Best of the Week: Daring greatly, failing valiantly at breakfast; Worner’s exit; WPP; Gary Vee and me

[View web version]( BEST OF THE WEEK And another thing... August 17, 2019 Welcome to Best of the Week, bashed out at the end of a big, big news week. Today’s writing soundtrack: Fleetwood Mac - Rumours. They’re in town, you know. This week: Why it was time for Worner to leave Seven; WPP’s legal issues, why 2Day FM gave up breakfast; and the day I met Gary Vee. Daring greatly? And before we get to the main event of Tim Worner’s departure, yesterday morning was already a big one for media goodbyes.. At the office desk in Chippendale I was trying to simultaneously watch Virginia Trioli say farewell to ABC News Breakfast viewers ahead of a move to ABC Radio Melbourne’s morning slot, while listening to the dying moments of 2Day FM’s (apparently) final attempt at a Sydney breakfast show. There was quite a contrast. Trioli’s goodbye was warm, involving both her audience and colleagues. It was a dignified exit, and a rare one. Most people bowing out of big jobs usually do it because of failure. Whereas I’ve reached the end of a packet of Dorito’s with a bigger signoff than 2Day FM gave to the breakfast team of Grant Denyer, Ash London and Ed Kavalee. As our editor Vivienne Kelly said of the head of Hit Network [Gemma Fordham’s quote in the press release](: “Fordham also paid tribute to hosts 11, 12 and 13.” It made me think of British journalist Andrew Marr’s autobiography, My Trade, when he describes his short time as a newspaper editor: “Ahead of me, coming the other way, I saw a brisk, rather overweight, familiar figure. It was Kelvin MacKenzie, former editor of the Sun, impresario of topless darts on Live TV and also a director of Mirror Group Newspapers - one of the owners of The Independent, whose new editor I had just become. “He had a wolfish grin. ‘Allo,' said Kelvin. ‘Congratulations, young Marr . . . or Number Four, as I shall now call you.’ “I blinked and smiled. Why number four, I asked. ‘Because,’ said Kelvin, ‘you're the fourth of 'em. I'm not going to call you by your name because we don't want to get all human and intimate. Then I might be upset when they sack you . . . as they undoubtedly will. Ta-ra.’ And as they undoubtedly did.” And as they undoubtedly did to the 11th, 12 and 13th people attempting to recover the audience lost by the defection of Kyle Sandilands and Jackie Henderson to Kiis FM back in 2014. Not that Ash London necessarily got things in proportion. She saw parallels between two-term US President Theodore Roosevelt - who survived an assasination attempt and helped found the modern welfare state - and her own 11 months of helping take a Sydney breakfast show from a 3.3% to 3.1% audience share. Sadly, Instagram’s algorithm change means we’ll never know just how many likes she got from posting a screenshot of Roosevelt’s most famous words: "It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly.” Whether Roosevelt had breakfast radio in mind when he gave the speech in 1910 is a matter sadly lost to history. But what is on the record are the various attempts by 2DayFM and owner Southern Cross Austereo to replace the Kyle & Jackie O Show. And sometimes (perhaps often) in media, despite the valiant striving that Ash London refers to, it’s possible to do everything right and fail nonetheless. The media business is harder than it looks, and the zero sum ratings share game means that not everybody gets to succeed. That thought often occurs when I write about the latest tribulations afflicting Ten, for instance. It’s possible to play the hand you’ve been dealt as well as possible, and still not see much success. It was the same back in the day when Greg Hywood ran Fairfax Media. For all the criticisms of round after round of cost cutting, there was never a point where a reasonable person could have pointed to an obvious better strategy. And so it’s been with 2Day FM. For the incumbent number one station, it was only rational to go so far in increasing remuneration to keep Kyle & Jackie O, even if it eventually meant losing them. And for Australian Radio Network owner HT&E there was much less to lose in offering a huge bonus to the pair to come over. It was a rational risk to take, and it happened to work. Just as it was a rational risk for HT&E to invest in esports. As we learned this week, that risk ended in failure with [the coming closure of Gfinity](. In that case, it was a rational risk to take and it happened not to work. I’m not so convinced, however, that 2Day FM is genuinely planning to never have a breakfast show again, as they seem to be claiming this week. If you only read one piece about 2Day FM today, then I’d suggest our editor [Vivienne’s take is the one worth spending time with](. I share here just one delicious paragraph, which I’ve even seen screenshotted