New chief for Seven West as KKR exits
The sale of the 12 per cent stake in Seven West Media took place just hours after Seven named broadcasting veteran Tim Worner to take over as chief executive from Don Voelte on July 1.
Mr Worner, who heads the group's market-leading television network, said cost-cutting would remain the priority at Australia's most successful media group, given the uncertain advertising outlook.
He said his challenge would be to maintain the cost-cutting program "while maintaining the quality of what we're doing".
Brokers Deutsche Bank and Goldman Sachs were placing KKR's Seven West shares to institutions at about $2.21 each, a discount to Tuesday's close of $2.28.
Seven is seeking to maintain its 40 per cent-plus share of the metro television ad market but Mr Worner indicated this did not mean the media group's content budget was sacrosanct.
"That budget is always subject to review ... I expect that's going to continue," he said in a conference call announcing his appointment.
Seven West executive chairman Kerry Stokes said Mr Voelte made it clear when appointed CEO nearly a year ago that his tenure was always going to be short, and the change was made at his recommendation.
"When Don joined us, he had a very specific brief to bring on the management ... over the last few months, he has indicated to the board he felt he has done as much as he can achieve," Mr Stokes said.
He praised the contribution made by Mr Voelte, former head of Woodside Petroleum, who was considered an unorthodox choice as a media executive.
"He has brought what I had hoped he would, which is a business discipline to a media outlet while still allowing us to be creative and achieve those things we set out to do," Mr Stokes said.
Mr Voelte will become deputy chairman after stepping down from his executive role.
Earlier this month, he announced further cost cuts and a new direction for the media group, moving it away from its reliance on advertising revenue towards a strategy to monetise its relationship with viewers and create new revenue streams from its content.
"He's the right man for the job," Mr Stokes said. "He is an outstanding executive and has played a key role in Seven's success.
"Tim's intimate knowledge of the creation of content provides him with the experience to ensure Seven West Media's continuing success as the company evolves, grows and meets the challenges of a changing consumer market."
Mr Worner's base salary will be $2.6 million. He could earn double that - up to $5.2 million in cash and shares each year - if he meets short- and long-term incentive targets.
Frequently Asked Questions about this Article…
US private equity firm KKR sold its remaining $260 million, 12% stake in Seven West Media, ending its six-year involvement in Australia’s media sector. For investors this means a major shareholder has exited and those shares were being placed to institutions, which can affect the shareholder mix and short-term trading liquidity.
Broadcasting veteran Tim Worner was named as Seven West Media’s new chief executive, taking over from Don Voelte on July 1. Worner currently heads the group’s market-leading television network.
Worner has said cost cutting will remain a priority given an uncertain advertising outlook, while trying to maintain the quality of the company’s output. He also wants to hold Seven’s 40% plus share of the metro television ad market, but has noted the content budget is subject to review. That suggests a continued focus on efficiency alongside preserving audience reach.
Brokers Deutsche Bank and Goldman Sachs were placing KKR’s Seven West shares to institutional investors at about $2.21 each, which was a small discount to the reported Tuesday close of $2.28.
Don Voelte, former head of Woodside Petroleum, announced further cost cuts and a shift in strategy away from sole reliance on advertising revenue toward monetising viewer relationships and creating new revenue streams from content. After stepping down as CEO he will become deputy chairman.
Tim Worner’s base salary will be $2.6 million. He could earn up to double that — as much as $5.2 million in cash and shares each year — if he meets short- and long-term incentive targets.
Seven aims to maintain its 40% plus share of the metro TV ad market, but Worner made clear that maintaining market share does not make the content budget sacrosanct. The content budget will remain under review as the company balances cost control with quality.
Investors should monitor updates on how the institutional placement affects ownership, any further announcements about cost-cutting or content budget reviews, results and advertising revenue trends, and progress on the company’s strategy to monetise viewers and create new revenue streams. These factors will influence Seven’s earnings outlook and investor sentiment.
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