Crikey



If Lachlan wasn’t a Murdoch, he’d be gone from Ten

After just two and a half hours sleep, at one level Lachlan Murdoch put in a sterling effort at the Ten Network Holdings AGM yesterday as he athletically roamed the stage in front of the directors for a little over two a half hours. At another level it was a singularly unimpressive performance as he ummed and ahhed his way through the meeting, struggling with the detail and refusing to engage on key issues.

I left the meeting more convinced than ever that he is simply not up to the job and should be moved on.

While Ten is facing the same structural challenges as Seven and Nine, the execution during Lachlan’s two years on the board has been dreadful. Having paid $1.43 a share to buy half of James Packer’s 18% stake, Lachlan continues to be propped up by his silent and invisible partner through their joint vehicle Cavalane.

There were many elements of yesterday’s AGM which were completely missed by today’s papers and one of them was the Packer-Murdoch relationship at Ten.

Having received a $US150 million payout in shares and cash when Wendi Deng’s two daughters were cut into the Murdoch inheritance, there remain obvious questions about Lachlan’s personal ability to sustain losses of more than $100 million at Ten. When asked about this yesterday, Lachlan insisted he was receiving absolutely no financial support from his friend James Packer.

Given the AGM wasn’t webcast — and journalists were forbidden from even recording proceedings for their own purposes — we’ll have to wait for Ten to provide a copy of the transcript to look at the detail of his various claims about where the power lies within the joint venture vehicle.

For instance, former McKinsey management consultant Siobhan McKenna has been Lachlan’s personal chief executive for the past few years after he quit News Corp in 2005. She came in through Lachlan’s investment vehicle Illyria and was a well-paid consultant at Ten in 2011 when Lachlan was acting CEO ahead of James Warburton’s commencement.

McKenna was comfortably elected to the board as Packer’s personal representative yesterday, although she gave me a big lecture about factual accuracy claiming she was only his “nominee” and there was a big difference. When asked why Packer couldn’t represent himself on the Ten board, both McKenna, his board nominee, and Murdoch, his financial partner, refused to explain.

You’ll have to ask Mr Packer,” Lachlan said. “He won’t return my calls, so I’m asking you instead,” came the reply.

Lachlan was similarly protective of his other great supporter on the board, Gina Rinehart. When I suggested the billionaire’s $90,000 annual fee should be docked because she only made it to eight out of 14 board meetings and couldn’t even get to the AGM on time, Lachlan instead blamed himself saying he kept calling board meetings at short notice.

This goes to one of the problems of effectively putting Lachlan in charge of Network Ten for the past two years: he simply doesn’t have the skills or time to make a good fist of it.

The issues within the News Corp board, the Murdoch family and Lachlan’s personal investments such as DMG have clearly been very distracting over the past two years. Given the disaster that has unfolded, it is surprising all these billionaires haven’t yet called time on Lachlan’s tenure. If he wasn’t a Murdoch, he’d be long gone.

Now that Packer has pocketed his $1 billion from News Corp from the sale of Consolidated Media Holdings, you would think he too would be fed up with losing $100 million on Ten.

Bermudan-based former billionaire Bruce Gordon has now dropped more than $300 million on his Ten investment and he sat sullenly in the front row during yesterday’s AGM. Ten’s former executive chairman Nick Falloon quite rightly argued Gordon couldn’t join the board after he bought Channel Nine in both Adelaide and Perth.

As Packer never understood during his campaign against Echo Entertainment Group, you never invite a competitor to sit on the board unless they pay an appropriate control premium to all shareholders. But once it was agreed that both Packer and Murdoch could join the Ten board — despite the obvious conflicts of interest — the entire board had to yield to Gordon’s request and he duly nominated lawyer Paul Mallam.

Interestingly, because Gordon himself isn’t on the board, he appeared to vote his 186.6 million shares in favour of the remuneration report yesterday, which surprisingly passed with more than 90% in favour.

Gina, Lachlan and Packer were all unable to vote. At least that’s one good thing that flows from being denied a board seat.

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33 Responses

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  1. And Gina Reinhart is lecturing Fairfax? If they worried about ratings they wouldn’t have Bolt on either.

    by Lano on Dec 7, 2012 at 3:33 pm

  2. Seriously, how hard can it be buying programs people want to watch.? The utter tripe 10 has sanctioned is beyond belief. And when Sara Murdoch appeared in the first promo for that dancing ”Thing” i felt for her. whoever thought Sara dressed like a character from ”Mad Max” would work.? I could go on and on re: what they need and why they shouldn’t have put on what they had in recent times. But what would be the point.? No ones listening. Has anybody at 10 read ”The Kid Stays in the picture” by Robert Evans.? If anyone has, then i DARE you to hire me and put that sinking ship back in the black, they have Nothing to loose.

    by peter bainbridge on Dec 7, 2012 at 3:42 pm

  3. PETER B: Unfortunately, commercial TV stations pitch their marketing at the great mediocrity of the average ten year old thought processes. This must take mediocre minds to get down to this level. It just looks as though channel 10 decided to lower the age to eight year old’s. And, for some strange reason the ten year old’s objected.

