-largest long-distance company by acquiring WilTel Inc. for $2.5 billion, but Ebbers knew he needed to offer other services to survive.

Late last year, after the company was renamed WorldCom, he spent a whopping $12 billion for local carrier MFS Communications, which had just acquired a big Internet-access business.

How can he afford all the acquisitions with annual revenues that reached only $4.5 billion last year? WorldCom pays for nearly all its deals in stock, which means all Ebbers has to do is make believers on Wall Street to keep his currency valuable.

And so far it’s worked. A dollar invested in WorldCom at the end of 1989 would be worth $238 today, a bigger return than even Microsoft Corp. could provide over the same span.

Which brings to mind another comparison ...

``Bernie Ebbers is the telephone equivalent of Bill Gates, there’s no doubt about,″ Robinson-Humphrey’s Sadler said. ``Who new who Bill Gates was in 1982? No one.″