Why does the new PBL chief want to keep his old gig.
The hopes of Australia’s magazine publishers rose at the news that the remorseless John Alexander had been made CEO of PBL, their spirits slumped when the full statement revealed that he was keeping an iron grip on the ACP Magazines business. That’s despite David Gardiner, the chief operating officer and fixer of things mechanical and financial, had been made deputy CEO, when he should have really been upgraded to the role Alexander would not relinquish.
There are a few theories as to why Alexander would let ACP go on replacing Peter Yates last week. We’ll run through the Packermeter and see what you subscribers and readers think. The most absurd is that there is some sort of black hole or disaster in ACP that is being covered up. Then there’s the bolthole theory, that if he fails as CEO, he has a bolt hole. But are there any boltholes at PBL?
Then there’s the keep himself occupied theory, which has a grain or two of reality in it. Another is that it’s his proudest achievement in his life and he doesn’t want to let it go, or allow someone else have a go at running it – or wrecking it. That too has some grains of reality.
But Crikey thinks that John Alexander is a very astute observer of business. It’s what has differentiated him from other journalists and in his time in management. He observes people, quickly working out strengths and weaknesses and how to play to them, or ignore them. This has held him in good stead at PBL, especially as he watches the Packers at play, at work and dealing with their minions.
Alexander knows the one thing that keeps you out of harm’s way at Packers’ PBL is to be ‘handy’, to be a person who does a good job managing their assets, not the company’s assets. Because to the Packers, especially the old man, PBL is their’s. The fact that it has 64% of the shares held by non-Packer shareholders is, well, incidental.
In his time at PBL since 1999 he has observed that CEOs in Nick Falloon and Peter Yates didn’t have much to do, if you think about it. He intends having a lot to do, so as to keep out of the firing line as much as possible. Take Nick Falloon, CFO at Nine, then CFO at PBL, then CEO, and then out the door because James wrongly thought him too negative on OneTel.
Hahaha the Sydney business community scoffed at James, but that didn’t do Nick any good getting his gig back. However, he left with the best part of $20 million in goodbye money and shares, testimony to his long and valuable service to the Packers, so that didn’t matter one jot in the end.
At Ten, Nick is executive chairman, like James at PBL, but far more involved in the business side of the network, while John McAlpine runs the TV side. Then there’s Peter Yates, apart from the odd deal, like burying ecorp, selling the eBay stake (which got good money, but will prove to be the silliest deal the Packers have done in a long time in the next decade), the 25% of seek.com and a few other things, he had nothing to do.
Kerry Packer even wouldn’t let him present at financial and investor conferences. There’s a famous case of a UBS seminar in Sydney a year or so ago where Packer wouldn’t allow presentations, and only allowed him to answer one question. It was a long answer. A very, very short leash. It was no wonder he’s a relieved man at departing Park Street.
The one common factor from the careers of Falloon and Yates is that they didn’t have operational roles within PBL. Nick Falloon may have come from Nine, but David Leckie was there. Yates came from Macquarie Bank but had an interest in gaming, but the competent Rowen Craigie has looked after that. Even though the Burswood bid was made, it was a deal, not an operational gig.
And during the time from 1999 to this week, who was running the magazines at ACP, observing, improving, fawning upon Kerry Packer, but proving himself in an operational role that the old bloke understood? Why, John Alexander of course. He may be a micro manager, unemotional, not very friendly, indeed cold, but he’s a very quick and clever learner.
No Packer barbs like ‘what are you doing here, son?’ The Packers knows what he has done and what he does. Dramatically boosted returns from the magazines, one of the original hearts of the business. Earnings more than trebled in three years to over $180 million a year. Costs down, especially returns and printing charges.
Of course there will be plenty of meetings, lots of delegation and lots of long hours, much of it by underpaid juniors, middle level employees, as well as the highly-paid publishers and their groups. David Gardiner will see to that. John Alexander will see that that happens.
Better that than those dreaded Kerry Packer barbs, which have reduced lots of strong executives at Park Street to silence. Alexander knows that he cannot have a strong say at Nine now that the Packer godson, David Gyngell, is running things. He is almost family and closer to the Packers than Alexander will ever be. Gyngell has problems to fix, but will be allowed to do that. If he fails they try and find someone else, but Alexander would not want to return to Willoughby very much in the future. He didn’t much like crossing the Harbour Bridge, like so many other people in Sydney’s Eastern Suburbs.
People at Nine, even the new guard, didn’t much like having him at Willoughby. He just doesn’t know very much about the making, the programming and the skills of TV. It’s so unlike ACP and magazines, despite the superficial similarities. He would also know that TV is terribly competitive and very conflict riven with personalities, especially the highly paid on air staff who can sink you quite easily. John Alexander is not a noted ‘people person’. he’s totalling lacing in skills in this area and to him the only way is through money.
This is very different to ACP, where its all phone calls, quiet manipulation and doing what you please because you control around half the circulations and advertising dollars in the country. Afterall, every outlet needs ACP magazines. It is much easier to run that sort of business and look good.
This is so unlike TV, where, in the midst of a boom, the ad dollars are flowing like Saudi crude. It’s a river of gold at Willoughby and they know it. They also know it won’t last forever, which is when the really good TV managers come into their own.
Casinos and gaming JA can’t run or keep his hand in. They are foreign territory, highly specialist with huge human resources needs, and that’s not one of John Alexander’s strong points. Rowen Craigie is on the board and on top of the business.
So its ACP and the magazines. What he knows best about PBL. Whether that makes him a good all-round media manager is debatable.
But Kerry Packer clearly likes him. And Kerry Packer is clearly supporting him by becoming deputy chairman. James, you see, was a Peter Yates man.
Kerry will be there, every day, watching TV, the magazines, yelling down the phone, raging in his office, complaining to executives from his hospital bed, but he will be backing up Alexander.
Because that’s all Kerry Packer has to run his business. His son is executive chairman and has an uncertain future. John Alexander has the ability, and the sense to have recognised that about his relationship with Kerry Packer. But keeping an operational role makes you more valuable, and in Park Street for quite a while.