    On the other hand, you could always put your talents to raising the level of Channel two.

    by Venise Alstergren on Dec 7, 2012 at 3:54 pm

  4. Hi Venise, Hope the rehab is going well.
    ‘If Lachlan wasn’t a Murdoch’ he would be selling Heralds outside the Bridge Hotel Richmond for his coppers.
    The male progeny of Keith Murdoch, without their overloaded bank balances and monopolies, have shown little financial acumen let alone business ethics.
    I do hope that the workers super funds have grasped that fact.
    .

    by Mike Flanagan on Dec 7, 2012 at 4:42 pm

  5. Attendees being forbidden from recording suggests the board’s paranoia of having something to hide - incompetence, for example.

    by zut alors on Dec 7, 2012 at 5:18 pm

  6. I throw out the challenge to the powers that be at 10. Give me 10 programs your thinking of buying and I’ll tell you with 30 seconds to 30 mins watching each one if you should buy or pass. I’ve been in this business for 20 years as a photographer-and a pretty good one. (pardon the back slapping)

    Watching 10 over the past 18 months was like watching a cheap electricial using second hand wiring. You JUST knew the house would burn down. The people calling the shots shouldn’t have been put in charge of a punch & Judy show let alone a TV station. Some of the choices made where horrendous. beyond belief.

    by peter bainbridge on Dec 7, 2012 at 5:24 pm

  7. PETER B: If it’s writing you are into you might consider spelling properly Para one, line one…you’re not your. Line para one line two…”I’ll tell you within, not with”.

    Para two, line one, “like watching a cheap electrician, not electrical”. Line three “Punch and Judy”, not lower case ‘p’. Line four Beyond belief, upper case after full stop. Actually a hyphen would have been a better form of punctuation in this case.

    I’m sorry to be pedantic. However, if writing is your choice of career it’s best to submit clean copy.

    Also from a photographer.

    by Venise Alstergren on Dec 7, 2012 at 5:43 pm

  8. Well well. Surely if Lachlan was not a Murdoch he would not actually be there in the first place. And it’s not like James Packer set up the fabulous Crown rivers of gold deal! And of course Gina created all that iron ore all by herself?

    by Will Arnott on Dec 7, 2012 at 5:52 pm

  9. @Peter B, you’re a great photographer, programming a schedule is a different game.
    Everyone is a genius in hindsight. One never knows with great certainty what will or wont work. The reasons behind the very core of the problem is essentially poor ratings which has translated to a massive drop in advertising revenue. Part of the reason for this has been a significant migration of its core demo to online screen time. Be it social networking, downloading or streaming. Ten simply hasn’t caught up with this change. Their online presence and offering simply isn’t good enough.

    N.B unfortunately distribution rights are often very restrictive on what a broadcaster is allowed to put online…things outside of Ten also need to change.

    by Hugh John Reddit on Dec 7, 2012 at 6:02 pm

  10. @Venise. I do get a tad enthusiastic at times. And yes, i should have subbed. Thx.

    by peter bainbridge on Dec 7, 2012 at 6:06 pm

  11. Rich means never having to take responsibilty.”?

    by klewso on Dec 7, 2012 at 6:09 pm

  12. @Hugh. Buddy, hindsight.? for Laura Bingle.? The Shire.? Everybody Dance Now.? Paul Henry.? How anyone could stay in the same room with Henry for more than 10 mins without splapping him. Let alone watching from a distance.! A complete cock of a man. Need i add to the list.? Regardless of the broacasting restrictions, its all about content, and they had none. And what they chose to air through whatever medium at whatever cost it was truly appalling. If you price a show cheaply, and it doesn’t work, then its expensive. We get what we pay for don’t we.

    by peter bainbridge on Dec 7, 2012 at 6:23 pm

  13. How much revenue does Blot bring to TEN?

    by Hamis Hill on Dec 7, 2012 at 6:25 pm

  14. PETER B: Sore rite.

    HAMISH H: I don’t know; but I do know the man’s a blot on society.

    by Venise Alstergren on Dec 7, 2012 at 6:45 pm

  15. The decision to drop AFL football was a massive blunder . One has to wonder if it was a decision based on Fox sports ( Murdoch ) or on Tens economics . With the AFL you get the games themselves but shows that feed off football , cheap to produce . There is also the fact that some people watch the footy no matter what team is playing and guarantee decent ratings .
    Fairfax looks to have acted wisely in respect of Gina and her refusal to keep the board line on editorial hands length policy .

    by geomac62 on Dec 7, 2012 at 8:42 pm

  16. geomac if Crikey provided recommendations you would get a zillion from me. “The decision to drop AFL football was a massive blunder . One has to wonder if it was a decision based on Fox sports ( Murdoch ) or on Tens economics . With the AFL you get the games themselves but shows that feed off football , cheap to produce . There is also the fact that some people watch the footy no matter what team is playing and guarantee decent ratings”.

    by floorer on Dec 7, 2012 at 9:28 pm

  17. I think it’s a no brainer, Lachy would’nt even be making the coffee. The conflict of interest and the sudden and dramatic decline of ch 10 is of no coincidence to me.

