Packer Resigns from Ten, Poaches Rival Seven Exec for CEO
Tumultuous day in Australian media could see big changes at four companies.
SYDNEY -- James Packer has resigned suddenly from the board of directors of Ten Network Holdings, which appointed rival Seven Network's chief digital and sales officer James Warburton as their new CEO.
Packer’s departure from the board comes just four months after he became a shareholder and director.
Packer retains a 9% stake in Ten alongside interim CEO Lachlan Murdoch –- combined they have 17.8% of the company.
Separately, Packer holds 45% of Consolidated Media Holdings, which owns 25% of Foxtel and 50% of Fox Sports parent Premier Media Group. Seven Media’s executive chairman and major shareholder, Kerry Stokes, also has a 22% stake in Cons Media.
At the same time, regional pay-TV player Austar said it is the target of a possible buyout by rival Foxtel. It gets better -- all these events may be connected.
Ten Network Holdings’ statement simply “announced the resignation of James Packer as a director of the company, effective immediately." That was followed by a separate announcement of Warburton’s poaching from the Seven Media Group.
Media analyst Mark McDonnell of BBY told ABC Radio that a Foxtel-Austar merger could be part of the reason for Packer's resignation.
"Whether other directors on the board had concerns -- only they would know -- but quite clearly with today's news that Foxtel is bidding for, or is likely to bid for, Austar does rather imply that there is a shift or an intended shift in that direction," he speculated. "It's fair to say that the interests of free-to-air television, such as Channel Ten, are at times quite contrary to the interests of the pay-TV industry."
Others however are citing Murdoch’s role in luring Warburton to Ten, the third-ranked commercial broadcaster here, from Seven, the number one, possibly creating friction between the allies, or that Packer could be engineering a larger corporate play.
Announcing Warburton’s appointment, Ten chairman Brian Long said Warburton “is a high caliber media executive with an enviable track record in television and digital media sales. He has forged an exemplary reputation in the media sector in Australia and has strong relationships within the media and advertising community," he said.
“The company continues to be grateful to Lachlan Murdoch for his commitment in the role of acting CEO during this period and for bringing James Warburton to Ten,” he added.
Murdoch added, “I know James well and I also know he will lead this business with great success.”
Warburton’s appointment was viewed positively. AdNews.com said the emerging view on Warburton’s rise to the top at Ten is that he has the ad market worked out, will know the investment community through his exposure at Seven Media Group, but will have a steep curve ahead in dealing with Hollywood studios.
Warburton joins Ten on July 14, meaning Murdoch will remain as interim CEO until then.
He’ll be paid an annual salary of AUS$2.2 million ($2.22 million), with performance incentives equal to 50% of his salary.
Seven Media CEO David Leckie said this afternoon, “We wish James Warburton well in his new role at Ten.”
“We’re sorry to lose him. We are acknowledged as having the best management team in media – with great people in key roles at Seven, Pacific Magazines and Yahoo!7.”
Ten also announced that group chief financial officer John Kelly will be leaving the company on March 1. Paul Anderson, CFO of Ten television, is being promoted into the role.
Packer’s departure from the Ten board caps a tumultuous four months for the commercial broadcaster. In November 2010, Packer mounted a raid on Ten acquiring an 18% stake, sold half of that to Lachlan Murdoch, wrangled two board seats for himself and Murdoch, engineered the departure of longtime executive chairman Nick Falloon, saw mining magnate and fellow billionaire Gina Rinehart follow his lead and acquire a 10% stake in Ten and have independent director Brian Long installed as chairman.
Last week, Ten announced that CEO Grant Blackley had his contract terminated, following a drop in earnings and Murdoch was named interim CEO. Murdoch is overseeing a strategic review of the company.