By Mike Boyer
The Cincinnati Enquirer

Cincinnati Bell Inc.'s board of directors is considering management changes - including looking outside the company for a new leader - after selling most of its money-losing broadband business.

Chairman Phil Cox said Tuesday the board is weighing what kind of senior management the local telephone company needs now that it is a smaller and more focused business.

June 13, Bell sold most of its Austin, Texas-based Broadwing Communications Services unit to a new, privately held company, C III Communications LLC, for about $109 million.

The asset sale was a key part of a $2 billion financial restructuring undertaken by the company to reduce bank debt and extend repayment on about $1 billion in debt coming due next year.

Cox, who succeeded former chairman Daniel Meyer last month, said the board's move doesn't signal any dissatisfaction with CEO Kevin Mooney or chief operating officer Jack Cassidy, both of whom are candidates to lead the company and are members of the board.

"It's not a negative reflection on either Jack or Kevin,'' Cox said. "The company has changed, and it's looking at its options.''

In a Securities and Exchange Commission filing last week, Bell disclosed that it has retained an executive search firm to identify possible leadership candidates from outside the company as well.

Cox declined to identify the search firm. He said that before the board looks at any candidates, it wants to establish a process of evaluating the company's strengths and weaknesses and then consider internal and external candidates.

He declined to be tied to a timetable but said the process could take several weeks.

Matt McGeary, senior research analyst with Fort Washington Investment Advisors, called the board's review prudent.

"They're transforming themselves. It's a completely different company than it was a year ago,'' he said.

Bell shed the national broadband network, acquired in late 1999 for more than $3 billion, and dropped its Broadwing Inc. name in May. It will concentrate on reducing debt and operating its 130-year-old local telephone network as well as its wireless and high-speed Internet services.

With the asset sale, Cincinnati Bell is also shedding about $1 billion in annual revenues and annual losses of more than $200 million.

With a smaller company, a smaller management staff will be required, McGeary said.

Late last month, the company extended to Aug. 31 its employment agreement with Mooney, named CEO in September when former chairman and CEO Rick Ellenberger resigned.

The employment agreement, calling for incentives equal to Mooney's annual salary of $660,000 and bonus of $660,000 on successful completion of the financial restructuring, allowed the CEO to terminate his employment within seven days of the asset sale.

Cox said the board could extend Mooney's contract again, if its management review isn't completed by the end of August.

Mooney couldn't be reached for comment Tuesday. But previously, he has indicated his willingness to remain CEO as long as the board wants him.

A closer look at Cincinnati Bell Inc.

• Leadership: Chairman Phillip R. Cox, president of Cox Financial Corp., a director since 1993.

Kevin W. Mooney, chief executive officer, formerly chief operating officer and chief financial officer. He joined the company in 1990

Chief operating officer John F. Cassidy is also president of its local telephone business and led the successful launch of its Cincinnati Bell Wireless business.

• Business: Cincinnati Bell is the local telephone provider in Greater Cincinnati with more than 1 million customers. Its local, long-distance, wireless and high-speed Internet service have revenues of more than $1 billion and more than 3,000 employees.

• At issue: With the sale of its money-losing broadband business, the company is focusing on its Cincinnati-based businesses to reduce its roughly $2.5 billion in debt and provide growth.

E-mail mboyer@enquirer.com