By Calum Jaspan and Stephen Brook
So farewell then to James Warburton, Seven’s ebullient, mercurial, crazy brave chief executive.
It is tempting to look at Warburton as Australian TV’s last great showman, now to be replaced by … the finance guy.
Seven’s chief financial officer, Jeff Howard, unknown to media types and, crucially, advertisers, will take the reins in June.
Seven chief executive James Warburton is leaving the media company.Credit: Dominic Lorrimer
In Thursday’s media statement on his departure, neither Warburton nor company major shareholder and chair Kerry Stokes really articulated a compelling reason for him to leave.
Two schools of thought emerged after reading the tea leaves of Warburton’s departure: Seven and Stokes are readying to cut costs, or prepping for a sale or merger. It seems certain his successor will not be getting the same amount of cash.
Incoming CEO Jeff Howard says the ad market’s struggles are cyclical.
Taking a near 20 per cent stake in fellow media company ARN in November, Seven said it was positioning itself to get in on whatever consolidation was to come. Mergers and acquisitions were top of Warburton’s agenda four years ago, yet its deal to buy regional media company Prime remains the only major purchase of note, amid a flurry of sales.
Two executives with direct knowledge of the conversations told this masthead that Stokes had sounded out interest in Seven from News Corp and Network Ten owner Paramount in the past two years. The conversations were only in their infancy and did not address how any deal would get around ownership rules.
A spokesperson for Stokes said no such conversations had taken place.
If a deal is on the cards, surely the dealmeister would want to stick around for the glory and the bonus and then call it a day?
“It’s nice to go out on your own terms and to provide an orderly transition. Not many CEOs in most industries get to do it and very, very few in media,” Warburton said.
“There are a couple of opportunities that I’ve been looking at and speaking with. The majority are outside the media, to be frank.”
Most Seven executives only found out about Warburton’s departure on the morning of the announcement, one said in the hours after, while another said it was privately signposted recently.
Warburton wanted to build a bigger media company. But that was slow-going. Often bold and outspoken on Seven and free-to-air’s prospects, he built his reputation as a salesman, a dealmaker, someone willing to stray into territories other media executives would not dare.
“He’s been great for Seven, he has been great to work with. He’s been out on the warpath for free-to-air television, and he is very effective,” a Seven executive, speaking anonymously so they could speak freely, said.
Another former network media executive said it was a sad day for Australia’s television industry, which was losing one of its great “agitators”.
“Unless you’re trying to do things, you’re giving up,” they said, speaking anonymously due to their ongoing involvement in Australian media. “It’s a loss to the industry. James is the only doer or urger … The replacement is fairly indicative toward Seven’s future … and it isn’t a creative one.”
Seven months into his tenure in 2020, this masthead predicted Warburton’s second stint at the company was destined to fail.
“Warburton will fail because it is impossible for anyone in the gig to succeed,” the column read, joining a company riddled with debt, revenue in decline and growing pressure from global media conglomerates.
Warburton was so exercised by this prediction that he had the column framed and put on his office wall as motivation.
So, what has changed?
While he and Jeff Howard have reduced its debt by the tune of $300 million, Seven remains a company reliant on television, which is again experiencing revenue shrinkage. Extending deals with the AFL and cricket will be one of Warburton’s enduring gifts.
There was an ominous signpost on Monday to where we are all heading. Amazon Prime Video swooped in and bought the rights to all International Cricket Council men’s and women’s matches for the next four years, though privately all the networks said they weren’t fussed to miss out.
And while Seven’s recent fiscal results say digital earnings now account for more than 49 per cent of total group earnings, Warburton has said the best is yet to come, with digital contracts for its marquee sports kicking in next year.
And despite a share price 34 per cent worse than in mid-2019, and no dividends paid to shareholders during Warburton’s tenure, Howard said it’s an exciting time to be taking on a role at a company with so much potential ahead of it.
“Markets are tough, but ad markets go in cycles. I’m really excited about where this business is going to go,” he said.
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He spent six years in London working for The Guardian.Connect via Twitter or email.