BOTW: Nine's worst week - can Sneesby survive?; News Corp centralises; Is SCA taking The Cat seriously?
Welcome to Best of the Week, kicked off on QF1563 on Friday afternoon and wrapped up on a cold Saturday morning in Tasmania after an intense week in Sydney. Three conferences in three days, two of them on stage. For an introvert who acts like an extrovert at work, that’s a lot… it’s nice to be home in front of the fire. Apologies today’s email is a little late. There’s a lot happening.
Pinch, punch, first of the month…
The post-event adrenaline runs freely after a successful conference, and Tuesday’s HumAIn left us flying. When we ran the event in 2023, it felt like a meeting of random curious people; this time it felt like a community coming together. Each piece of feedback made it all feel a little more worthwhile.
It was also an intense week for the media industry. Nine CEO Mike Sneesby seems unlikely to be able to keep his job. Antony Catalano’s plan to create a regional media powerhouse is being taken a bit more seriously by Southern Cross Austereo this time. And News Corp began to tell its staff about its biggest restructure in a decade.
So, lots to talk about.
Happy World Milk Day
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Nine’s worst week
We’ll start with Nine.
The saga of news and current affairs director Darren Wick’s million dollar exit has turned into a question of whether CEO Mike Sneesby can hang on.
The escalation came last weekend. After a few days of rival News Corp publishing allegations about Wick’s behaviour towards female staff, Nine’s own publications joined the hunt. The Sydney Morning Herald’s Kate McClymont - whose #MeToo stories tend to stand up when others fall over in defamation cases - weighed in with a piece headlined “Former Nine News boss Darren Wick accused by staff of drunken, lecherous behaviour”.
And on Monday came the piece which tilted the balance of probabilities towards Sneesby not surviving. The Australian reported that a number of Nine employees had been required to sign non disclosure agreements over their complaints about Wick’s behaviour. NDAs were notoriously a coverup tool in Harvey Weinstein’s predatory Hollywood reign, and a particularly bad look for a media company.
However, it was much less clear in Nine’s case whether these were genuinely NDAs being used to gag victims, or the more standard non disparagement clauses often signed when employee and employer parts ways.
But the communications from Nine couldn’t clear that up. The email to staff from Sneesby seemed to have been carefully, and specifically, written: “As CEO at Nine, I have never signed any NDAs for any employee relating to a complaint or behavioural issue. In particular, I did not sign any NDAs with Nine staff in relation to Darren Wick’s alleged behaviour.”
Lots of unanswered questions there including about signing anything in his previous role as CEO of Stan, or somebody else at Nine signing them.
The hits on Sneesby kept coming from inside the tent. The Australian Financial Review revealed another messy exit. The head of communications for Nine’s streaming service Stan, Adrian Foo - a personal friend of Sneesby’s - had been given a redundancy payout while under investigation over complaints of inappropriate behaviour.
The company tried to take the heat out by commissioning an external review. Long term observers will recognise that from the Nine communications playbook.
Nine’s last big crisis was in 2016 when 60 Minutes helped fund a botched attempt to snatch a child from the street in Lebanon as part of a custody battle and its team were arrested in Beirut and charged with kidnapping.
Nine’s review into that bungle was by no means fully independent, conducted by the company’s general counsel and two former staff. At least this time, it will be run from outside of the building, by workplace culture consultancy Intersection.
Calling such an inquiry wins time. Executives can claim they can’t possibly talk about things while the review is under way. That’s not true, but it does provide a fig leaf.
As the AFR suggests today, the review might open a bigger can of worms. But at least it kicks the can (of worms) down the road.
On Thursday the Nine board had an emergency meeting and, for now at least, united behind Sneesby. Nonetheless, all week it seemed Sneesby was close enough to the exit that each time the ASX app had a new announcement, it needed checking immediately.
It is still possible that Sneesby could survive. Seven West Media CEO Tim Worner hung on for nearly three more humiliating years after Kate McClymont revealed his extra marital affair, and associated coke and credit card allegations which a company inquiry later ruled were unsubstantiated.