and shared on Twitter: “If the people of Sydney just want bangers to jam out to as they get lost trying to find the Westconnex, spend over $25 on tolls, get stuck next to a school student with a bag big enough to knock them out on the T3 line, or decide to risk it for the biscuit and go in that damn bus lane because the traffic simply isn’t moving, and why shouldn’t they be the one who gets slightly ahead of the queue – then don’t they have Spotify for that? If we want to pretend 1996 was 10 years ago, not 23 as current timelines would tell us, then there are plenty of So Fresh playlists and discovery options on the streaming platforms.” Yes a music-only format does not necessarily look like the best long term use of an FM licence. However, it does make sense to step away for a while and make a proper new plan for 2020. Years ago, I remember being at a radio conference in another part of the world. The one thing I still remember from the preso was this: “A good breakfast show could only happen on that day, in that city.” Listen to Christian O’Connell on Gold in Melbourne. Not a link goes by where he doesn’t namecheck a suburb. And he’s only been in the country for a year. I’d suggest that one essential for 2day FM next time round will be insisting that, the show comes from Sydney every day. In the previous lineups it gradually dawned on listeners that the presenters had so little commitment to the city, that most of the time they weren’t even there. But the bigger challenge for SCA is to figure out whether there’s still a 2Day FM sized gap in the market. There might be better ways of using the licence with another format altogether, even if would leave a hole in the national Hit network. It’s happened before. Lachlan Murdoch’s first run at rebooting Vega was a disaster. I bet I’m the only person with a Classic Rock mug left in my cupboard. The logo is terrible. But the more strategically considered Smooth FM was a game-changing triumph. Go your own way In the end though, neither La Trioli’s Friday farewell, nor the 9am exit of 11, 12 and 13 proved to be the biggest goodbye of the week. That came a few minutes later, when the ASX was told that Seven West Media CEO Tim Worner was leaving. And for me there were parallels with the big day back in 2011 that [News Corp announced that John Hartigan was leaving](. For one thing, both were end-of-an-era moments with the departure of an industry legend. And for another, it was a less than smooth process in getting the story out. I vividly remember the moment in 2011 when I opened the press release about Harto’s exit, only for the lights to go out and my screen to go blank as a power cut took out electricity in most of Chippendale. Which was then followed by frantic minutes of tracking down the only office laptop (we were smaller then) and firing up a hotspot. Worner’s exit was similarly frustrating. I moved across to a new phone a few days ago and I hadn’t noticed that updates on the 20 or so ASX listings that I keep an eye on were no longer popping up as alerts. So it was actually a tweet from DDB’s comms manager Lindsay Bennett that alerted us, an irritating 12 minutes after the announcement had gone up on the ASX. Which meant that we got beaten by the opposition in getting our breaking news email out of the door. But the bigger parallel comes that in both cases, these were bosses who had led their companies successfully, but stayed too long. Harto moved on because News Corp had been slow to respond to the digital disruption all around it. And in Tim Worner’s case, it was time for him to go too. Seven has been hitting negative milestones over the last few days. As I wrote in BOTW last week, the company’s share price hit a record low. What I didn’t notice at the time was that the company’s market capitalisation had also fallen below its $589m net debt. And the share price fell even lower on Thursday. Meanwhile, at some point this week, Nine overtook Seven for overall average channel share for the calendar year to date, in the total people demographic. That’s significant because recent years have seen Nine winning in all the key advertising demographics, but Seven winning total people thanks to its dominance in the older demos. Like the multiple jurisdictions of boxing, there are often a lot of champions, and Seven and Nine have up until now both been able to claim victories. But as of Friday morning, Nine led Seven by 29.5% to 29.4% for the calendar year in total people. And it had closed the gap for the official ratings year - which excludes summer’s Christmas weeks - to just 0.1 percentage points, with Nine on 29.6% and Seven on 29.7%. If the Ashes cricket doesn’t get too badly hit by the weather this evening, tomorrow may see Nine ahead on this metric too. If that continues through to the end of the year, we will see for the first time since the modern