Man overboard as Murdoch clings to past

Kim Williams was a force for change, but he made foes, writes Elizabeth Knight.

Kim Williams was a force for change, but he made foes, writes Elizabeth Knight.

There is plenty of investment risk in Rupert Murdoch's decision to replace the new guard at News Corp with the old guard. It's meant to be the other way around.

The decision to withdraw support for Kim Williams is just embarrassing. He was a pivotal member of the senior management team within the new News Corp, which only a few weeks ago was split from Murdoch's entertainment mother ship, 21st Century Fox.

Williams came to the conclusion last week that his days were numbered. He was notably absent from two important advertiser functions, one held Thursday night by Myer and the other held last week by David Jones.

It is a $3.57 billion listed company that has been seeking to build its credentials as a large important player in new media with potential to grow.

Investors have been wary of the "new" News Corp given the pressure on print industry earnings, with advertising revenues in decline and digital earnings still in their infancy.

While 21st Century Fox shares have risen 15 per cent since the split, the new News stock has gained only half as much. This is despite new News' war chest of cash being earmarked for buying its own shares.

News Corp was relying on Foxtel to provide a stable and potentially growing sources of earnings.

Ironically, Williams was given the job to head the Australian operations 19 months ago as recognition that he had performed well turning Foxtel from a loss-making pay television venture to one that has boosted earnings despite the headwinds of limited access to exclusive sport programming.

He has been replaced by Julian Clarke, the former chief executive and chairman of Murdoch's Herald & Weekly Times. The old guard doesn't get any older when it comes to the print establishment.

In theory at least, Williams was a perfect manager to drag News Corp's print operations into the digital future. He certainly started the job as Murdoch's transformer of choice.

Williams had no ties to the old print business and could be ruthless about migrating the business to digital platforms and cutting costs.

However, rumblings from the hard-core print operatives started to emerge last year. Williams was unpopular and his decisions to ignore the old News Corp ways rubbed editors up the wrong way.

The decision to install management consultants (Fairfax Media, owner of this newspaper, has done so too) was treated with disdain by experienced managers who had a real feel for the product and the journalists who produced it.

Williams proved to be a cultural misfit, pushing change on the organisation faster than its staff was prepared to handle.

Noses were out of joint and Williams continued to ignore the cultural legacy of the organisation. In the end he failed at managing up or down.

Ultimately Williams was pitched in a battle with, what on an organisational chart, were his direct reports. The umpire was Murdoch and in the end he came down on the side of the editors, abandoning Williams.

The statement from Murdoch was nothing short of bizarre, given the circumstances.

"Kim has been a steady and courageous leader at a time when our businesses have faced unprecedented pressure and economic challenges. I want to thank him for his unwavering commitment and the blood sweat and tears he has put into News Corp Australia."

Williams had no choice but to go. He could have waited around to be escorted out the door but there's no dignity in that.

As Murdoch didn't have a replacement, Clarke was tapped on the shoulder to mind the fort.

So now this newly listed company has a stop-gap management in place for what is arguably its most important geographic territory.

At some stage new News Corp has to report its June 30 earnings, which should include a statement on the publisher's outlook.

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