Reports of a revolt within Village Roadshow prove hard to dispel
A revolt within the family behind Village Roadshow has cast a spotlight on its Gold Coast theme parks and the son tipped to take over the empire, Liam Walsh reports
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EVEN as his rich family’s bloodletting simmered beneath the surface, the crown prince of Village Roadshow, Clark Kirby, was all smiles on the Gold Coast red carpet for the premiere of Aquaman.
It was December and Clark, a senior executive in the business, was walking the carpet (which was actually blue) given Village’s studio on the coast had been the site of filming the superhero movie.
The 39-year-old, dressed in a dark suit and white-collared shirt with the top buttons undone, took a selfie. He joked that Aquaman star Jason Momoa was photobombing him by appearing in the background. It marked a starry night of success after several years of bleakness for Melbourne-based Village.
Movie magic begins in our own back yard at Village Roadshow | The Courier-Mail
Village Roadshow executives agree to 25 per cent pay cut | The Courier-Mail
But one month later, clouds returned with eyebrow-raising reports of a family squabble. Clark’s Uncle John, a Village director, wants to oust Clark’s father Robert, as executive chairman. John is also pushing for a new chief executive officer to replace Graham Burke, a family friend with the company since the late 1950s.
The stoush is more than a rare airing of a wealthy clan’s corporate fight. Its ramifications could impact on the future of Clark, who rents a beachfront home on “Millionaires’ Row” on Hedges Ave on the Coast, and on Village’s Gold Coast assets – including Movie World and Sea World.
“It’s a brilliant company for Queensland because there’s no doubt the theme parks are by far and away the most important man-made tourist attractions on the Gold Coast,” says Queensland corporate veteran Terry Jackman, himself a Village director between 1993 and 1999.
“They’ve (also) done a great job of attracting – with help from governments and whatever – of attracting major productions to the Gold Coast.”
VILLAGE started 1700kms to the south in 1954, when Clark’s grandfather, Roc, acquired a drive-in cinema in Melbourne’s Croydon. The business gained a stockmarket-listing through Queensland-registered De Laurentiis Entertainment in 1988, and oversaw theme parks, a cinema chain, movie productions and a business-promotions division with a UK arm.
But, like customers on its purple-tracked, 1.4km HyperDC rollercoaster at Movie World, some Village investors lately feel they have been twisted up and down, and left queasy.
Village’s share price has fallen from $7.95 in June 2014 to $3.27 at close yesterday. No dividends have flowed since 2016. Investors were asked to stump up $51 million in July. Then the company eked out a $200,000 profit in 2018 and investors will be watching when six-month earnings are released next week.
Varying problems are blamed for recent malaise. The Commonwealth Games hushed the Gold Coast into a ghost town. The tragic death of four Dreamworld customers scared off people from theme parks. Lukewarm receptions for movies (anyone remember Ready Player One?) hurt. A Wet’N’Wild operation in Sydney, which CLSA analysts think cost $135 million to develop, was offloaded for $40 million.
The stumbles impact investors – most especially John, Robert and Burke, who collectively own 41 per cent of Village.
John, about midway last year, started quietly agitating for change, recruiting Sydney-based investment banker David Kingston to take up the cudgel.
Hundreds of pages of emails flowed between the parties. One was called “The Diagnosis” and listed so called flaws under Robert and Burke’s leadership. Complaints ranged on issues such as whether some overseas assets were mere distractions from main business. By January, the familial blood was spilling publicly in southern newspapers.
Kingston tells Insight he was appointed following a “severe share price fall” in June, with stock touching $1.73 in July, to “advise on restoring value to (John’s) family’s shareholding interests”.
“John’s objective is just shareholder value. He has no interest in becoming chairman or an executive,” he says.
Kingston says John wants reforms such as “more non-core asset sales which will enable Village to focus on its quality core businesses of Queensland theme parks and Australian cinemas”. Potential operations for axing include its stake in a Wet’N’Wild venture in Texas.
Kingston also says John wants a “further reduction in excessive corporate overheads”. The company’s corporate division cost $28 million last year.
IT’S A BATTLE from moneyed Melbourne. Corporate records indicate John, 71 and a Western Bulldogs AFL fan, lives in a leafy home with a pool in the swanky suburb of Toorak bought for $2.85 million in 1997. Only a few roads away in the same suburb is his now estranged brother Robert, 67, in a home also boasting a tennis court. Burke, 76, known for hugs and dubbing colleagues as “brother”, resides a further 3.5km away in a $6.6 million modern apartment in swanky South Yarra.
