The letter comes as Crown Castle rejected four nominations from Miller to the board of the company; one of which was himself.
Miller writes that six months of discussions with shareholders, customers and employees have resulted in the same conclusion; that Crown Castle lacks leadership, expertise, vision and urgency.
He outlines an eight-point plan he believes he should put in place as executive chairman of the towerco.
Miller's nominations for the board were rejected by Crown Castle following interviews. Miller notes that the board failed to tell him personally, and instead published a statement.
Throughout the letter, he is critical of Crown Castle's management, and in one instance appears infuriated that he was told he was "too in the weeds" when presenting the plan in his board interview.
"It was a poignant remark from a Board that only met four times a year in both 2021 and 2022, the latter of which was a period when the stock lost 35% of its value. American Tower directors met 18 times in that same period," he writes.
"Yes, we're in the weeds. It's what shareholders expect and demand of their Board. Board members should be also."
Miller notes that he has "real skin in the game," in the form of $100 million of capital from himself and select investors to aid his proposed transformation.
"This is a sum greater than the entire 12-person Board's company-granted holdings in Crown Castle, and it is a far greater amount than their personal purchases," he notes.
Selling the fibre business
The plan presented by Miller includes selling Crown Castle’s ill-fated fibre business, a venture that has dragged down the towerco's valuation and share price compared to US towerco rivals American Tower and SBA Communications.
Miller claims he and his three fellow nominees, Chuck Green, Tripp Rice and David Wheeler have spent $5 million of their own money “dissecting every dimension of the fibre transaction,” which has been under review by Crown Castle themselves.
Miller's team have led a due diligence process with 25 prospective buyers and financing sources to increase the speed and certainty of a transaction.
“We have analysed the status and financing capacity of each potential buyer, the optimal buyer structure, carveout economics, and go-forward financials for Crown Castle,” Miller wrote, but noted that not one Board member ever asked to see the results of their work despite discussions taking place.
Miller proposes that Crown Castle maintain a minority stake in its fibre and small cell business, but has concluded that the assets “belong in the hands of operators who are most comfortable in that business”. He also said that Crown Castle could go all the way to 2050 without earning back its own cost of capital, and claims that Crown Castle could be worth tens of billions more dollars if it had never gone down the fibre path and not sold its international towers.
Miller wants to make sure a fibre sale happens this year, to capture $1 billion of tax benefits that he says will expire by the end of 2024 if a deal doesn’t take place.
Concerns that a fibre sale could be delayed by Elliot Management were raised by Miller and his team.
The Crown Castle Board has enacted a settlement and cooperation agreement with Elliott that Miller claims presents real concerns.
“The cooperation agreement enshrines Elliott as the de facto controller of the Company, with direct influence at the board level and across the committees that control Crown Castle's strategic future,” the letter says.
Miller's letter criticises the transparency of the agreement, and questions whether Elliott Management is sufficiently interested to act with the best interests of all stockholders, stakeholders and employees in mind.
Miller says that there are concerns that Elliott would be willing to finance a fibre carveout pointing to the research they conducted.
He has suggested placing the cooperation agreement to a shareholder vote, stating that this would make clear that the Board will reflect the will of all stockholders, not just Elliott.
“Doing so is also the best way to forestall litigation, costly distraction, and potential delay of a fibre sale, all of which would prevent the Company from realizing significant value for its stockholders,” the letter says.
In its statement rejecting the nominations Miller made to the board, Crown Castle claims to made significant strides forward toward creating a stronger and more valuable Crown Castle, including initiating a comprehensive strategic and operating review of the fibre business.
In addition, it has formed a fibre review committee and announced the appointment of Paul, Weiss, Morgan Stanley, BofA Securities and leading industry consultants to advise on the fibre review process.
Operational Efficiency
Another key part of Millers' proposal is to run the company much more efficiently.
“In 2013, Crown Castle owned 40,000 towers and employed 1,400. Today it still owns 40,000 towers and employs 2,200 people across that business line, even after a 750-person reduction,” the letter says.
Miller laments that despite the significant advancements in tower management technology, the company has become less efficient, with 18 employees per tower, more than both SBA Communications and American Tower.
“We target taking that number to 23 for each employee by 2026 which is in line with AMT's US tower operations. We believe additional gains can be achieved because Crown Castle operated in 2013 with 29 towers per employee.”
Since leaving Crown Castle, Miller founded Visual Intelligence, a drone inspection company and sits on the board of PowerX, an AI analytics company focused on improving tower efficiency.
“I founded this company and this industry and I have devoted the last two decades of my life to advancing the technology that serves this industry,” he says. “With interest rates having changed so drastically, this financial-engineering chapter of Crown Castle's life is over. It is time to get back to operational basics.”
Improving Crown Castle’s reputation.
Miller all but says the company is in turmoil.
“The CEO has resigned, the current CFO has resigned and un-resigned, there is a revolving door of fibre leadership, the EVP/COO of Towers has left, a major employee location has been shuttered and reopened,” he notes.
Furthermore, Miller claims that comments from employees point towards a broken company culture. “I have been horrified by the stories employees have conveyed to me over the last six months,” he says.
Miller also wants to improve Crown Castle’s relationship with its clients, US carriers.
“Once we spend the next two years fixing Crown Castle, we have a longer-term detailed approach to help customers access new communications infrastructure that captures immense opportunities in edge computing, Internet of Things, satellite connectivity, private networks, public services and autonomous transportation”.
Crown Castle's reaction to the plan
In addition to its comments about the fibre review process, Crown Castle noted in its statement that it has appointed three new independent directors, resulting in a total of seven of the twelve directors having been appointed to the Board since 2020.
It has appointed Tony Melone as interim CEO following the retirement of former CEO Jay Brown, and the formation of a CEO search committee, which has hired a leading executive search firm to help identify the next CEO of Crown Castle.
Crown Castle also said members of the board and management team have engaged in multiple discussions with Miller since late last year, including providing him and his director candidates the opportunity to make a presentation to the board.
"While we recognise Mr Miller’s contributions to the formation of Crown Castle more than twenty years ago, (the) nominees do not possess the relevant expertise and experience to successfully oversee Crown Castle’s strategy," it rebutted.
Crown Castle said it would present its formal recommendation regarding the election of directors to the Company’s Board in the definitive proxy statement, which will be filed with the SEC.
This will also be sent to all shareholders eligible to vote at the 2024 Annual Meeting of Stockholders, which has been scheduled for May 22, 2024.
