Hint of panic as Kim Williams quits News Corp
Fairfax writer Tim Elliott, who has been working on a profile of Kim Willlams, explains what lies behind the News Corp CEO's departure.PT3M35S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2rlug 620 349 August 9, 2013
- Kim Williams resigns as News Corp chief
- Dear Colleagues - Williams' farewell note
- The new boss: a News man to the core
In his farewell note to News Corp staffers today, Kim Williams said his time in charge of News’ Australian operations had been marked by ‘‘many good wins matched with some memorable awful problems and opponents’’.
There certainly were some important wins.
CEO Kim Williams leaves News Ltd headquarters on Friday following the announcement of his departure from the company. Photo: James Alcock
He devised a $2 billion takeover of James Packer’s Consolidated Media group last year that doubled News’ ownership of the Foxtel pay-TV group to 50 per cent, and carried it from 50 per cent to full ownership of Fox Sports, a crucial and profitable supplier of content and channels to Foxtel.
When Rupert Murdoch split News Corp globally this year into two listed companies, one centred on pay TV, broadcast TV and film and the other centred on publishing, the Australian pay-TV assets that Williams embraced went across to the publishing arm, new News Corporation.
The industrial logic of that move was questionable, but the financial logic was not.
The print media assets inside new News Corp, including News’ newspaper interests in the United States, the United Kingdom and Australia, are generating close to two-thirds of new News Corp’s revenue, but they face the same challenges from digital media that all established publishing operations face.
The pay-TV assets that were also inside the company and were bulked up by Willliams are smaller, but have a stronger revenue and profit growth profile. They are yeast in the new News Corp cake.
Williams’ departure, and News’ decision to replace him with one of the Australian publishing group’s old hands, former Herald and Weekly Times managing director and HWT chairman Julian Clarke, suggests however that it was the fights and losses inside News’ Australian arm that eventually told.
News Corp has always had operational control of Foxtel, and Williams was running the pay TV group in December 2011 when it was announced that he would cross over to replace John Hartigan as boss of News Ltd, News’s Australian media arm.
He came in with a brief to be a change agent and meet the challenge from digital media that all established print-heavy media groups face.
The changes he wrought were substantial, extending beyond the Cons Media acquisition to root and branch restructuring of News itself, but he made enemies in the process.
Editorial production and commercial processes including advertising sales were unified under a ‘‘one city, one newsroom’’ mantra, and editorial numbers were rationalised. External management consultants were engaged.
In another business, it would have been unexceptional. In the tribal world of newspapers where structural and cyclical pressure on revenue and profits is extreme and changes take time to flow to the bottom line, however, there was push-back from key lieutenants including editors. Williams was an outsider making changes that made commercial sense, but the paradox was that the very fact that he was a print media outsider counted against him.
The recent arrival of News’ former New York Post editor Col Allan with a short term brief to ‘‘take the tabasco’’ to News’ titles was widely regarded as an ominous sign.
The role that Williams played in last year’s $1 billion-plus auction of Australian Rugby League broadcasting rights may also have been influential.
He was a key player in the auction, and it was won by the Nine network and Fox Sports. The Ten network was squeezed and its 9 per cent shareholder and chairman, Lachlan Murdoch were squeezed out. Foxtel’s win was a financial win for News, because by the time the rights were auctioned it had moved to full ownership of Fox Sports, and doubled its stake in Foxtel to 50 per cent, matching Telstra’s 50 per cent shareholding.
Lachlan Murdoch has continuing significant influence at News, however, he resigned as a News executive in 2005, but is a director of both the new News Corp and the TV and film spin-out, 21st Century Fox. He is also being talked about again as a potential successor to Rupert Murdoch after the US telephone hacking scandal damaged the prospects of his brother, James.
For Williams, Fox Sports' win in the rugby league auction may have come at a political cost.