Gyngell's uphill power struggle

If Channel Nine were Still The One, its surf-loving boss David Gyngell would be much higher up our power list than he is. He's smart, savvy, calls all the shots, and has an unerring instinct for what works on television, just as his famous father Bruce once did.

But despite his undoubted talents, Nine is getting thumped by its arch rival, Seven, which for the last eight years has been run by the same team – led by David Leckie – that made Kerry Packer's TV stations number one for two decades.

This year, Seven has won the ratings 40 weeks out of 40, topped the TV news charts for the sixth year in a row and scooped up almost 40 per cent of the available ad revenue. What's more, Leckie is bragging it will do it all again in 2012.

But that's not Gyngell's only worry. He also has to deal with a mountain of debt, which was dumped on his doorstep in 2006, when best mate James Packer sold Nine for $5.5 billion to the private equity geniuses at CVC. Rumour is that the network may now be gobbled up by a couple of US hedge funds who bought some of that debt on the cheap. The other likely outcome, according to Seven's owner Kerry Stokes, is that the banks will move in.

Whatever happens the purse strings look set to tighten further, despite Nine Entertainment notching a $400 million profit last year before interest and tax.

The outlook is no brighter over at ACP Magazines, publishers of The Australian Women's Weekly and Woman's Day, which Gyngell also oversees, because they're making far less money and facing real challenges from digital media.

Yet Gyngell remains Mr Cool. Last month he told The Australian Financial Review. "You don't have to be a rocket scientist to work out Channel Nine will still be going to air in one year, two years, three years' time, no matter who are the owners. My role will be to ensure I protect those businesses to the best of my ability." 

And this morning, when The Power Index called him, he was even more upbeat, despite being in back-to-back talks with those very same bankers. "I am only ever interested in being demographically number one and being the most profitable," he told us. "You do that by having the most advertiser friendly line up and at Nine we have had the best advertiser line up over the last three to four years."

When Gyngell was brought back to run the network in 2007, two years after walking out on the Packers, morale was at rock bottom. Nine had chewed through five managing directors, five heads of news and five heads of news and current affairs in five years, and had cut staff and programs to the bone. But it was not just that the knife had been used; it was the manner in which it had been done.

People who had been loyal to the network for years, like newsreader Jim Waley, were told to pack their bags and leave, and sue if they wanted a payout. Jessica Rowe was famously "boned" by Eddie McGuire, along with the creators of The Block, a huge ratings success. The boss of 60 Minutes, Mark Llewellyn (now running Seven's Sunday Night), had also been shafted, setting off an avalanche of bad publicity. 

And that summary tells only one tenth of the story, without even touching the year in which Sam Chisholm ruled the roost.

So, there was plenty of damage for Gyngell to repair. And he has done well. His first fix was to rehire The Block's creators, Julian Cress and David Barbour, who had been working with him at Granada in Los Angeles. Their revamped program topped the ratings this year, with its finale pulling in 3.4 million viewers. Two other episodes made it into Australia's 2011 Top 20.

His next trick was to make people feel safe again. Gyngell is one of those rare creatures, a TV boss you can trust. He's a decent, generous man who treats people well but also speaks his mind. And there aren't many of those in the industry.

Today, the bottom line is sport is doing well, and news is clawing its way back into contention: the Six O'Clock News knocked Seven off its perch in Sydney this year, while Today edged out Sunrise in both Sydney and Melbourne.

Drama is also a bright spot, although the latest incarnation of Underbelly put fewer bums on seats than before, and won little or no critical acclaim.

But Gyngell hasn't brought back the glory days. In the immortal words of Eddie McGuire, who ran Nine before him, "Winning isn't everything, it's the only thing". And the network is still coming second.

There is also little else to be proud of. Nine News lacks the authority it had in the 1980s and 1990s; 60 Minutes and A Current Affair are a shadow of their former selves; and the network no longer has a monopoly of sports coverage, as it did in Kerry's day. It is also losing its audience to digital channels (including its own), which show warmed-up repeats of American shows.

With his boyish looks and toothy grin, Gyngell usually looks like he's having too much fun to be a corporate leader. But it runs in the family. His grandfather ran a flying circus, his great-great grandfather did the fireworks for Queen Victoria and Prince Albert's wedding, and his father was a TV executive for most of his life. So it's hardly surprising he ended up in the entertainment business.

Gyngell is also dyslexic, like his mentor Kerry Packer, which makes reading a challenge but leaves him well suited to TV.

It's one reason why he struggled at Sydney's posh Cranbrook School, where he was suspended for abusing his art teacher, before dropping out at 16 to go surfing.

His first job was a janitor at the surf club, but he soon opened a surf shop on Bondi's beachfront, which he built into a chain of 14 Beach Culture stores. Like so many other people who've ended up running commercial TV, he's a salesman and a risk taker.

He's also a mad TV watcher, whose idea of fun – even when he shared Bondi apartments (and girlfriends) with James Packer during his 20s and 30s – is a night at home watching the box. Nowadays, he tunes into news and current affairs on Nine and Seven every night, and is constantly on the phone to producers, reporters and his head of news Mark Calvert, who told The Australian recently, "He is a great boss who has a rare feel and passion for the business. But yes, there are times when you do think about taking out an AVO." 

It was Gyngell who cranked up Nine's excellent coverage of the Boxing Day tsunami in 2004, making the phone calls to people on holiday to get them all moving, and dumping the schedule to give it airtime. And he did it again recently with the Brisbane floods. "I brought to the story enthusiasm, passion and money. These were important stories and it was important to cover them well," he told The Power Index this morning.

Yet he doesn't intervene to block things or skew Nine's political coverage. "I think I'm lucky enough to have the respect of the news room," he explained, "so my opinion means something, but only something. My opinions are never designed to interfere with the news cycle and you know that a great newsroom like ours wouldn't tolerate that."

Gyngell and Packer remained friends despite Dave's resignation from the Packer family business and a falling out with Kerry in 2005.

The Big Fella would call Gyngell, who was Nine's managing director from 2004, day and night to grill him about the business, and abuse him if he didn't know the answer. "Your father would have known", was a typical retort.

Meanwhile, James and a posse of Nine managers or advisers were also bombarding him. Eventually, he could take it no longer. He got his friend David Hurley to write his famous resignation letter to Packer Snr, citing "increasingly unhelpful and multi-layered management systems" and went surfing in Byron Bay.

"I loved Kerry," Gyngell told The Australian, "He was a father figure to me, particularly once my dad died. That was a massive call for me to walk away from that. But I didn't feel like I could do the job."

Kerry died six months later, and the two men never spoke again. But the friendship with James remained solid. Even when Gyngell was running Granada TV in Los Angeles, they still spoke every day on the phone.

So does Dave Gyngell have power? Probably not much. The banks are on his case; Seven's beating him hollow, and politicians hardly quake in fear at his approach.

But if Nine gets back to number one after Leckie retires next year – and Gyngell might well be able to make that happen – he'll certainly be climbing up our list.

This article first appeared on The Power Index on December 6. Republished with permission.