Seven West Media has started a painful process to switch its operating model, prompted by rapid change in the media landscape.
Along the way, well known players in the agency and brand world, including popular chief revenue officer Kurt Burnette, CMO Melissa Hopkins and head of sport Lewis Martin, have been pushed aside.
They are among 100 jobs to go, according to insiders.
The first major move by the new CEO, former CFO Jeff Howard, was aimed at separating digital business from television, currently being hit by a stubborn slide in advertising revenue.
Howard started as chief executive on April 19, replacing James Warburton, taking over a media group in the middle of an advertising market dip.
The changes are designed to deliver a “new operating model” to deliver on strategy, that includes optimising television business and delivering on digital, where most media businesses are now concentrating.
In February, during the company's half year results presentation, "accelerate our digital future" was presented as one of four strategy pillars.
“To build a better media business and to make the most of the opportunities ahead of us, we need to change the way we think and operate,” Howard said.
“That includes changing the way our executive team is structured and how it works together.”
Seven now has divisions covering television, digital and Western Australia (where chairman billionaire Kerry Stokes is based and where the group has its newspaper base).
Ben Willee, general manager and media director at Spinach, said Kurt Burnette and Lewis Martin are universally respected.
“Both have extensive knowledge of sports rights deals and would undoubtedly be an asset to any cashed up streamer looking to get their hands on the large and engaged audiences watching Australian sports,” Willee said.
“I wonder if history will record this as a pivotal moment in the media landscape?”
Media analyst Steve Allen, Pearman’s director of strategy and research, said the change means a slimmed down version of Seven.
“Expensive executives from a financial point of view have been let go,” he said.
“From a market point of view, disappointing. However in these challenging ad revenue conditions what more could SWM do?
“A financial guy CEO, looking at things incredible pragramatically. SWM standing in the market will likely be diminished with executive experience, relationships, and contacts now lost or diminished.
“The largest gap in restructuring is sales relationships, marketing respect, and perhaps in-depth sport knowledge and how to negotiate with these sporting bodies. In my view these are keys to TV's future.
“We believe FTA TV is facing the most trying time it has ever faced. This will pass. It remains the most powerful communicator.”
Will Harms, co-founder and head of clients, Half Dome, said there’s no doubt it’s a tough time in TV land.
"Audiences are down, prices are up, and market sentiment has shifted," he said.
"Australians are now officially streaming first, and you only need to look at recent SMI (Standard Media Index) data to see how much that’s playing on the minds of media buyers heading into FY25.
"None of this is new news, but one thing I’ve noticed is shifting attitudes on client side. We are seeing TV move from being a mandatory inclusion, to a mandatory exclusion across briefs on the basis on price and rigidity.
"Something tells me this is largely driven by an inability to have data driven conversations with CFOs, but that’s not a problem isolated to TV.
Seven reported a steep drop in net profit after tax, down 52% to $54.46 million for the half year to December, reflecting "weakness" in advertising.
Revenue was down almost 5% to $775.78 million and the group is continuing a cost cutting program, with savings of $20 million to 25 million in the six months to June.
The company then said it was prepared to squeeze costs “as hard as we possibly can” if necessary.
Full year results are due to be released in August.
Seven West shares are trading at $0.175, down more than half the 12 month high.
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