David Gyngell: The office squatter who pushed him to the brink

It was the culmination of years of simmering tension between Nine’s chairman and CEO.

David Gyngell, Nine CEO (R) with COO Simon Kelly (L) as full year results are announced. Pic - Britta Campion

On a warm October afternoon Nine Entertainment Company chairman David Haslingden sat in an office on the third floor of the company’s Willoughby headquarters in northern Sydney — the building often referred to as the birthplace of television in Australia.

Haslingden had based himself in this office for the afternoon, as he met with a number of senior Nine executives, including director of television Michael Healy, then commercial director Amanda Laing and news and current ­affairs boss Darren Wick.

Not only was it highly unusual for the chairman to be walking the floors at Willoughby but the office he settled into happened to be that of then chief executive David Gyngell.

Eight years into his second stint as CEO, Gyngell’s retirement was imminent.

But the man who has been ­credited with saving Nine from a period of managerial turmoil and guiding the company through a near-fatal debt restructure was not about to cede control of the business just yet, let alone his own office.

On hearing the peculiar news of an office squatter, Gyngell ­immediately called his chairman.

The two are said to have ­engaged in an almighty scrap — obviously not the kind of physical altercation Gyngell had with childhood friend James Packer at Bondi Beach in 2014, but just as vehement.

Gyngell could be heard over the following days telling the troops at Willoughby about the fight. By all accounts, Haslingden was mum on the events.

It was the culmination of years of simmering tension between chairman and CEO, as well as a more recent power struggle relating to succession at Nine.

Of course, history says Hugh Marks took the reins. But Marks, a smart and well-mannered ­former lawyer and TV production executive, was not widely seen as the obvious choice in a replacement process described by Nine insiders as unorganised, rushed and ultimately flawed.

It was as though Haslingden and the board didn’t believe ­Gyngell would actually go, ­despite repeated warnings to the contrary.

This is not to suggest Marks was the wrong choice. But should his tenure be deemed a failure, the succession process will be a key focus in the post-mortem. Instability at the board and executive level won’t make his job any ­easier.

When Marks took over from Gyngell on November 10, Nine’s board had lost three directors in 12 months. Less than two weeks later, Apollo Global Management sold its final $140 million stake in Nine, leaving its board nominee Steve Martinez to keep the seat warm for a ­replacement.

Marks is moving to stamp his mark on the business and boost its focus on content, which was ­evidenced by the rehiring of Nine’s former director of development Adrian Swift from the ABC last month.

But the extent and speed of the executive exodus at Nine must be of concern to Marks.

A month after Gyngell’s resignation in November, The Aust­ralian revealed chief operating officer and chief financial officer Simon Kelly was headed for the exit.

In December, it was revealed long-term director of commercial development Martin Hersov was leaving and last week strategy ­director Melanie Kansil resigned suddenly.

It should also be noted that ­before Marks’ appointment, but amid concerns about the post-Gyngell era last year, former Nine Perth managing director David Mott, group sales director Matt James, senior news executive Craig McPherson, programming executive Courtney Gibson and mi9 director of TV Rebecca Haagsma all left the company. It means that in a year Nine is ­expected to be a key player in major media consolidation in ­anticipated reform of the sector, the company’s deal-making team has been decimated.

Gyngell (who still sits on the board), Kelly and Kansil have gone and long-term adviser Michael Stock defected from UBS to Credit Suisse.

These are the ­people who spearheaded Nine’s $3bn debt ­restructure in 2012, the buyout of digital joint venture mi9 in 2013, the company’s $2.5bn stock­market float in the same year and the $640m sale of ­Ticketek last year.

Of those involved in the key deals, Laing, who was recently promoted to Nine managing ­director, and Alexi Baker, who worked closely with Kansil, remain, while Stock is well regarded in the industry and has a good chance of retaining Nine as a client at Credit Suisse.

But given Gyngell was synonymous with Nine for so long, his departure alone was concerning enough for the future of the proud and hugely successful network previously owned by three generations of the Packer family.

Gyngell and Haslingden are said to be on good terms now. But insiders believe Haslingden was eager to be CEO himself, at least for an interim period.

But one plan that had been in the works for several years, and had been widely expected within Nine to come to fruition, was for Gyngell to step back into the chairman’s role and Kelly to take over as CEO.

Kelly’s lack of content experience would be supplemented by Gyngell’s programming abilities. Furthermore, Nine’s senior programming team is loaded with experience, led by Healy and managing director of programming and production Andrew Backwell.

But it was not to be. Gyngell was ready for a break after a rollercoaster 17 years at Nine over two stints. He felt he would face the same ­scrutiny from ­investors and the media as chairman while getting paid a tenth of the salary he received as CEO.

Kelly was aligned with Gyngell. So with Haslingden remaining as chairman, the COO’s elevation to the top job was unlikely, although it’s understood other alternative chairman were spoken about.

Marks may well prove the right choice, but there are two schools of thought within Nine about his appointment.

One is that he was always considered a potential successor to Gyngell and that’s why he was appointed to the board in 2013 before the float. The other is that his appointment was a comfortable compromise in the Gyngell- Haslingden feud.

All of this will be irrelevant should Marks prove a success.

And insiders have said he has a good grasp of the business and is asking the right questions, while his considerable industry experience and knowledge of content are obvious.

Meanwhile, Nine is on the hunt for new board members, which could prove a critical ­juncture in the company’s future direction. If Haslingden appoints an ally, he could secure control of the board ahead of any potential power struggles in the future.

Then there is major shareholder Bruce Gordon, billionaire owner of WIN Corporation, waiting in the wings for board representation.