But that was because of the stubbornness of SWM proprietor Kerry Stokes. Nine’s board of directors are ASX veterans who care about their own reputations for good governance.
Another weakness for Sneesby’s position is that, other than winning the Olympics - and it’s years too soon to know whether that was good business - his three-and-a-bit years in charge do not have a lot to show for it.
The $5bn market capitalisation he inherited from Hugh Marks has declined to $2.3bn, and with it the leeway to do transformative deals.
‘How’s Mike going?’
There’s a question I sometimes hear about executives over coffee which I’ve begun to treat as an early warning sign: “How do you think So-and-so is going?” That’s a loaded question when it comes from people who know the market.
Even before the Wick saga went public, I was beginning to get that question about Sneesby, and whether he was making a difference as a CEO. The leap from the highly successful launch of Stan to running a TV, radio and publishing business was always a big one, particularly in as competitive landscape as Australian media.
In April, I wondered whether new Seven West Media CEO Jeff Howard’s first missive to staff was a clever move attempt to wedge his rivals. In a memo which quickly made it to the media, Howard wrote: “As a family man first and foremost. I’ve never smoked. I don’t use drugs. Never have, never will. Call me boring but I don’t even drink coffee.”
If a shareholder at an AGM or other public forum were to ask other CEOs if they could say the same thing, how might they answer?
One thing Sneesby has going for him is timing. The end of financial year is a month away and Nine won’t be releasing its FY24 results until August 28. The Upfronts are three or four months away and the company AGM won’t be until November 7.
However, it’s bad timing for the company’s sales operations. This is a key time for locking down the last of its Olympic advertising. I’d be surprised if any new sponsorship deals got signed this week.
In terms of public duties, Sneesby will be able to keep his head down. I’d be surprised if he parties with the sponsors and media agency CEOs at the Paris Olympics.
Sneesby’s succession
Already, there’s speculation about successors. There’s a big field.
Internally, chief sales officer Michael Stephenson, chief strategy financial and strategy officer Matt Stanton and Nine Radio MD Tom Malone would all be candidates.
If the board wants to make a break with the culture, Stepho and Malone might suffer from being seen as part of the old guard. In November, Stephenson ended up in the newspapers in connection with his own private life.
Stanton may be seen as a cleaner pair of hands having only joined the company in September 2022.
A wildcard would be former CEO Hugh Marks being asked to emulate Disney boss Bob Iger and return to a company in trouble.
However, the exceptionally capable Marks’ own exit from Nine in 2021, precipitated by the Tele revealing his relationship with a colleague Lexi Baker, might not weigh well with a scandalised board. Nor will Marks’ need to acknowledge this week that some of the allegations about Wick took place on his watch.
Better placed are two capable women who know the business and both happen to be in the market.
After missing out on the Nine CEO role last time round, Lizzie Young left the business in 2022 and became CEO of social media startup WeAre8. She left WeAre8 in March.
And Amanda Laing, who left Nine in 2017 before becoming chief commercial officer at Foxtel, will also soon be in the market after Julian Ogrin moved ahead of her as Patrick Delany’s likely successor at Foxtel Group.
Laing announced her departure from Foxtel in April with a plan to work through until September. I don’t know Laing, but I can think of few executives who are spoken of as highly by those who have worked with her.
The problem for Nine’s board is that, just as when they needed to replace Marks, it is impossible to find an executive whose experience spans linear TV, streaming and publishing.
They may have to start looking.
The defederalisation of News Corp
Last time News Corp has a shakeup this big, CEO Kim Williams could almost have been accused of over-communicating it. There was a staff video message, detailed public announcements, even a live interview on the ABC’s 7.30 Report.
A year later, Williams was out, losing a power battle with editors and publishers who hated their loss of power.
Twelve years on, the company took a a different approach to communicating this restructure. Staff have been told details gradually, with many finding out on Wednesday, and there has not yet been a public announcement.
A key change is the move to three main divisions - State & Community Mastheads which includes the tabloid and regional papers; The Australian & Prestige Mastheads which includes Vogue, Wish and GQ along with The Oz; and the third vertical is Free News & Lifestyle Mastheads.
