BotW: The two-speed media economy; And yet another exit for Ben Shepherd
Welcome to Best of the Week, written on a beautiful Tasmanian morning after a lot of road miles. Unmade’s Compass Hobart was a terrific night, but it’s the opposite end of the island from Sisters Beach. Compass rolls into Brisbane and Sydney this coming week - will we see you there?
Today: As News Corp hits a record high, the market starts asking questions about why a Foxtel deal is taking so long; and change at the top for Schwartz Media, already.
Happy National Chaos Never Dies Day.
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Another media exit for Ben Shepherd
Back when Ben Shepherd was announced as the CEO of Schwartz Media just before Christmas last year, somebody texted to ask: “How long do you think he’ll last?”
The answer arrived yesterday afternoon: less than a year - which has become a predictable pattern. Schwartz Media announced that Shepherd has left “to pursue other opportunities”. He will be succeeded by editor-in-chief Erik Jensen.
That followed stints for Shepherd of around a year at a time as chief investment officer at Dentsu, at consultancy Bain, at Thinkerbell and at CHE Proximity. Nobody in Australia has held so many senior media jobs in such a short succession.
I had wondered whether it might be different this time round
I’ve been a fan of Shepherd’s writing and thinking for 15 years now. His blog Talking Digital won Industry Blog of the Year at Mumbrella’s first (and only) Readers Choice Awards back in December 2009. His LinkedIn newsletter Signal is a must-read commentary on the media landscape. He’s a wonderful writer.
Schwartz Media, owned by Morrie Schwartz, is the sort of place that values independent thinking, and also has a genuine mission of independent journalism so I’d hoped it would work out. Their flagship The Saturday Paper is flimsy; I don’t have this week’s in front of me, but I think it’s usually only about 24 pages, but every single piece is crafted and worth reading. One of the challenges Shepherd faced was keeping TSP commercially viable.
This brings up a new experiment: Can the famously gentle-natured Jensen take the peaceful newsroom culture he created at The Saturday Paper and apply it to the business of media?
News Corp hits record high, but what’s the go with Foxtel?
While there was something of an impatient tone from an analyst or two on yesterday morning’s quarterly News Corp investor call, that wasn’t reflected in the company’s share price, which hit an all-time high yesterday.
News Corp’s market capitalisation of US$17.2bn is the highest since the sale of most of the organisation’s entertainment assets to Disney in 2013. And sister company Fox Corp, owner of Fox News, hit its own all-time high earlier in the week, with a market cap of more than $19.8bn.
The reason for testiness during the update was the lack of new information about the sale process for Foxtel. Having been hinting for a year that the company was open to an exit deal from Foxtel (which News Corp majority owns, alongside Telstra), things moved up a gear in the last quarterly update - CEO Robert Thomson said there had been “third-party interest”.
Yesterday, there was little new information, only that it was still “active”. When one analyst grumpily pushed to ask why the long delay, Thomson’s answer was gnomic: “Active means active”.
There were no big surprises in the data. The number of Foxtel subs overall fell slightly, mainly because Kayo usually begins to dip in the first quarter. Kayo fell from 1.550m paying subs to 1.499m.
Meanwhile, Binge hit a new high of 1.552m, up from 1.529m.
The first quarter of the financial year is generally the most profitable for Foxtel, and that was the case this time, with an EBITDA (earnings before interest, taxation, depreciation and amortisation) profit of US$92m. However that was slightly back on the $93m of Q1FY23 and $111m of Q1FY22.
In those numbers, there’s no indication of the looming challenges Foxtel faces in the coming months—losing HBO content for Binge and a battle to retain NRL for Kayo.. That Foxtel deal can’t come soon enough.
And the quarterly numbers also offer a clue on how things are travelling for News Corp’s news operation in Australia. Year on year comparisons are clumsy because the company reports in US dollars. What they do suggest, though, is that the company is still growing its subscription revenue, even as the advertising market trends downwards.
Disclosure: Through my super fund, I own shares in most ASX-listed media companies including News Corp
Unmade Index lifts from bottom
The differing track Australia’s media market is on, compared to the rest of the world was in stark relief this week. While News Corp was hitting a high point thanks to its US operations, in Australia the Unmade Index, which tracks local media valuations, hit new lows on Monday, Tuesday and Wednesday.
It then improved a little on Thursday and yesterday.
The index - which tracks the value of Australia’s listed media and marketing stocks - gained 0.55% on Friday to land on 426.6 points.
Yesterday’s improvement was driven by Nine which regained 2.26% after losing ground earlier in the week. Real estate site Domain - majority owned by Nine - lost 3.25%.
Fellow TV players Seven West Media and Southern Cross Austereo also made gains, of 3.13% and 1.89% respectively.
CotW: Humbug and joy
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:
Clemenger BBDO and Myer have created a Christmas campaign that puts a spin on a classic grinch-y storyline and leaves the Scrooges among us with a smile.
The campaign follows ‘Humbug’ as he sets out to destroy his neighbours' Christmas cheer. But when a little girl gifts him a pair of boots to wear while stomping baubles, he finds friendship and they ‘Share The Joy.’
The combination of real life and animation creates a sense of magic, and proves that sharing the joy, especially after a trying year, can often be found in the simple things.
In case you missed it:
On Monday we began the week by offering our verdict on the Myer ad Casey mentions above:
On Tuesday the Unmade Index hit an all-time low:
On Wednesday the IAB’s retail media chair Lachlan Brahe argued for more transparency:
On Friday we talked to Joe Aston about his book which has created a political firestorm over Qantas
Time to leave you to your Saturday.
If you’re not tired of me yet, you’ll find me this morning over on the Fear & Greed Weekend Edition podcast, adjudicating as Adam Lang and Sean Aylmer go head to head on the week’s top stories.
Have a grat weekend.
Toodlepip…
Tim Burrowes
Publisher - Unmade
tim@unmade.media
