On the money
While there’s been plenty of speculation about the company’s revenue since Weldon took over, he says it’s a private company with a very private owner and he wouldn't discuss any financial information. As it’s an overseas owner, it does have to file a return to the companies office and the last one for MediaWorks Investments from early 2015 showed a $12 million profit, with radio being the strongest contributor).
“I know a lot about being a public company [from his time heading up the NZX], and there are lots of benefits in that … But the transition is a lot better to do as a private company. You can make the long term investments. You can spend the necessary capital required today without worrying about the pressures of being publicly listed. We’ve got really good commitment from our owners to for a capital investment programme, which this business has not had in the last decade.”
Weldon says private equity companies like Oaktree own businesses to make money and they’re “not natural long term owners of media businesses”.
“My view on it and the reason I took the job is that you create the most value by having a clear vision for growth and staying ahead of the market … Businesses that are in low-growth behind the market scenario are not worth a lot. It doesn’t mean you end up fat and you don’t need to address costs. But that should be an everyday discipline around running a lean organisation that doesn’t make a habit of waste.”
And, in what some may see as convenient timing from a competing media organisation, NZME ran a story after the announcement of MediaWorks’ Newshub brand last week that mentioned a company policy requiring staff to print on both sides of the paper (it also ran a story about MediaWorks buying Weldon's wine at cost for its Christmas booze ups, something that it had cleared with the board).
Over time, MediaWorks has come to be seen as something of a Kiwi battler; a company that has been through its fair share of rough patches and learned to operate on the smell of an oily rag in comparison to some of its competitors. So is that charming? Or just inefficient? Weldon thinks it’s a bit of both.
“While we’ve done a very good job of positioning ourselves over time as the underdog, we’re actually very big [at around 1,400 staff] … Silos equal duplication across the businesses, so having a radio finance team and TV finance team that were structured in exactly the same way is not efficient to run one overall business and not productive if you want to think about the economics of, say, The Bachelor, which plays across More FM, TV and digital. It’s not fit for purpose. Within any individual area the business has been run quite cheaply, but the design overall doesn’t fit with where we need it to be. So we need to shift it. That’s just a fact.”
When asked whether MediaWorks had closed its long-standing accounting department in Hamilton, it said no. But Weldon’s remit is to knock down the “rigid silos” and create a more efficient business, and it’s thought to be looking at it closely.
Creating efficiencies is often corporate shorthand for cutting staff, of course. And while he says “the day that anyone turns up to work and looks forward to a redundancy is the day they should get out of the job”, he says everyone is in agreement that the company needs to change.
He says it’s at the start of a three year journey to “quite a different end point” and a "company that looks fundamentally different”. So why three years? And will he be off to, as they say in press releases, pursue new opportunities?
“In this media landscape there’s no-one in the world who’s smart enough to draft a strategy for five years. And one is too short. So three sounds right.”
As an example, he points to Grand Designs, which was commissioned two years ago (and is currently performing well on Sunday nights).
Friends and enemies
As Weldon said when asked about the printing policy, small gestures can be very symbolic, both for staff and for those watching from outside. Big gestures can be symbolic too, and that's certainly the case with KPEX, the collaborative ad network established by NZME, TVNZ, Fairfax and MediaWorks. He says MediaWorks played the lead role in pulling together the partners on the initial idea.
“As Google and Facebook take share from the four broadcasters, the competition is of a nature that’s quite different than a decade ago where advertisers bought their print and their TV. At the moment, many are making a choice between print and TV and that’s quite different.”
So, another cartel like the TRB then?
“Google is a self-organised cartel. They clip the ticket six times on any given digital ad. So if you’re competing with Google, you’re not a cartel. But, organisationally, we’re very keen to partner.”
He believes being able to compete and collaborate at the same time is one of the skills that will differentiate the winners from the losers in the emerging media landscape—and a lot of landscapes where technology is a major disruptor.
“We have a really good relationship with Sky TV. We are producing Prime News for them, delivering a really strong ratings performance for them, which is helping their channel share. It’s a high quality product. Sky is very happy with the tone of the product from the brief they provided but we compete with Sky tooth and nail in the advertising market, so we can manage those things. With Fairfax, there are a couple of pitches out there with major deals where we’re pitching jointly because we have assets they don’t have and they have assets we don’t have.”
Fairfax Media’s chief executive Simon Tong, who, like Weldon, had no media experience and was brought in to try and shake up the established model, is also big on collaboration and says the local players are not who they should be worried about. Weldon also feels that’s the right way to go. And there will be plenty of bystanders watching on to see if he's right.