Upheaval at News as Williams quits
The upheaval has come less than two weeks after Rupert Murdoch's longtime confidante Col Allan returned to the group's Sydney headquarters, sparking speculation of change at the top.
It also follows an unusual period of internal change, with the editors of key Australian mastheads - The Sunday Telegraph, the Herald Sun and Brisbane's The Courier-Mail - all changing over the past year.
Hinting at the mounting pressure he had been under, Mr Williams told staff in a private email that while working for Mr Murdoch "the leadership roles and the issues encountered have at times been frankly really confronting".
For his part, Mr Murdoch admitted parts of his media group face "unprecedented pressure and economic challenges", while stating that Mr Williams had taken care of the first stage of the overhaul of the local arm.
Mr Williams has been replaced by Julian Clarke, a former general manager with the Herald and Weekly Times, who quit the News Ltd board in 2007.
Reverting to a manager with limited new media experience signals the surprising speed of the Williams departure.
"I'm surprised by the timing, but not that it has happened," said Margaret Simons, the director of the Centre for Advancing Journalism. "Col Allan's appointment can only have been seen as a slap from Rupert Murdoch.
"Since his appointment he has battled with the editors of the mastheads. But he [Williams] was appointed to drive change following his success in driving subscriptions at Foxtel."
Mr Williams' lack of newspaper experience meant he was an unlikely choice to run News's local arm after he replaced long-time Murdoch lieutenant, the former journalist John Hartigan, who left in late 2011.
Most recently, Mr Williams had run Foxtel, which he transformed into a hugely profitable venture - raising subscription numbers, boosting the number of channels on offer and spending $2 billion to buy out Austar.
His appointment to run News was part of a push to drive down costs and to speed up the shift to online distribution, but he has faced intense opposition to the cost-cutting regime that advisers such as Boston Consulting Group have advocated he pursue.
"The New York chatter is that the Australian publications are not moving quickly enough and the Kim Williams departure means he hasn't met his own goals," said Steve Allen of Fusion Strategy.
"He likes to lead from the front, and we saw that when he was at Fox Studios and then Foxtel. But turning around an organisation of 700 to 8000 staff is a bit like turning around the Queen Mary - it takes time. Those senior staff who agitated against the changes pushed by Boston Consulting shouldn't be celebrating. Those who adapt fastest will survive, and survive best."
The weak revenues of the Australian newspapers have been masked by the inclusion of Foxtel profits in its operations.
"Apart from the Herald-Sun, it seems that most of the group's newspapers are losing money," one analyst said. "Advertising revenues are declining which are not being matched by gains in digital revenues."
The pressures on traditional media were highlighted this week with the sale for $US250 million ($273 million) of the Washington Post and the $US70 million sale of the Boston Globe.
"National icons such as The New York Times or The Financial Times will be able to survive by charging for access," the analyst said, but city-based or regional titles will suffer.
Frequently Asked Questions about this Article…
Kim Williams unexpectedly left News Corp Australia amid growing tensions over cost cuts and the push to lift the group's online presence. His departure came shortly after Col Allan returned to the Sydney headquarters and followed a year of editorial change at key mastheads.
The article says Williams faced mounting pressure to cut costs and speed a shift to online distribution, and he encountered intense opposition to those changes. He himself noted leadership had been 'confronting,' and commentators suggested he hadn’t met targets for transforming the newspapers quickly enough.
Julian Clarke, a former general manager with the Herald and Weekly Times who left the News Ltd board in 2007, replaced Williams. His appointment — given his limited new-media experience — was seen as surprising and indicative of the rapid nature of the change at the top.
According to the article, Foxtel profits have masked weak revenues in the Australian newspaper operations. Foxtel was described as hugely profitable after Williams helped grow subscriptions, expand channels and complete the Austar buyout.
The article highlights declining advertising revenues that are not being matched by gains in digital revenues, leading many of the group's newspapers — apart from the Herald-Sun — to lose money. This creates pressure to cut costs and find sustainable digital revenue models.
Col Allan’s return to the Sydney headquarters sparked speculation of top-level change and was viewed by some observers as a rebuke from Rupert Murdoch. Commentators noted Allan had battled with editors, which added to the internal tensions described in the piece.
Boston Consulting Group advised on a cost-cutting regime that Williams pushed to implement, but that program reportedly met intense resistance from senior staff, contributing to the internal conflict referenced in the article.
Investors should monitor progress on digital revenue growth versus declining print advertising, the contribution and profitability of Foxtel, updates on cost-cutting plans, and any further leadership or editorial changes — all issues the article identifies as central to the company's near-term challenges.
Call 1300 880 160
Start a chat
Schedule a call
