Industry leaders and analysts have handed down their verdict on the Mike Sneesby era at Nine and thrown some names – including one Google-sized curveball – into the ring for who could succeed him.
To many industry observers, Nine CEO Mike Sneesby’s exit ‘seemed inevitable’ following a bruising year for the media chief.
Since the start of the year, the company’s market value has cratered by 40 per cent, its workplace culture has come under internal review, following allegations of predatory behaviour by a former Nine News boss, the company has cut 200 staff and was embroiled in a pay dispute with staff in its publishing division.
Since Sneesby took over in 2021, Nine’s share price has dropped by about 60 per cent and its market valuation has shrunk from around $5 billion to $2 billion.
Although Sneesby struck a resilient tone at a recent investor call, claiming that Nine had performed admirably in a challenged market (Nine posted an annual revenue decline of 3 per cent to $2.62 billion and earnings were down by 12 per cent), he has taken much of the heat over the way that Nine has handled its recent performance and cultural issues.
Running a leg of the Paris Olympic torch relay while members of his publishing division were planning strikes in July was widely perceived as an error of judgment, while in July staff passed a vote of no confidence in the Nine CEO.
“[Sneesby’s exit] seemed inevitable, and well signalled in the analysis marketplace,” said Steve Allen, the director of strategy and research at Pearman.
“There have been a number of missteps in the past couple of years, and some misgivings about culture, particularly in the TV division (and a report on that in the next month).
“The board has also experienced major changes, which would no doubt have had an impact on senior management.
“I think a replacement as CEO will wait a while, (and should) until the culture report concludes, and therefore what needs to be fixed is identified.”
What went wrong?
Analysts and industry insiders, some who would only speak to B&T under the condition of anonymity, agree that Sneesby isn’t solely to blame for Nine’s recent fortunes. An economic downturn caused by factors outside of Nine’s control has led to sharp double-digit declines in TV advertising spend, where Nine makes the bulk of its money.
And there have been some positive strides forward.
Nine’s focus on future-proofing its Total TV division has been an important and well-received transition.
Half Dome head of strategy Adrain Cosstick noted: “Nine has made major strides in digital transformation under Sneesby, especially with the continued growth of Stan as a profitable streaming service.”
Industry insiders agree that Nine has managed this as well as any under the Sneesby era. Its omnichannel approach to the Paris Olympic and Paralympic Games, where advertisers have been able to reach audiences across TV, BVOD, radio and its news brands, has also earned plaudits in the market.
But there is also a sense that Nine’s razor-sharp focus on its TV and video division, where it makes the bulk of its money, may have come at the expense of shoring up other parts of the group, leaving the business exposed to TV advertising market conditions.
One media executive questioned why more has not been done to improve Domain.
During Sneesby’s tenure, Domain’s share price has declined by more than a third while rival REA Group’s has grown by 45 per cent.
“If you had improved that performance, then the share price for the group and for Domain would be significantly higher, which takes a lot of pressure off,” the media executive said.
A ‘strategic vacuum’
A senior media buyer told B&T, under the condition of anonymity, that a stronger strategic vision when times were good could have placed Nine in a better position to ride out the current economic downturn.
“Sneesby was supposed to be a reset from Hugh (Marks), who had such a phenomenal run. Sadly, and it’s not necessarily all his own fault, he certainly has not turned out to be that CEO. If anything, Nine is in need of a larger reset today than when he took over,” the buyer said.
“Prior to the past 18 months, TV was having a renaissance of phenomenal proportions, posting record EBIT and still generating half a billion (in earnings). Mike inherited a business with strong leadership, momentum, Stan, Domain. They had bought Macquarie radio and integrated that well. All they were missing was out of home and they would have had the full set and be in a much stronger position today.
“This might sound harsh, but in the first two to three years (under Sneesby) they didn’t do anything (to grow the Nine portfolio). That only happens in a strategic vacuum. Their focus has been around improving the efficiency of its existing assets, not looking at what is the next high growth strategic build, which surely is the job of the CEO.”
What’s needed, who comes next?
From October, Nine’s chief finance and strategy officer Matt Stanton takes the helm as acting CEO while the company begins the hunt for Sneesby’s long-term successor.
Industry observers believe Nine’s board will have a number of boxes to tick in their search for a new CEO.
“Nine needs someone who understands print, digital, subscription and telecast,” said Allen. “That’s not an easy spec to fill.”
Industry insiders believe they will want a leader who has strong experience in the upper echelons of a major media business, with broad expertise and is able to nurture a positive workplace culture. It is also believed the board may prefer a woman.
There are three names that have been mentioned to B&T as potentially strong candidates.
Firstly, there is Nine’s former MD Amanda Laing, who most recently served as Foxtel’s chief commercial and content officer.
Another is new Commercial Radio & Audio Australia CEO Lizzie Young, who previously worked at Nine for 12 years including in several senior leadership roles. She has also served on the board of Domain and in senior radio roles.
The third name suggested is Google’s ANZ VP and MD Mel Silva, a widely respected industry leader who understands the video market better than most and has strong relationships with key players.
Other names being suggested include Andrew Lancaster, the CEO of WIN corporation and Birketu, the largest individual shareholder of Nine. Nine’s chief sales officer Michael Stephenson – who is held in high regard by media buyers – is another who may fancy a tilt, while acting CEO Stanton will now have a chance to see whether he is well suited for the role.
The ‘to-do’ list
Whoever succeeds will have a sizeable ‘to do’ list, argues industry observers.
“Revenue, how to hold it and how to increase it, has to be uppermost in the Board’s mind. These are tough marketplace times, not likely to change greatly any time soon,” said Pearman.
Cosstick said that ensuring Stan has a strong pipeline of content in the face of growing international competition will be top of mind.
“His replacement should deepen investment in a strong lineup of Stan Originals and premium sport partnerships to sustain the healthy audience engagement and cross-platform promotional opportunities,” he said. “International content partnerships should also be a high priority, especially with Netflix and Disney+ weighing up their content distribution strategies.”
A media buyer agrees that shoring up Stan will be one of the priorities, but not the most immediate.
“Domain has to be top of the list,” the buyer said. “Culture will also be up there, and sorting out Nine’s media cost base, which continues to remain an industry-wide problem.”
In announcing his exit yesterday, Sneesby admitted the past year had been the most challenging of his career, and that the business was taking steps to improve its culture. He said that he has left the business in good shape: “Nine is in a strong position to execute the next phase of its transformation and I remain very confident in the future of the business”.
Nine’s next CEO will have a sizeable in-tray to go through but also the keys to one of the largest and most dynamic media groups in the country, with a broad range of strong media brands and professionals. Whoever picks up Sneesby’s torch has a challenging, but potentially rewarding, journey ahead.