    The Murdochracy are the sole reason why “Focks” will not be seen on my telly.

    by TheFamousEccles on Dec 8, 2012 at 9:01 am

  18. Ten’s programs for adults are “The Good Wife” and “The Project”.
    The rest are for no one with a pulse.

    by Arty on Dec 8, 2012 at 11:27 am

  19. MIKE FLANAGAN: I’ve been out of rehab for ages. {7 weeks with a bad hip, and confined to home.}

    I read a funny comment re: the Murdochs. “James Murdoch is the only person on the planet who could make Lachlan Murdoch look good!” (An English news bod) This crack might be the literal truth. If he’s so difficult to get along with…….etc.

    by Venise Alstergren on Dec 8, 2012 at 2:50 pm

  20. There are so many “trust fund brats” around most seem to do “art” because it’s easy and what is art anyway. Some think they can run businesses and make a profit. Remember OneTel - the main thing they could not get right was their billing system. Go figure.

    by Demas on Dec 8, 2012 at 3:59 pm

  21. It seems that James is the evil, eel-like one, Lachlan the total moron and Liz.. is Goldilocks?
    Rags to rags in three generations is an old saw.

    by AR on Dec 9, 2012 at 8:55 am

  22. Goldilocks certainly filled her bag of tricks before she let go with her ‘ethical’ spray on James and the old man.
    Lets hope the Foreign Affairs Dep mark all their passports ‘return to sender ASAP’ after they have attended the matriach funeral service.

    by Mike Flanagan on Dec 9, 2012 at 10:41 am

  23. DEMAS: It should have been a case of ‘For whom the OneTel tolls.’ I just can’t figure out why James Packer gave Lachlan Murdoch another chance?

    by Venise Alstergren on Dec 9, 2012 at 12:49 pm

  24. Venise;
    That’s the same James that the old man referred to publicly as ” my idiot son”?
    It is amazing how similarities attract!

    by Mike Flanagan on Dec 9, 2012 at 1:29 pm

  25. When broadcaster chooses to effectively tell half its potential audience that their attention is surplus to requirements it has to replace it with a full supply of its own adherents. There are obviously not enough right wingers and their supply of outraged feelings to support 3 channels. Not enough chooks. When the Murdochs and the Rhineharts and their ilk zeroed in on what was a slightly centre-leaning channel the writing was on the wall.

    by pritu on Dec 10, 2012 at 8:36 am

  26. MIKE: Hahahaha….Did the old man really say that? Well, I guess he would have known. Hehehehehe

    by Venise Alstergren on Dec 10, 2012 at 1:04 pm

  27. Venise;
    Indeed he did in the middle of an editorial newsroom at the top of his voice.

    by Mike Flanagan on Dec 10, 2012 at 2:15 pm

  28. MIKE: It’s probably the first time Rupert Murdoch has told the truth-in his life.

    by Venise Alstergren on Dec 10, 2012 at 6:33 pm

  29. Venise;
    It was Kerry P himself.

    by Mike Flanagan on Dec 10, 2012 at 7:47 pm

  30. MIKE: I thought you meant that Rupert Murdoch had said it about his son Lachlan. Which leves me wondering if Kerry P said it about his son James, or did he say it about Lachlan Murdoch?

    by Venise Alstergren on Dec 11, 2012 at 10:07 am

  31. Venise;
    It was the volumnous Kerry P, displaying his management and child rearing skills, referring to his own flesh and blood. And he wasn’t spilling tears in a kitchen financial wake either.

    by Mike Flanagan on Dec 11, 2012 at 11:28 am

  32. MIKE: Ahh! Now I understand. Just shows, the more money one is left the more one can afford to purchase v clever advisers, thus rendering the need to think obsolete. What a wonderful world the mega-rich live in.

    by Venise Alstergren on Dec 11, 2012 at 1:51 pm

  33. Yes Venise, they are particular highly intellectually endowed venerable lot.
    I suspect that if you gave the military command “eyes left” to our sub-group of media moguls the sound of rattling nutrs and oddments would be deafening.

    by Mike Flanagan on Dec 11, 2012 at 2:57 pm

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