Sources close to Seven deny rumours of a row between chief operations officer Nick Chan and Kerry Stokes. Photo: Alex EllinghausenTo misquote Oscar Wilde, to lose one senior executive might be regarded as a misfortune, but to lose another within six weeks looks like carelessness.
The revolving door at Kerry Stokes’ Seven West Media headquarters in Sydney’s Pyrmont had barely stopped whirring after the shock departure of chief operations officer Nick Chan in December, when it took another unexpected revolution on Monday.
Chief financial officer Dave Boorman made a News Year’s resolution and tendered his resignation. It was “reluctantly accepted” by Mr Stokes and Seven West Media’s charismatic chief executive Tim Worner.
“Careless” might be unfair, but the timing looked far from ideal for the company, which owns Australia’s top-rating television network, Pacific Magazines, West Australian newspapers and half of Yahoo!7.
In November, Seven warned of a 10 per cent slide in its first-half profit, because of the softer television advertising market. Its shares, which closed at $1.29 on Thursday, have almost halved from $2.25 a year ago and analysts have raised concerns privately about the company losing so much executive experience at such a challenging time.
But Seven is very confident in the strength of its bench. Fairfax Media can reveal that Seven is close to promoting a veteran internal executive to be take up a new role as director of television operations. It has also promoted deputy chief financial officer Warwick Lynch, who has been key in financing content creation deals, to acting chief financial officer, and its first chief digital officer, Clive Dickens, starts this month.
All three appointments speak to the crucial and growing role that television and video content plays in the company’s strategy as it confronts the digital revolution – and also to an apparent culture clash that industry sources believe contributed to the departures of Mr Chan and Mr Boorman.
Both men are highly regarded executives. The outspoken Mr Chan, whose 25-year career has been focused on publishing magazines for the likes of Eric Beecher and billionaires James Packer and Mr Stokes, was promoted to Seven chief operating officer from chief executive officer of Pac Mags in September 2013. Mr Worner paid Mr Chan a lengthy tribute in the announcement when he left. Mr Stokes was brief, saying simply: “Nick has done a great job”.
Mr Boorman was appointed in April 2013 by the media group’s then chief executive Don Voelte, who now runs Stokes’ Seven Group Holdings. He joined from Vodafone Hutchison Australia, where he also had the role of strategy director.
Mr Boorman’s achievements included successfully refinancing of all of Seven’s debt facilities and overseeing a permanent repayment of more than $100 million, resulting in $1.4 billion of revolving bank facilities with an initial repayment date of October 2017.
But observers have pointed out that neither he nor Mr Chan had a background in television, which has been Worner’s career, contributes 69 per cent of Seven’s revenue and 72 per cent of its underlying profits, and was the only division to grow revenue and profit in its 2014 financial year. Worner has described TV as the “beating heart” of the business. It is is also an industry that dances to its own rhythm.
Some sources have suggested that Mr Boorman, a procurement expert with a telco background, had grown frustrated with trying to make certain changes that it is rumoured included cuts to production and talent, which sources say are sacred at Seven. Mr Boorman could not be reached for comment and sources close to Seven deny suggestions of any row over the company’s cost-cutting programme.
Sources close to Seven deny rumours of a row between Mr Chan and Mr Stokes. Mr Chan would not comment and referred inquiries to Seven. Mr Boorman could not be contacted. Seven declined to comment and the full story of their departures remains unclear.
But investors can be sure that Seven will do more to create and distribute content this year, as it faces new competition for eyeballs from the likes of United States streaming giant Netflix.
Seven already does more production in-house than any other network and has expanded into its own production in the US and Britain, with joint ventures 7Beyond and 7Wonder.
The moves have upset some independent production companies but have been welcomed by the market as a savvy response to the proliferation of platforms for content distribution fostered by the internet. Seven has also teamed with Foxtel on streaming.
As they ring in the changes, Mr Worner and his new team have it all to play for in 2015.
The original release of this article first appeared on the website of Wuxi Plastic Surgery Hospital.