Bruce Gordon’s WIN holds talks over Nine shake-up

Bruce Gordon’s WIN Corporation is sounding out media executives over potential changes at Nine Entertainment.

Billionaire Bruce Gordon

Bruce Gordon’s WIN Corporation is sounding out media executives over potential changes at Nine Entertainment Co as it steps up its campaign against the network’s senior management team.

Members of the Bermuda-based billionaire’s inner circle have asked executives if a shake-up would boost the company’s plunging stock price.

A group of WIN representatives have held private discussions with executives about whether new faces could arrest a ratings and revenue decline.

On Wednesday, WIN chief executive Andrew Lancaster and KPMG’s head of M&A Jon Adgemis met David Leckie, the former boss of the Seven and Nine networks.

While both parties privately insist that a potential job at Nine or Network Ten, of which Mr Gordon owns 15 per cent, was never raised, it’s understood his anxiety about Nine’s performance was put on the table. WIN has also spoken with former Telstra retail group executive Gordon Ballantyne.

Nine insiders have been frustrated by attempts to unsettle the management team, saying the move is an “unnecessary distraction”.

Mr Gordon, whose media company and separate privately owned investment vehicle owns 14.88 per cent of Nine, is concerned about the way the business is being run.

Nine had a disappointing ratings performance in the six months to June, which is translating to a declining advertising revenue share for the network.

All up, Nine’s share in the six months to June fell to 35.6 per cent, down from 38.6 per cent, according to the latest KPMG figures.

For Nine, this creates a big challenge and the situation is unlikely to reverse in this half given Seven has exclusive access to the Rio Olympics this month.

But Nine insiders insist the start of the 2017 ratings year presents an opportunity to refresh the schedule and boost advertising demand which is partly why Nine boss Hugh Marks has dragged forward programming presentations by four months.

Although Nine could see a small boost in revenues from a new affiliate deal with Southern Cross Austereo and will earn $20 million in annual simulcast fees from Fox Sports under a new NRL deal, it still faces underlying cost increases in relation to the NRL and cricket media rights contracts.

It’s understood that Nine shareholder Perpetual, which initially bought into Nine two and a half years at the company’s stockmarket float, has been lobbied hard by Mr Gordon’s WIN to support a change of leadership.

But while Perpetual is unlikely to back the campaign at this juncture, they are becoming increasingly impatient to see a return on their investment.

They will continue to give Mr Marks time to improve Nine’s fortunes for now.

The meeting with Mr Leckie took place just weeks after he severed ties with Seven after 13 years, declaring he’s “not finished yet” in an interview with The Australian.

Mr Leckie was chief executive of Seven West Media until June 2012, holding a consultancy position for the last year four years.

Known for his creative prowess and ability to pick hits, Mr Leckie steered Seven to the top of the ratings charts after arriving in 2003, commissioning a string of popular shows that delivered a record performance in profits and revenue. It comes as Nine pulls back the curtains on more than 500 hours of locally produced Australian entertainment, and 30 hours of new Australian drama, in a bid to breathe life into a tired schedule.

Nine chief sales officer Michael Stephenson said earlier this month that Nine felt “so confident in our upcoming content and prime time schedule” that it had kicked off presentations to media buyers and advertisers.

WIN has had a horror run investing in listed media companies in recent years, including significant losses in Ten and failed streaming service Quickflix.