Ten chief told focus on TV, not real estate
Ten Network chief executive Hamish McLennan is being pressured to resign as chairman of real estate classified company REA Group, after REA announced the departure of its top two executives within weeks.
Mr McLennan will be asked by the Australian Shareholders Association to step down as REA Group chairman at Ten's annual meeting on Wednesday.
The ASA argues that the turnaround job at free-to-air broadcaster Ten - which has battled poor ratings, executive turnover and a weak share price - requires Mr McLennan's full attention.
Neil Shoebridge, a spokesman for Ten, did not answer whether Ten would review Mr McLennan's external roles in light of REA's announcement.
A spokeswoman for REA Group said recruitment efforts for the chief executive's and chief financial officer's jobs - CFO Jenny Macdonald will depart in February - would ramp up next year.
The ASA's request comes after REA Group, a market darling, was punished on Tuesday on the news its long-serving CEO Greg Ellis had accepted a job overseas. His successor, departure date and new job were not disclosed.
The reaction was swift: REA shares closed down 6.88 per cent at $37.74 in a flat market.
REA shares have more than doubled through 2013, and with a market capitalisation of almost $5 billion, and skyrocketed since Mr Ellis took the job in 2008. He came from Microsoft.
ASA chairman Ian Curry said REA Group had done "exceptionally well" under Mr Ellis, and a leadership vacuum would be concerning.
"Normally the CFO tends to be the one who steps up. It's difficult to know beyond the CFO who would be the person inside the company to do it," he said.
REA is majority owned by News Corp Australia, and Mr McLennan joined the REA board early last year as a News appointment. REA's realestate.com.au brand is a competitor to domain.com.au, owned by BusinessDay's publisher, Fairfax Media.
Ten shareholders on Wednesday will be asked to approve a deal that could hand over security of all the media group's assets to three of its billionaire shareholders - James Packer, Lachlan Murdoch and Bruce Gordon - in return for the trio guaranteeing its new $200 million loan.
Mr McLennan recently said returning Channel 10 to its roots as a youth-focused TV station would be certain death, and the "train has left the station" on the broadcaster's new focus on 25 to 54-year-olds.
"We've spent hundreds of millions of dollars against that demographic, and going out buying things like the cricket are proof that we're committed to it," he said.
"So we won't have a business if we were to revert back to where we were; we would absolutely go out of business and that would not be good for this audience or this industry."
There is speculation that News Corp may buy Ten, with which it has strong links. But the ASA said it was told by Lachlan Murdoch, Ten chairman and News Corp director, that News Corp would not do so.