‘Shareholders should be represented’: Bruce Gordon ignites push for Nine board seat

Billionaire media mogul Bruce Gordon has said he wants to be more involved in decisions made at Nine Entertainment Co as part of a push by the 92-year-old for representation on the company’s board of directors.

Mr Gordon, who owns 14.9 per cent of Nine through investment vehicle Birketu, has confirmed plans to gain a seat on the board days after striking a new long-term affiliate deal with Nine to broadcast programs like Married at First Sight and The Block in regional markets through his media company WIN Corp.

WIN owner and Nine shareholder Bruce Gordon has gone public with his desire for a board seat.Credit: Rob Homer

“We are believers that shareholders should be represented on public company boards, particularly shareholders who continue to invest so much in the business,” Mr Gordon told The Sydney Morning Herald and The Age in his first public comments on the matter. “Now that the affiliate deal is done, Birketu, Nine’s largest shareholder, will seek a seat on the board.

“I am a big supporter of [Nine chairman] Peter Costello and what he and his board have done with Nine over the past few years and believe that we have the media experience to add further value to the Nine board.”

Mr Gordon bought nearly 15 per cent of Nine from US hedge fund Apollo in October 2015, a deal that made him Nine’s biggest shareholder. Apollo had two directors on the board at the time but Mr Gordon never gained a seat when he picked up the stake.

Nine’s board currently comprises three directors with ties to the television company — Mr Costello, Samantha Lewis and Catherine West; and three with ties to Fairfax — Nick Falloon, Patrick Allaway and Los Angeles based executive Mickie Rosen. The board was formed following the $4 billion merger of the two companies in 2018.

A seat on the Nine board will become available in April once director Mr Allaway formally departs. Mr Allaway resigned from the board two weeks ago, pointing to commitments as chairman of the Bank of Queensland. This masthead also reported two weeks ago that deputy chairman Mr Falloon is being investigated over the alleged misuse of a corporate golf club membership. The investigation is still underway and there are concerns among some Nine executives and industry executives that may cost Mr Falloon his directorship.

Sources familiar with the board’s discussions have said tensions between the Nine and former Fairfax board directors have formed in the two years since the historic merger despite the strong performance of the company. Mr Costello denies the board is fractured.

Industry sources aware of Mr Gordon’s discussions with Nine have said he is likely to get the support of Mr Costello and newly appointed chief executive Mike Sneesby. A Nine spokesperson declined to comment.

Mr Gordon, who wants to have a say in Nine’s future strategy, was a supporter of outgoing chief executive Hugh Marks, who was forced to resign over revelations of a relationship with former executive Alexi Baker. Mr Gordon was frustrated with the resignation.

Regional media companies such as WIN Corp, Southern Cross Austereo and Prime Media Group are under financial pressure due to weak advertising market conditions. ASX-listed Southern Cross and Prime hit historic share price lows during the pandemic, a burden shared by metropolitan partners Nine and Seven West Media. The ongoing pressures for regional media have prompted merger talks with metro partners. Seven tried to buy Prime in late 2019 and there is widespread speculation that Mr Gordon may also want to sell WIN Corp to Nine.

Sources close to Mr Gordon have brushed off any intentions to merge with Nine, but his push for a board seat has coincided with a seven-year affiliate agreement and an agreement to sell down his stake in rival Prime to regional media owner Antony Catalano. Mr Gordon and Mr Catalano previously blocked the merger of Seven and Prime.

Under Mr Gordon’s affiliate deal, WIN will give Nine about 50 per cent of revenue made from regional advertising and airtime for promotion of assets such as radio stations 2GB and 3AW, streaming service Stan and its newspapers the Herald and The Age. Southern Cross, the incumbent partner of Nine, indicated to the ASX on Friday it had been blindsided by the deal. Shares fell 10.4 per cent on Friday to $1.98 following the announcement. Southern Cross has declined to comment further or accept requests for interviews on its strategy following the change in affiliate deal.

While the deal was largely unsurprising given Mr Gordon’s investment in Nine, some industry executives were shocked that the two companies struck a deal. During the last affiliate negotiations, which took place in 2015, talks between the two companies fell apart over money and terms of the deal.

WIN took Nine to the NSW Supreme Court where it argued that streaming website 9Now needed to be included in the affiliate agreement as the content it received was no longer exclusive. WIN lost the case and by April 2016 Nine had ended its affiliate deal with WIN.

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