Acrimony forgotten, Seven stokes old partnership as James Warburton returns
Eight years after picking up his fishing rod, family photos and walking out of Seven vowing never to return, James Warburton has made a surprise comeback.
Eight years ago, James Warburton picked up his giant fishing rod, family photos and a racing helmet with “Live, Love, Race” stencilled on its side and walked out of his Seven West Media office, saying it was “beyond doubt that I could not work at Seven in the future”.
It would take another 13 months for Warburton to work at all, battling and ultimately losing in court to Seven in his quest to join the rival Ten Network as chief executive, after Seven’s billionaire chairman Kerry Stokes had told him to “get out” of Seven.
Yet Warburton suddenly and shockingly is back at the broadcaster, replacing Tim Worner in the chief executive’s job on Friday morning.
When the end came for Worner on Thursday evening in Stokes’s Liverpool Street offices in Sydney’s CBD, it came quickly. Warburton’s appointment was announced less than 12 hours after Worner was firmly encouraged to resign by Stokes.
For Warburton — who was once labelled “Mr Ambitious” by another ex-Seven boss in David Leckie — it means an incredible comeback to a network he left in such acrimonious circumstances in March 2011.
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Stokes and Seven would apply the full force of the law to keep Warburton from Ten until January 2012, even though Stokes offered Warburton the CEO job just days before he walked out of Seven, seemingly forever.
A controversial court case that lay bare the ill feelings between the parties would follow, including revelations of Leckie telling Warburton to “get out now” and Stokes adding “you are a competitor now” and later accusing Warburton of “embellishing” his evidence.
Yet Warburton has returned to the Seven fold, with Stokes telling The Weekend Australian that the legal matters were “put behind us a while ago”.
“I was close, very close, to James when he was at Seven, and yes, we enforced our rights when he left,” Stokes said.
“But we put the past behind us some time back.”
The changing of the guard at Seven ends an increasingly tumultuous six-year stint as chief executive for Worner, who left the network where he had worked for 25 years just three hours after meeting Stokes on Thursday evening.
He had flown back to Sydney from a Thursday lunch with AFL boss Gillon McLachlan in Melbourne to go straight to the Seven chairman’s corporate office for a 6.30pm appointment.
While clearly closer to the end of his tenure than the beginning, Worner is said to have been surprised by his chairman’s move, given he was talking at the lunch about future plans with no thought that he wouldn’t be there to see them through
Worner is highly respected in the television industry and praised by Seven’s sporting and advertising partners, but he had been less visible in public since revelations of an extramarital affair with Amber Harrison, a personal assistant to another Seven executive, broke in December 2016.
Warburton would go on to have an ill-fated stint at Ten, lasting only 13 months, but would later begin to repair relations with Stokes and his family in 2013 by meeting his son Ryan, now the chief executive of Seven Group (which owns 39 per cent of Seven West Media), apologising and telling the media heir he regretted his actions.
The pair would keep the lines of communications open during Warburton’s stint as chief executive of the Supercars motor racing series and then APN Outdoor, discussing a potential return to Seven after APN was bought in a $1.1 billion deal by French firm JC Decaux in October last year.
Those talks accelerated in recent months as Warburton established a media consultancy business and caught up with the younger Stokes to discuss potential deals with private equity firm clients CVC Limited and Alceon Group. It all culminated in three days of immediate action to end this week.
As Stokes told The Weekend Australian, it was a hasty yet necessary sequence of events that moved swiftly from a Seven board meeting on Wednesday to a chief executive being told the next evening it was prudent for him to resign, and the new boss hitting the phones today to reassure Seven advertisers and partners a new era for the network beckons.
“I’m not going to sugar-coat it,” Stokes said. “Once you’ve made a decision on something, then things … they tend to happen very quickly in this industry, there’s no time for sitting around.”
That, however, is exactly what Worner will do during the next 12 months, at considerable expense to Seven, a time that began with him heading north from his Manly home for a weekend away with his family after thrashing out the terms of his severance within three hours of beginning his Thursday meeting with Stokes.
The billionaire Seven chairman did say the meeting was “quite emotional” and he was grateful for how hard Worner had worked during his time at Seven and was conscious of how many years in the top job can be a grind.
All parties deny that any further scandals involving Worner had been uncovered or that next week’s financial results announcement for Seven will be worse than previously foreshadowed. (Seven in a statement reaffirmed previous guidance of an underlying pre-tax profit of $210 million to $220m.)
As per the terms of his departure deal, Worner will be paid about $2.6m by Seven during the next 12 months for the media equivalent of silent gardening leave. He has left Seven immediately, cannot speak to the media, entertain other executive roles or approach Seven customers. A more official farewell will be arranged, Stokes said, at a time more appropriate for Worner.
It also means Worner is being paid twice as much to not do the job as Warburton, who is coming in on a $1.3m contract, will be on to replace him.
Worner’s contractual obligations have been in force since he was elevated to Seven’s top job in July 2013 when the then high-flying network was worth about $2bn on the ASX, ironically only a few months after Warburton had left Ten.
Today, Seven is a $600m diminished company. Worner has been forced to undertake several years of cost-cutting in a market with declining revenue and a free-to-air network with all the challenges of rapidly changing and fragmented viewer habits.
Partners spoke well of Worner today. McLachlan said the AFL was fortunate to have “had a partner who was one of the best in the TV business but also someone who had an intimate knowledge of the AFL industry”.
Racing NSW boss Peter V’landys said that “as far as corporate operators, he was as good as they come”.
The ebullient Warburton will be a contrast to his predecessor, taking over with a reputation as an expert salesman and driver of revenue — something Seven desperately needs more of.
Worner’s strength was in the production of hit shows, a part of the TV industry in which sources say he may pursue a role, with the imprimatur of Stokes, in future.
But the Seven reins are now in the hands of Warburton.
He will focus on trying to increase revenue and he returns to the network with far more experience than when he left, having worked for a private equity owner at Supercars and then pursued merger and acquisition deals at APN.
Yet as he returned to Seven today, working on the lengthy sixth floor of the network’s new headquarters in the Sydney inner-city suburb of Everleigh in an office near that of Stokes, there was proof much had changed since the last time he was there.
It was also a far cry from when Seven executives gathered at the boutique five-star Bells at Killcare resort to celebrate Worner’s ascension to the top job.
Instead, Warburton was, between media interviews, locked in meetings with Stokes and constantly on the phone to clients.
There has been little time for him to refurbish his office.
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