Nine CEO Hugh Marks to leave by June

Nine Entertainment’s outgoing chief executive Hugh Marks will leave the media group ‘at some stage during the second half’.

CEO of Nine Hugh Marks in Sydney on Sunday after announcing his resignation. Jane Dempster/The Australian.

Nine Entertainment’s outgoing chief executive Hugh Marks will leave the media group some time by June next year, giving the company several months to look for a replacement following his shock resignation over the weekend.

And Nine chairman Peter Costello has issued his first comments to investors about the matter saying there will be an “orderly transition” of management.

“We respect Hugh’s decision, allowing us plenty of notice to work through the next few months, and enable an orderly transition. We wish him well in all his future endeavours,” Mr Costello said in a statement to the ASX.

Mr Marks’ relationship with the company’s former commercial director Alexi Baker, who left Nine last month, was publicly revealed on Saturday morning.

Mr Marks quit as Nine chief executive hours later following an emotional phone hook-up that split the board.

The fallout from the events has also put Australian public companies on notice to develop clear policies on relationships between senior executives and their employees.

The company said in an announcement to the ASX on Monday morning that Mr Marks would leave “at some stage during the second half” to June after the 54 year-old sent a memo to staff on Saturday afternoon informing them of his departure following five years at the helm.

Nine said Mr Marks will “actively continue” as CEO as the board, led by chairman Peter Costello, assesses its requirements and options, including both internal and external candidates.

Mr Costello said Mr Marks has been “extremely successful” during his tenure, which will help the group “through the digital age”.

Mr Marks said the group, which consists of a free-to-air television network, newspapers and streaming services Stan and 9Now, has achieved so much over the past five years, including the integration of its $4bn merger with Fairfax Media in December 2018.

“When I was appointed CEO five years ago, my brief was to lead the transformation of what was then a television business, to a digitally-based media company.

“We have achieved so much in that time frame. Bringing together three legacy media businesses, each with their own structural challenges, and investing in the assets that will ensure our position at the forefront of Australia’s media future,” Mr Marks said in the ASX statement.

With almost half of Nine’s earnings coming from its digital operations, Mr Marks said he was “confident this is an opportune time to announce my retirement, whilst giving the board plenty of time to appoint a successor”.

“I also believe that Nine has an incredibly strong management team, leading it across all its businesses.”

Two senior Nine Entertainment executives, digital and publishing boss Chris Janz and Stan boss Mike Sneesby, have emerged as the frontrunners to replace the network’s departing chief executive Hugh Marks.

Mr Janz, 40, and Mr Sneesby, 46, are seen by senior media executives as the most likely to be tapped by the Nine board to succeed Mr Marks, who stunned the media industry on Saturday afternoon with his surprise resignation.

Former Ten chief executive Paul Anderson is also seen as a potential outside candidate.

Mr Marks will walk away from a potential $5m payday, approved at the company’s annual general meeting on Thursday.

However Nine Entertainment’s board faces serious questions in the wake of the resignation after asking investors to back a $2m long-term bonus at the same meeting for the departing chief executive.

Shareholder Wilson Asset Management expressed surprise at Mr Marks’ abrupt resignation and said his departure would be a loss for the company.

“We’re big fans of Hugh, we think he’s one of the best CEOs on the ASX. It’s definitely a loss, no doubt about it,” Wilson lead portfolio manager Oscar Oberg told The Australian.

In terms of a successor, Mr Oberg thinks it likely Nine will look at an internal replacement, with enough quality and experience in-house.

“Mike Sneesby from Stan is very good; there are some high-quality executives within channel Nine… I don’t think the strategy needs to change very much. The foundations have been laid so from our end we think an internal candidate is what the business needs at the moment,” he said.

Last week, at the company’s annual meeting, Nine chairman Peter Costello was confronted with questions from shareholders regarding a Sunday Telegraph report and accompanying pictures showing Mr Marks picnicking with his executive assistant Jane Routledge earlier this year.

Mr Costello said he didn’t believe Mr Marks had breached the company’s policies or its code and that the subject did not warrant any further engagement.