Stokes picks Voelte to navigate media turmoil

WHEN Don Voelte stepped down as Woodside Petroleum CEO last year there was little indication he planned to do much more than use his board membership at Seven West Media as an excuse to regularly visit Perth, a city he admitted he had grown fond of.

But seismic shifts are taking place in the media landscape and clearly Seven West Media chairman Kerry Stokes believes a fresh eye is required to interpret what is being seen through this lens of fast-paced change.

While Seven West Media has been part of that shift – merging Seven Network and The West Australian newspaper last year – it has been the news of the past fortnight that has truly underscored how much turmoil traditional media is in.

Fairfax has moved to cut 1,900 staff, close two printing presses and change its two key broadsheet dailies, The Sydney Morning Herald and The Age, into tabloids next year. This week three key editors of those newspapers quit.

In the background, iron ore magnate Gina Rinehart has nearly 19 per cent of Fairfax and wants three board seats, prompting renewed political calls for new media
regulation.

Also last week, News Corp announced a sweeping restructure, redundancies estimated to be around 1,000, the acquisition of the Business Spectator and Eureka digital news business for more than $22 million and a bid to acquire pay TV company Consolidated Media Holdings.

With all that going on, it appeared to some like odd timing to draw attention to Seven West Media’s leadership. It was almost as if there was no choice in the matter. 

While Seven West was known to be looking for a replacement for former CEO David Leckie, many observers are wondering what Mr Voelte brings without media experience beyond his board role.  

In the short term, his strengths are clear.

He is a hard-nosed businessman that understands strategy, has run a large public company, can make difficult decisions and may bring a fresh perspective to a business that is being rapidly left behind by digital developments. 

Mr Voelte also has two senior executives that can easily run the more or less autonomous business units beneath him. Chris Wharton heads WA Newspapers while Tim Worner runs the TV station.

Compared to some other media assets these have both proved resilient. Channel Seven heads the national ratings and The West has held circulation better than most, although some observers point to falling readership figures as being more indicative of the business’ trend.

More importantly, The West will have just finished negotiations with big advertisers regarding the year ahead. That could reveal a more important trend.

While the focus last week was on the cutbacks at Fairfax and News Corp, the real news was that both companies were jockeying to position themselves better in the digital space, jettisoning some of the heavy baggage holding them back.

Seven West Media has done very little in this space. Its digital strategy involves a joint venture with Yahoo! which has made some acquisitions in sports betting and buying groups.

It will be Mr Voelte’s job to find a pathway quickly, although the market’s early reaction did not reveal a lot of confidence. The share price dropped nearly 14 per cent on announcement day.