Annette Sharp: New boss Mike Sneesby at Nine but board brawl continues

Mike Sneesby taking the top job at Nine has not calmed the heavyweight battle between chairman Peter Costello, his deputy Nick Falloon and ex-Fairfax directors, writes Annette Sharp.

Mike Sneesby’s appointment to the top job at media company Nine has not, as shareholders may have been praying, calmed the warring factions within the strife-torn board and executive.

Far from it, say insiders who have sat ringside watching wide-eyed as the heavyweight battle between Nine’s chairman Peter Costello, his deputy chairman Nick Falloon, and the increasingly powerless directors of Fairfax’s battered and now-defeated old board has raged for months.

New Nine CEO Mike Sneesby. Picture: Britta Campion

A sticky film of sweat and spit now soaks all and there is an unmistakeable stench of what corporate battleground vets say is the smell of fear.

Three years on from Nine’s takeover of Fairfax Media, the looted Fairfax corpse is also
reeking anew after being disturbed again last week.

After months of internal disagreement and conflict, the appointment of Stan boss Sneesby — as a replacement for loved-up outgoing chief executive Hugh Marks — was expected to settle the troops and the board.

Fairfax board director Patrick Allaway.

But despite Costello’s public assurances, and a bolstered share price, the Nine board isn’t for settling.

It’s for “renewal”, at least that’s what former Fairfax board director Patrick Allaway said on Monday after tendering his resignation to the stockmarket on the eve of the new CEO’s appointment.

In the backrooms at Nine, Allaway’s resignation has been interpreted not as a vote against Sneesby but rather as a comment on a brazen and bizarre attack on former Fairfax chairman Falloon, who last Sunday found himself in the sights of Nine’s “independent always” press corps over allegations he gave his son Troy, a talented golfer who plays off a low single-figure handicap, access to a corporate golf club membership paid for by Nine.

Given Falloon is known to frown upon unscrupulous behaviour and be a stickler for good corporate practice, the claim came as a shock.

Former federal Liberal Party treasurer and Nine chairman Costello knows how it feels to have criticism hurled at a son. His own son, Nine employee Sebastian, has been singled out for plenty in recent years.

Costello and Falloon have had their disagreements. They are understood to have disagreed over revelations — made here — that Marks spent part of last year picnicking with his EA Jane Routledge (the relationship is icy these days) and romancing his direct report, an executive Marks had marked for greatness, Alexi Baker.

Nine deputy chairman Nick Falloon is known to be a stickler for good corporate practice. Picture: Hollie Adams

Marks resigned on November 14, the day before this writer was set to reveal the relationship.

Sources claim Falloon was angered by reports suggesting Costello withheld information
from Nine’s board about Marks’ after-hours activities — information the board should have had the chance to address and remedy rather than read about it in this newspaper.

Sneesby’s appointment to the CEO post was backed to the hilt by Costello.

Sources have told this column the new CEO, who was chief executive at Cudo and director of strategy and business development at Ninemsn prior to setting up Stan in 2013, was considering resigning from Nine if he didn’t get the gig.

Nine chairman Peter Costello backed Sneesby as the new CEO. Picture: Dean Lewins/AAP

With a stock market float in the wind for Stan, Nine and Costello could ill-afford to lose Sneesby, who might know the ins and outs of broadcast streaming but has little experience running a large and diversified media company with 4000 staff on the books. In contrast, Stan has just 130.

Sources claim Falloon was backing another candidate for CEO after finally giving up on previously held hopes that Marks would stay on — something Marks also wanted, according to a number of sources.

Insiders have told this writer Marks hoped the company would rescind his resignation after the “Lexi storm blew over” so that he could remain in his highly-paid CEO role.

Senior Nine executives have been travelling up and down the east coast telling anyone who asks that Marks should stay put due to a lack of suitable candidates, despite the governance crisis splitting Nine’s board.

Hugh Marks resigned as Nine CEO in November. Picture: Sam Mooy/Getty

Though historically generous in his appraisals of Sneesby, Marks recently withdrew support for the younger man.

Just days before Wednesday’s CEO announcement, Marks provocatively described as “foolish” — in Nine’s own newspapers — the failure of Sneesby’s business division to anticipate a move by Tabcorp to scupper a broadcasting deal that would see Stan’s rugby games broadcast in pubs.

Costello told media Marks was in hospital having tests for an infection when the CEO announcement was made on Wednesday.

That medical appointment prevented Marks from contributing an effusive congratulatory comment concerning Sneesby to Nine’s public statement, as outgoing CEO David Gyngell had for Marks upon his appointment in 2015.

As for Sneesby hoping for clean air going forward, that looks unlikely.

Nine MD local markets and group marketing Lizzie Young had thrown her hat in the ring for the top job. Picture: Supplied

He will first have to prevent an exodus of top staff, among whom is said to be Nine chief digital and publishing officer Chris Janz and Nine MD local markets and group marketing Lizzie Young, who Marks once groomed for success. Both had thrown their hat in for the CEO job.

Then there’s Nine’s head of television Michael Healy who, this column hears, told Costello his boy Sneesby was not the right fit for the job. The men have been at war over television content for years.

Nine’s print division has wasted no time vigorously and robustly dictating how Sneesby, who is well-liked at Stan, will begin when he starts in the role next month.

Nine’s head of television Michael Healy is believed to have told Costello that Sneesby was not the right man for the CEO gig.

Tony Boyd of the AFR last week warned “if Sneesby goes weak at the knees because a prime minister, treasurer, chairman of a public company or billionaire wants to kill a contentious story or stop an investigation … then he will be on a slippery slope towards destroying Nine’s journalism franchise”.

He also instructed his new boss to be a “bulwark” and told him to waste no time restructuring the free-to-air TV business.

The electrical engineering student from Vincentia has certainly bitten off a lot.

In his own words, Sneesby last week described the task before him as “daunting”.

Whereas in recent years he had to navigate one main battleline — the gruelling fight for content for Stan — now he has fires burning on all fronts.

Meanwhile, the battle for content is ongoing.

Stan recently lost content deals with Disney, WarnerMedia and ViacomCBS, and will soon find itself at the negotiating table with MGM and NBC Universal.

This investment, worth hundreds of millions, has grown with the recent launch of sports channel, Stan Sport, which has the rights to rugby union and Wimbledon.

With Nine’s old businesses having to help foot the cost for Nine’s new digital streaming dream, there may never be a time when Sneesby doesn’t have to look over his shoulder.