Someone who has worked with all three is the Gold Coast’s Jackman. “Very intelligent men,” he says of the trio.
Jackman hopes the problems can be fixed.
“The only way to resolve it is … to agree that they will start with, let’s say, a clean sheet of paper. You can’t resolve it if they’re both going to say, ‘Well I’m right. You can go and get (stuffed)’,” he says.
Village shows outlier characteristics as a stockmarket-listed entity. That includes the depth of declared related-party dealings: a Courier-Mail tally of annual reports since 1999 indicates Village has bought almost $4.7 million in wine from vineyards in which Robert or his family have a stake – the tipple is used in Gold Class Cinemas or at corporate functions. Village also acquired $447,000 in swimwear from a company associated with Burke – it holds the trademark for his daughter Lisa’s bikini brand – for resale at theme parks. A smaller tie is one of John’s associated companies being reimbursed $90,000 in accommodation and transport costs from Village in 2011 and 2012.
THE BROTHERS and Burke would not be interviewed. But the company has previously raised hopes of a turnaround with moves such as no longer flogging theme park passes through discount resellers like Groupon.
Stockmarket watchers are also upbeat about the rainless summer. Citigroup analysts last month said recent price increases at Village’s theme parks, occurring while Dreamworld was cutting prices, “could be a result of Village gaining share”.
But CLSA analysts last year were scathing, saying “the quality of (Village’s) asset base has never been in question, it is the management of these assets that is the issue”.
All this struggle comes amid the upward career trajectory of Clark Kirby, who helped clean Village’s cinemas from an early age.
“My dad used to pay me with lollies that had reached their expiry date because he couldn’t sell them,” he told The Courier-Mail last year.
Armed with information technology and applied finance degrees, he had a stint at investment bank UBS before returning to Village. He’s run theme parks since April 2017.
CCZ Equities Research analysts last year said they thought “the CEO succession will move directly from Graham Burke to Clark Kirby”. They also said changes to theme park pricing showed positive signs about “this new generation”. Clark was “outperforming” previous Village management and competitors, the analysts said.
It’s a well-paying role: Clark earned $1.26 million last year. His photographs posted on social media service Instagram show a mixed lifestyle – the young family posing on the beach, selfies of him at the gym, or racing cars, or enjoying fine dining, such as a magnum of Belle Epoch 1996 champagne, which sells for more than $600.
But any direct ascension to CEO is no longer a foregone conclusion.
Firstly, Kingston says agitating director John wants an “executive search firm to be appointed to search for a new CEO” to replace Burke.
Then there is navigating which boardroom player to side with: the rebelling uncle or the incumbent father and long-time family friend Burke?
Clark is close to his father, serving, for example, as a director for Robert’s Yabby Lake vineyard.
Clark declined to answer some questions, but sent The Courier-Mail a message saying recent coverage of the family dispute has been unpleasant. Still, he added, Village’s team has been focused and “after a fantastic peak holiday season, we must be doing something right”.
The irony of the rebellion is that history shows John has been on the other end of some issues he now complains about.
For example, Kingston says John wants a “new independent chairman to reflect current corporate governance recommendations”. But go back 10 years and who was the non-independent chairman of Village? John.
Also in 2000, John was chairman when three big institutional investors wrote to him about gripes including “potentially excessive” director pay. (He replied pay was “appropriate for market forces”.)
Despite recent problems, one influential person who is long-term happy with the company is Singapore-based Vijay Sethu, who owns about 6 per cent of the company after a 15-plus year investment.
“What I’ve always liked about this business is its very strong cashflow generating ability,” he tells Insight.
While not aligning himself with any one brother, he is disenchanted with recent criticism of operations. He even backs freezing the dividend after market concerns about debt. “They’ve had their fair share of successes and fair share of mistakes over the years,” he says. But, overall, the result is positive, he says.
Still, John’s revolt is attracting attention. Take Gold Coast-based Glenn Hargraves, one of Village’s top 20 shareholders, who is willing to speak to John.
“The interest for me is get the damn share price back on track and start paying some dividends,” Hargraves says.
He’s not convinced Dreamworld is to blame for all theme-park woes, but enjoyed an October Halloween event at Movie World, where the park hosts special events such as a maze devoted to Leatherface from horror flick The Texas Chainsaw Massacre.
“(The event) was pretty cool. It was pretty packed. That’s a good sign,” Hargraves says.
Still, he’s got problems with Village’s overall condition.
“It’s like,” he says, “why isn’t it working?”
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