OzTam system began, a single undisputed boxing champion of the world. Which is not to denigrate Worner’s professional achievements. He was one of Australia’s great programming executives. After he succeeded David Leckie as CEO, he continued to drive the network to several more years of commercial success. And despite the Amber Harrison scandal (he had an affair with a member of staff, who suffered far worse repercussions than he did) he retained the loyalty of his team. Seven staff were saddened, but not surprised, to see him go. For years, Worner was lucky personally and professionally. He was lucky that the Amber Harrison scandal broke before the #MeToo movement took off. The affair may have been consensual but the issue of treatment of women in the workplace means that even the famously flexible Seven board would have struggled to tolerate the fallout if it had broken a year later. And he was fortunate to be running Seven when Ten’s turmoil occurred. Even this year, as programming has failed to fire with the likes of My Kitchen Rules and Australia’s Got Talent, the advertising market hasn’t punished Seven as much as might have been expected. As best I can work out, both Seven and Nine clung to nearly a 40% ad revenue share each, leaving little more than 20% to Ten. I suspect that is already changing. Ten has found some programming momentum, and there’s always a lag before advertising shifts with it. And that lag will have been lengthened by the transition back to an in-house sales team away from MCN for Ten at the start of the year. But that’s beginning to take shape too. But while the biggest compliment for Worner is that he ran a formidable TV network, you couldn’t say that he built out a formidable media offering. When Worner stepped up as CEO of Seven West Media six years ago, Nine had only just staved off bankruptcy. Seven had the more obvious potential to become a genuinely diversified media company. Through its ownership of Pacific Magazines and Western Australian Newspapers, Seven was strong in publishing, and should have been well on its way to a decent digital strategy. But its joint venture Yahoo7 took forever to unwind, while Nine got out of nineMSN faster. At heart, Seven West Media remained a TV network with some other assets. Nine meanwhile, got into bed with Fairfax Media to launch streaming service Stan, which has proven to be its salvation. Not least because Stan was the reason Nine was able to justify to the market its subsequent takeover of Fairfax Media, which has created a company of scale. When Nine starts to move into its new offices in North Sydney next year, it won’t just be a TV company. There’ll also be the journalists of the Sydney Morning Herald and the Australian Financial Review. And the Surry Hills hipsters of Pedestrian will be dragged across the bridge too. And assuming [this week’s takeover bid for the rest of Macquarie Media]( goes through, at some point the radio operation of 2GB and Macquarie Sports Radio will presumably move in there too. (Imagine being in the lift when Alan Jones and his critic-in-chief Peter FitzSimons bump into each other). Then of course there’s Stan. And away from the building, Nine’s stake in Domain and ownership of The Age in Melbourne. That’s a muti-media company. Now the dust has settled, it also looks like Nine arguably outplayed Seven when it came to the TV sports rights deals. By snatching the tennis ahead of the cricket, it reset the cost base. If I were Nine’s CEO Hugh Marks, I’d be out of the door the moment the ribbon is cut on the new office, and maybe before. As someone said to me this week: “He just hasn’t fucked anything up yet. That can’t go on forever.” Don’t stop And what of Worner’s successor at Seven, James Warburton? That’s a turnaround story every bit as impressive as Nine’s. Eight years ago, Warburton made the ill-advised decision to walk out as sales boss at Seven to take the helm at Ten. The man disparagingly labelled “Mr Ambitious” by Leckie, couldn’t wait. It was a mess. Seven went legal, and he couldn’t start for months. Then when he did, ratings tanked and ad revenues went south. Within little more than a year he was fired by Ten’s board. If he’d stuck around at Seven, he’d have already been in the job for six or seven years. But then he found his way back. He ran V8 Supercars (which means he’ll be able to give Hugh Marks some great tips on the best places for coffee in North Sydney), and then came back to media at APN Outdoor. He wasn’t in the role for long, but as the industry went consolidation crazy, Warburton got the shareholders of APN a great deal, selling to JC Decaux at what may prove to be the top of the market. It also gave him some hands-on experience in mergers and acquisitions, which may prove to be invaluable - and something he wouldn’t have got doing business-as-usual at Seven. The same