Worner to raise the stakes at Seven
The KKR stake is a legacy from the $4 billion buyout of the company's television and magazine assets back in the 2006 boom times. But the holding has dwindled in size due to various corporate restructurings and a partial sell down in 2011.
The precise timing of last night's move was dictated by the resignation of Seven West Media's chief executive Don Voelte. The deal was put on hold until Voelte's departure was announced.
Voelte is leaving his post a little earlier than expected.
He was for Kerry Stokes what Al "Chainsaw" Dunlap was for the late Kerry Packer. Voelte was the tough-guy cost-cutter put into Seven to inject financial discipline.
There is still plenty to do at Australia's best-performing network to recalibrate the business, so either Voelte got impatient or Stokes thought he had done enough to be able to hand on the rest of the execution of Seven's new strategy to long-time executive Tim Worner.
Seven West Media is on track to take out $100 million in costs. But there will need to be more over time as the broader industry continues to face the pressures of negative cyclical and structural forces. Seven is the best house but in a lousy street. (And Nine is working very hard at renovating its program and financial performance.)
Voelte was never going stay in an executive role at Seven, but putting him in the job as chief executive for just a year has to be considered unusual.
But billionaire media moguls don't always follow the usual protocols and conventions when it comes to running a business, and this includes how they deal with succession.
Seven West Media's ultimate controlling shareholder, Stokes, is no exception. Having said this, the appointment of Worner to the top job should be well received.
Other companies might have appointed Worner a year ago and brought in management consultants to work on the cost restructuring - but these hired guns only make recommendations that management then needs to execute.
It is easier for Voelte as an outsider to make the tough decisions - he has no Seven history and no baggage. And as an appointed chief executive (rather than an interim chief executive) he had a real mandate to make changes.
At the time of Voelte's appointment the investment community was puzzled by this left-field appointment. Worner was then head of Seven's broadcast television.
Over the past couple of years management changes at Seven West have been a bit haphazard. Some of this can be laid at Stokes' feet but some comes with a bit of bad luck.
Stokes can be blamed for allowing David Leckie to stay too long - despite his knowing his ability was compromised by his health. Leckie has been one of the best executives the television industry has seen and made Stokes a lot of money. Stokes knew Leckie's time was up but was reluctant to move him on.
In 2011 Stokes had been grooming another television executive, James Warburton, to replace Leckie. But Warburton was too impatient to wait and instead took an offer to run rival network, Ten.
Within a year Warburton had been sacked by Ten's chairman, Lachlan Murdoch, and Leckie had moved to a non-executive position on the board of Seven West's parent company Seven Group, where he has a title but no real job.
Worner was next in line, but Stokes decided to put Voelte in the top role to inject "business discipline" and take the lead role in recommending his successor.
Like game show Survivor, there was a list of chief executives on Seven's management island; one would ultimately win the title.
Voelte confirmed the company sought no applications from outside but he would not say how many internal candidates were considered.
Ten recently moved outside the industry to find a replacement for Warburton while Nine's senior management has been stable for several years under David Gyngell.
The stated view in Seven was it had the best team and there was no point casting the net wider. While Worner was the most obvious choice, Rohan Lund, who had been elevated to the role of chief operating officer, was also a contender. He is now one of two in the box seat to replace Worner as head of TV.
Kurt Burnette is the only other Seven executive who would be considered to have a chance to take this prime position.
Having outlined at least part of the Seven West Media succession plan Stokes may be called on to outline the future governance of its parent, Seven Group.
There have been signs his son Ryan is being groomed for elevation beyond chief operating officer to the chief executive role.
While this is not surprising the timing of this move is now coming into question. Media speculation that long-term Stokes lieutenant Peter Gammell could be ready to move on is gaining momentum. A recent, strategically placed profile of Ryan in a national magazine points to attempts by Seven Group to ease his progression into a bigger role in the company.
Frequently Asked Questions about this Article…
KKR put its 12% holding in Seven West Media up for auction, asking a price about 7 cents below the company's closing share price that session. The stake is a legacy from the $4 billion 2006 buyout and had been trimmed over time through restructurings and a partial sell-down in 2011. For investors, the sale is a visible sign of pressure on the media sector and can affect liquidity and sentiment around Seven West Media shares.
According to the article, the auction was held late on the Tuesday and was put on hold until Seven West Media announced chief executive Don Voelte’s resignation. The precise timing of the move was dictated by that departure, so the market saw the two events as linked.
Don Voelte was brought in as chief executive to inject financial discipline — described as a tough, outsider cost-cutter — and he had a real mandate to make changes. His leaving a little earlier than expected removes a short-term, hard-driving executive from the role; the company now hands execution of its strategy to internal management, which will shape investor confidence depending on how cost cuts and strategy progress under new leadership.
Tim Worner is a long-time Seven executive who had been head of the broadcaster’s television business. The article suggests his appointment to the top job should be well received — he’s an internal choice who knows the business and is expected to continue executing the company’s recalibration rather than bringing in external consultants.
Seven West Media is on track to remove about $100 million in costs. The article notes that while this is a meaningful start, the broader media industry faces ongoing negative cyclical and structural pressures, so more savings and adjustments are likely to be needed over time.
The article highlights uneven management stability across the sector: Ten has moved outside the industry to find new leadership and previously sacked its recent appointee, Nine’s senior team has been stable under David Gyngell, and Seven has had a somewhat haphazard run of changes. For investors, that means competitive dynamics and programming strategies are in flux and could influence ratings and revenues.
Internally, Rohan Lund — recently elevated to chief operating officer — was a contender and is mentioned as one of two in the box seat to replace Worner as head of TV. Kurt Burnette is another executive with a potential chance. At the parent Seven Group level, the article also flags that Ryan Stokes appears to be being groomed for a bigger role, while there is media speculation around long-term lieutenant Peter Gammell.
Key risks highlighted in the article include ongoing structural and cyclical headwinds for the media sector, the need for continued cost restructuring beyond the current $100 million program, management turnover and succession uncertainty, and shareholder moves such as KKR’s stake sale at a discount — all of which can affect profitability, strategy execution and investor sentiment.
Call 1300 880 160
Start a chat
Schedule a call
