Sprint hires BellSouth’s No. 2 exec as new CEO

Amy Shafer

Wednesday, March 19, 2003 | 9:55 a.m.

KANSAS CITY, Mo. -- Hours after receiving permission from an arbitrator, Sprint Corp. named the No. 2 executive at rival BellSouth its new chief executive.

The Overland Park, Kan.-based telecommunications firm said Gary D. Forsee, vice chairman of BellSouth and chairman of its wireless subsidiary, Cingular, will take over Wednesday. A former Sprint executive, Forsee will also take a seat on the company's board.

Sprint spokesman Mark Bonavia said Forsee was expected to arrive in Kansas City next week.

"It is a pleasure to be a part of this great company again," Forsee said in a statement released by the company late Tuesday night.

"Sprint has an impressive heritage of innovation and customer service," Forsee said. "When you combine that with the company's strong financial position and enviable set of assets, you quickly realize the incredible potential Sprint possesses."

The 52-year-old Forsee replaces William T. Esrey, who was forced out by Sprint's board over their concerns about his use of a questionable tax shelter. Sprint said late Tuesday night Esrey will continue in his role as chairman during a transition period.

"Gary is a proven leader and will do an excellent job heading Sprint," Esrey said in the statement. "He has a broad background of telecommunications experience that includes leading wireline, wireless and international operations. ... We welcome him home."

Sprint's appointment of Forsee came after former federal Judge William Webster ended a two-month dispute between Sprint -- the main local phone company in Las Vegas -- and BellSouth over his fate.

Webster, also a former CIA and FBI director who conducted three days of closed-door hearings last week, imposed several restrictions Tuesday on Forsee in his arbitration ruling to protect BellSouth from the disclosure of trade secrets. Among them is that Forsee can not participate in any merger and acquisition discussions or sales discussions for 12 months.

Sprint's board said late Tuesday the conditions contained in the ruling are acceptable.

But Jeff Kagan, an independent telecommunications analyst in Atlanta, said Webster's order "leaves the CEO out of the loop."

"Without the restrictions, Gary Forsee is exactly the white knight they need," Kagan said. "But with the restrictions, he can't do what they need him to do."

Bonavia, however, said the board was "not in the least" concerned about the restrictions.

In his 18-page order, Webster said that in his position at BellSouth, Forsee was at the nerve-center of its operations. He was intimately involved in its merger and acquisition discussions, and has knowledge that could hurt BellSouth if passed on to Sprint, Webster said.

However, Webster said, "While Mr. Forsee's agreement to protect BellSouth's and Cingular's confidential information is binding and enforceable, it does not preclude his taking the employment opportunity offered by Sprint."

In addition to the other restrictions, Forsee can't participate in any consideration of or efforts to solicit or hire any employees of BellSouth or Cingular for 12 months. He also can't participate for 12 months in any strategies relating to the joint marketing of wireline and wireless services or combinations of local and long-distance services in those regions served by BellSouth.

Forsee joined BellSouth in 1999 after nearly a decade in various positions with Sprint.

Atlanta-based BellSouth went to court in January to stop Forsee from taking Esrey's job as chief executive of Sprint, citing concerns he could disclose key information about BellSouth's business.

BellSouth wanted Forsee to honor a noncompete clause in his contract that prevents him from taking a job at a rival company for 18 months. BellSouth and Sprint both sell long-distance service in nine Southeastern states and they compete nationally for wireless customers.

A restraining order preventing Forsee from jumping to Sprint expired Tuesday and was rendered moot by the arbitrator's decision, which is binding.