goes with Supercars, which gave him experience in working for a private equity owner. Indeed, I wonder if that M&A stuff is the real clue as to why Seven proprietor Kerry Stokes went back to Warburton. There was [an intriguing interview with Warburton in the SMH]( a couple of weeks back. In the interview he predicted a round of M&A activity picking off the “media orphans”. Journalist Jennifer Duke speculated that this could be the likes of Australian Radio Network owner HT&E (which certainly seems to be making tidying-up “buy me” noises with [its Gfinity exit]( this week), outdoor firm QMS or regional TV operator Prime (which is funnily enough where Harto ended up as chairman). The suggestion in the article was that this could be an activity led by Warburton in conjunction with private equity, possibly CVC. (Which is big of CVC getting back into Australian media, considering it lost a couple of billion when Nine went down the pan last time.) A couple of possibilities occur. One is that Warburton’s article nudged Seven’s board, or more likely Kerry Stokes himself, into action. If Warburton was their man, then they risked losing him if they didn’t move on Worner immediately. Another is that Seven will be a part of that M&A activity, perhaps as a seller, perhaps a buyer. The big hurdle as buyer being whether the market would tolerate any more debt. The big hurdle as seller being what price Kerry Stokes would be willing to take. Rumour has it than when News Corp founder Rupert Murdoch enquired a few months back, the number Stokes wanted was too high. And since then the share price has fallen further. And there’s another reason why the move seems to put Seven in play. While he may be the M&A guy, Warburton is less obviously the transformation guy. He knows the business, but isn’t as obviously the person to change it. Unlike Worner, Warburton came up through the sales ranks. And on the one hand, that’s what Seven needs right now - it’s facing a fight for revenue, particularly if Ten does get back its mojo. But on the other, it’s been a while since Seven found a breakout hit. And there were no great programming decisions in Warburton’s short time at the helm of Ten. Remember The Shire? There may well now be some top tier changes. Seven sales boss Kurt Burnette and programming chief Angus Ross will be pondering their own prospects, not least because there are other strong, arguably more digitally-focused executives in the Seven ranks. In the first hour of trading on the ASX yesterday, Seven West Media shares went up by 7% after the change was announced. It could have been a vote of confidence in Warburton. More likely, it was investors assuming Seven will be on the market. Second hand news The big change at Seven was helpful for others. It was a distraction from outdoor company Ooh Media’s profit warning to the market yesterday. Ooh Media said revenue had fallen off a cliff in the last quarter. It should have been no surprise - the Standard Media Index numbers have been saying that about the outdoor sector for months. But the Ooh Media share price still fell by as much as 40% on the warning. I wonder if there are any day traders out there who subscribe to SMI and use its data to short media stocks when a spending trend emerges. There’s money to be made there. And it also meant that WPP’s latest legal case involving an ousted agency exec quickly faded from the spotlight. This time round, [WPP is being sued by Carmel Williamson](, the former boss of Team Red, its in-house agency for Vodafone. It comes not long after it emerged that [the company is also being sued by former mediacom MD Rob Moore](. In both cases, I have no inside knowledge, only the information available in the court documents. I suspect that both cases say more about the industry culture and structure than they do about the individuals involved. In this week’s case, there are issues to be explored around in-house agencies and the internal politics they can create in the wider agency group, particularly when serving challenging clients. And in Moore’s case, there’s a need to explore the question of industry wellness - how an organisation balances its duties to an executive struggling with health issues with its legitimate needs to run a business. If the cases go to trial - and often, they are settled first - we’ll learn more. Me and Gary Vee It’s already been a long BOTW, but I said last Saturday that I’d talk about my interview with content marketing phenomenon Gary Vaynerchuk. [The Mumbrellacast]( with the Gary Vee chat is now up. Please do take a listen. Ahead of the interview, I called out on Twitter and LinkedIn for questions people wanted me to put to him. In the days since, I’ve been asked a surprisingly large number of times, “What’s he actually like?” To catch you up, Gary Vee is one of those people who you either haven’t heard