Last week I attended, along with around 1100 other people, a presentation given by Kerry Stokes as part of the Business News Success and Leadership breakfast series.
Kerry and Peter Gammel approached Business News to hold the breakfast with a key aim in mind – to attract solid support from Perth’s business community for his bid to obtain two board seats on the West Australian Newspapers’ board. Judging from the support and response that I heard from the room, I got only the view that his approach had worked.
He made some interesting points, which I quote here from memory:
- The West Australian Saturday edition is likely to be outsold by The Sunday Times very soon – something I never would have dreamed would ever happen when I was involved in buying significant press for clients in my advertising days pre-2000
- Distribution to regional centres is solidly falling due to deliveries arriving far too late
- The supply chain is just not getting a fair share of the revenue slice, with no increase in payment in many years
His personal contributions and business success have been very positive for Western Australia, and innovations, such as giving media training to apprentices working at Westrac so that they could effectively communicate with customers, are simple and clever.
So, what of the strategy – effectively attacking the board for not driving better performance with the underlying message that management isn’t innovative enough, customer focussed enough, nor is the content interesting enough.
Much of the criticism can be laid at the feet of editorial direction, which has taken a real issues driven approach. The Sunday Times has made leaps and bounds in improving its product (which frankly used to be terrible) and deserves the success of improved readership.
However, some of the issue is the changing demographics of the readership audience. The West used to be compulsory reading for me daily – but my readership habits have changed.
I now getting my morning fix of news from:
- A news site such as www.news.com.au or www.smh.com.au
- Snippets off my 3 mobile phone if I am out using Planet 3 business or m.businessday.com.au – but mainly sport related news
- The excellent Business News email service
- The Financial Review – which I do read cover to cover
- And for more in depth stuff, well good periodicals like the Company Director magazine
As you can see it is the business stuff that I prefer to read and need to be across. I lost my faith in The West when I heard a journalist ask the CEO of Coca-cola Amatil if they were looking at the then Peters and Brownes milk assets. The CEO responded, “we are not particularly looking at them, but if something were presented to us, and we felt it was a fit we would consider it”. Guess the headline, “Coca Cola Amatil eyes Peters and Brownes milk assets”…
Having had my shot there (bearing in mind that in dealing with the advertising folk at The West, I found them very helpful, very customer focussed and keen to ensure results – I didn’t have a negative experience with anyone there at all), perhaps it is worth looking at the other side of the argument.
Copied directly from the West Australian site:
- There is a significant risk that Mr Stokes and Seven Network may gain effective control of WAN without paying a control premium
- Seven Network is a direct competitor of WAN, creating potential for recurring and systemic conflicts of interest
- The criticism of the board and the company by Seven Network and Mr Stokes ignores WAN’s strong underlying performance and profitability
- The focus by Seven Network and Mr Stokes on recent results ignores the fact that WAN’s recent dividend payment was affected by abnormal events and that the final dividend for the 07/08 year is expected to be significantly higher than the interim dividend
- The company has a clear strategy in place to generate significant value for all WAN shareholders
The above points are explained in more detail here and worth a read, particularly given the similar approach taken by Kerry Stokes to secure his place into Seven would appear almost identical, and that there is absolutely no question that Seven and WA News compete for media dollars and increasingly will be competing more and more online.
Whatever the outcome, there will be plenty of pressure on the board and management to improve results.
The author does not have shares in either The West or WAN, nor Business News.