A lot of cost (which will include significant job losses) has been taken out (reportedly $65m). Standard Media Index numbers suggest the fall in news advertising is yet to find a floor; some is cyclical but much is structural and won’t be coming back.
The changes so far announced are not dissimilar to what Williams tried to do unsuccessfully, with more centralisation. News Corp has always been a companyh with strong local fiefdoms. In this restructure, the power is being centred on Holt Street.
In terms of how the market trades with News Corp, the restructure will see, for major brands and the big agencies, a single main point of contact with each of the divisions; far more of a national conversation. Agencies will likely be a fan of that concept/
For the smaller end of town, the small and medium sized advertisers there will be greater self service via automation.
Although headcount will fall, there will be new hires in the sales team too. MD of client partnerships Lou Barrett - the most senior sales exec in the organisation - will be hiring what will effectively be a chief of staff to give her more face-to-face time with clients. There will also be a new lead for the company’s NSW sales efforts.
There’s more to come from News Corp this week. Executive chairman Michael Miller will address the National Press Club on Wednesday lunchtime on the topic of the tech platforms. I suspect it will be consequential.
On the farm with the Cat
The future of Southern Cross Austereo began to look more complicated this week.
SCA’s board signalled that it is taking a proposal from Antony Catalano to fold in his Australian Community Media news publications a little more seriously second time around. They quickly rejected his previous proposal in November.
Two things have changed since then. The ARN Media takeover bid fell over after partner Anchorage get cold feet. And Catalano has sweetened the potential deal by throwing in its agricultural division which includes The Land, Farmfest and Ag Trader. The agricultural sector is more lucrative than you might think.
However, the proposal would represent an entirely different path to the audio-focused strategy SCA has been pursuing. Catalano’s vision is for a multimedia regional powerhouse.
Back in November, my instinct was that Catalano’s claims about ACM’s digital subscribers did not add up. There’s a big difference between having somebody on your email newsletter database and them being an actual, paying subscriber. Due diligence would uncover that.
It’s hard to shake the sense that SCA is going through the motions for activist shareholders who just want a deal of any flavour. For longer term shareholders, even if the deal deliver a better profit number in the short term through shared costs, it’s a long way from the vision of a digital streaming future they were promised.
Unmade Index levels off
After a week of declines, the Unmade Index flattened out on Friday, nudging upwards by just 0.18% to 493.9 points.
Most of the action was at the little end of town.
B2B publisher Aspermont lost 25%; research house Purepofile lost 9.5% despite the news that it had secured media veteran Michael Anderson as chair and out of home minnor Motio lost another 5.9%.
Meanwhile house-of-music offering Vinyl Group bounced by 20% and Sports Entertaibment Group improved by another 8.7% after its Perth Wildcats deal.
COTW: Origin rivalries
In each edition of BotW, our friends at Little Black Book Online highlight their Campaign of the Week
LBB’s APAC reporter Casey Martin writes:
This week's campaign of the week comes from Dentsu Creative Australia, to promote Youi’s sponsorship of State Of Origin.
Dentsu Creative Australia has put together a TVC that is playful, reminding audiences that the game is fun and joyful. The humour pokes fun at the rivalry between NSW and QLD equally, focusing on the enjoyment of the fans.
In case you missed it:
On Monday things were looking bad for Nine:
On Tuesday we looked at the ACCC’s latest investigation into the murky world of Australia’s data brokers:
On Wednesday, the Unmade Index hit the unfortunate landmark of halving in value since launch:
On Thursday, we talked to the team at media mix modelling platform Mutinex:
'If transformation was easy, everyone would do it': New Mutinex CEO Mat Baxter on why adland is stuck in old models
On Friday we floated a balloon: What if Comcast buys Seven West Media?
Time to leave you to your weekend. Apologies again that this was a little late today.
I’ll be travelling back to Sydney on Monday afternoon. I’ve not been very organised with my meetings for this trip. Do let me know if you’d like to catch up on Tuesday or Wednesday.
And Abe Udy and I will be I’ll be back on Monday with the Start the Week podcast.
Have a great weekend
Toodlepip…
Tim Burrowes
Publisher - Unmade
tim@unmade.media