of at all, or you have a very strong opinion about. He’s made himself internet famous as a motivational speaker and content marketing guru. He did it by using his father’s wine business in the US as the launchpad for a video blog about wine. And then he became the product. He’s built a machine that pumps out dozens of pieces of content per week, featuring his take on all things to do with entrepreneurship and content marketing. Work hard and post lots is his simplistic message. It’s done entertainingly - snippets of video from keynotes, members of the public grabbing him for advice in airports, snatched moments in hotel lobbies. The image is of an in-demand guru getting a rockstar reception everywhere he goes. To feed this content machine, he’s constantly followed by his own cameraman. And once he crossed my radar, algorithms meant that he was in my Facebook feed ALL THE TIME. In the end it was too much, and a bit repetitive - I unfollowed. Meanwhile though, Vayner Media has grown, to the point where in many parts of the world it’s become a competitor to agency groups. His regular trips to Australia are because of his lucrative speaking gigs, rather than clients on the ground. So far. Which brings me back to that question of what’s he like? Honestly, I don’t really know, but here’s how our encounter went down. A few weeks back, we were offered the chance to talk to him at the Sheraton where he was staying, ahead of giving a speech somewhere outside of Sydney. Learning the lessons of our colleagues at Mumbrella Asia, who ended up with some wobbly iPhone footage with hotel lobby music plinking in the background in their interview with him earlier this year, we rented a conference room. Those complimentary mints are the most expensive of my life. I was actually a late stand-in for the interview because of staff illness, so spent the previous night on a crash course reacquainting myself with the Gary Vee philosophy. My colleague Zoe and I got there half an hour early, and we set up two mics across the board room table. When the moment came, Vee arrived with an entourage of, I think, four. There was his camera guy (who I knew from the Gary Vee podcasts I’d just been listening to, to be D-Rock); his PR person; a photographer; and somebody else. Vaynerchuck himself had his head down tapping into his phone as they swept in. There was no more than a minute or two of explaining who our audience is and getting him settled into the seat before he interrupted, not rudely, but firmly: “I’m ready.” So we started. During the conversation, he came across as a little less bombastic than he does on stage. He had more self awareness than I expected. We addressed the “douche” factor of having a personal videographer. He volunteered that he very much likes being liked. And he admitted to being less confrontational in real life than his on-stage persona. He didn’t shy away from industry scepticism about his approach, and conceded that even Americans can find him too American. And I couldn’t goad him into taking on Mark Ritson. There was only one moment in the conversation where we noticed Vaynerchuck’s PR person look up from her note taking. It was when I asked for his take on the #MeToo movement. I wrapped up as soon as we hit our allotted 30 minutes. Vaynerchuk had been filming himself for the whole time with his own phone, so there was an awkward moment where he gave his own goodbye to this camera as I interrupted. Afterwards, he was slightly warmer than before - “Thanks, I enjoyed it,” or something along those lines. Then a quick photo together. So as not to be a hostage to fortune (you never know what might be said about somebody in the future), I tried to remember not to grin obsequiously. And like many busy, famous people, Gary Vee wasn’t in the market for making new friends. Within another minute or two he and the entourage were out of the door, off to create another frenetic moment. Don’t stop Meanwhile, my version of a frenetic Saturday is squeezing in both the afternoon showing of Quentin Tarantino’s new movie - in 35mm, I’m looking forward to it - and scooting out west to Olympic Park for Fleetwood Mac. It’s been a big few days. Not least because it’s been 13 days since I took a day off. TFIS. Thanks for sticking with this one. At nearly 4,500 words, I think this is the longest BOTW ever. But it’s been that kind of week. As always, I welcome hearing from you at tim@mumbrella.com.au. And my colleague Hannah Blackiston - hannah@mumbrella.com.au - is running the newsdesk across the weekend Have a great weekend. Toodlepip... Tim Burrowes Content Director - Mumbrella Mumbrella | 46-48 Balfour Street Chippendale NSW 2008 Australia This email was sent to {EMAIL}. If you would rather not receive Mumbrella's Best of the Week email you can [unsubscribe]( or [manage subscriptions](. [Facebook]( [LinkedIn]( [Twitter](