One of the problems with coverage of the media industry in Australia is that there is so little genuinely independent reporting.
The right-wing standover racket run by News Corp is arguably the biggest problem but you also have the broader issue of even progressive outlets sometimes enjoying taking pot shots at competitors, often driven by grudges or desires to get square.
We all play that game at times. I’m happy to admit to producing dozens of negative stories about Kerry Stokes in multiple outlets ever since he called security on me at the 2008 Seven Network AGM.
Over the years, Crikey has produced many negative stories about Fairfax, and yesterday’s Glenn Dyer piece on the appointment of Stan’s Mike Sneesby as Nine’s new CEO included a number of cracks at Nine chairman Peter Costello.
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Truth be told, Costello has never been more buoyant in his professional life than at the moment as he chairs two very successful corporate institutions, Nine and the Future Fund.
With Nine shares hitting a record high as it heads towards a stunning $550 million annual profit, Costello appears to be winning the succession war with deputy chairman Nick Falloon. Former Fairfax chairman Falloon is under investigation for allegedly taking a golf club corporate membership from Domain national sales director Simon Kent and giving it to his son.
The story was well known inside Domain ever since the incident happened in July 2018, just six months after Falloon saw to the resignation of Domain CEO Antony Catalano and appointed himself executive chairman at a time when he was also non-executive chairman of Fairfax.
Given the way Falloon disposed of Catalano and appeared to have board control at Fairfax, Domain insiders were reluctant to raise a complaint about the golf club membership and there was never any official investigation — although Catalano didn’t hold back in letting people know about it.
However, when highly popular Nine CEO Hugh Marks was forced out of the company after what many believed were board games involving Falloon, a whistleblower complaint against Falloon was lodged by a Marks loyalist.
Costello rates Marks as one of his closest friends so it should come as no surprise that his forces on the Nine board resolved to commission an independent investigation — in much the same way Prime Minister Scott Morrison should do with Attorney-General Christian Porter.
The law firm Ashurst is expected to report back in coming weeks and don’t be surprised if Falloon then exits both the Nine and Domain boards after a six-year stint which has paid him more than $2.5 million in cash.
Costello has also enjoyed a good run on the Nine board ever since the business was floated out of administration in December 2013 and he replaced the conflicted former News Corp executive David Haslingden as Nine chairman in 2015. Haslingden was paid $458,526 in 2013-14 and Costello’s cash board fees from Nine have been as follows over the past seven years:
- 2013-14: $188,094 as a director
- 2014-15: $180,000 as a director
- 2015-16: $266,266 as a director and then chair
- 2016-17: $390,068 as chair
- 2017-18: $340,000 as chair
- 2018-19: $340,000 as chair
- 2019-20: $340,000 as chair.
Assuming his $1000-a-day chairman fee is still coming through, the total pre-tax amount comes to a tasty $2.28 million since December 2013.
Then you’ve got the Costello equity exposure to Nine which is a handy 301,786 shares, worth $917,429 based on last night’s closing price of $3.04.
Costello has plenty of reasons to smirk. He won the board debate over the appointment of new CEO Sneesby which, frankly, appears to be the right decision.
Chief publishing officer Chris Janz has done a great job transforming the publishing division over the past six years but having never worked in television or radio he lacks the breadth to be CEO of Australia’s biggest and most diverse media company.
That said, he is clearly a talent who should be promoted and nurtured. Sneesby could do worse than making Janz deputy CEO of Nine and putting him on the Domain board.
And speaking of Domain, if Falloon does exit there’s a ready-made successor as chair already sitting on the board. His name is Hugh Marks — and he is great mates with Costello and Sneesby, who both would love to keep him engaged with the company after a stellar five-year run as CEO.
As for Costello, he remains a politically inappropriate chair of Nine, as Crikey has argued before. This is despite the excellent performance and his relatively hands-off role as chair, particularly during the Marks era.
With his preferred Nine CEO in place and once Falloon is disposed of, Costello needs to start focusing on chair succession with the obvious final jumping-off point being when his current three-year term expires in November 2023. However, an earlier departure would be preferable as chairs generally shouldn’t serve more than five or six years in the role.