When the Nine Network’s CEO Hugh Marks and Fairfax Media’s chairman Nick Falloon met up at Sydney breakfast spot Jagos in June 2018, they agreed on an idea that would create both Australia’s biggest media company and one of the Stock Exchange’s most divided boardrooms. Nine, with a market capitalisation of $2.2 billion, would merge with Fairfax, at $1.7 billion, to create a publishing and broadcasting organisation larger than rival News Corp.
The new Nine was the only company in Australia with assets in almost every medium. It owned — and still owns — the most profitable TV network; the streaming service Stan; some of the nation’s most respected news mastheads, in the Age, the Sydney Morning Herald and the Australian Financial Review; and a majority stake in a talk-radio network with number one stations in Melbourne and Sydney, since converted to full ownership.
But it soon became clear this was less a merger than a takeover. Nine’s Hugh Marks got the top job as CEO. In most such mergers the chair would usually then come from the other side of the deal. But despite being the more experienced media operator, Falloon missed out and Nine’s Peter Costello became chairman. The result was a board divided into Fairfax and Nine factions.
Also behind the scenes, a long-term cultural problem was rumbling on. The TV newsroom — run by director of news and current affairs Darren Wick, a network veteran — was an unhappy place for some women. That would eventually hit the public domain, but not yet.
First came Hugh Marks’s exit. His timing, if not his decision, was precipitated by Nine’s biggest rival, News Corp. In November 2020, the Sunday Telegraph revealed that Marks was in a relationship with one of his subordinates, Alexi Baker. During a fractious meeting that weekend, the board was divided over how to handle the issue. Marks decided to announce his resignation.
Selecting his successor was similarly divisive for the board. The Fairfax camp wanted Chris Janz, the talented publishing executive who in 2017 had rebuilt the business model of the Age and the SMH and saved the mastheads from going online-only. Costello, though, was a fan of Mike Sneesby, who had successfully launched Stan in 2015 as a joint Nine–Fairfax venture before their merger.
There was no obviously correct choice. Janz had had little to do with TV; Sneesby was thin on the publishing side. Sneesby won out, and was revealed as Marks’s replacement at a press conference in Studio A of the company’s new headquarters in North Sydney in March 2021. To the outside world, Nine was flying; its market capitalisation had just passed $5 billion for the first time.
But the manoeuvrings on the board had continued. Two days before the announcement, deputy chair Falloon’s position was weakened by a damaging leak to the SMH. Falloon was facing an internal investigation over his son’s use of a corporate golf membership. Then, as Sneesby and Costello prepared for their first press conference together, a new piece from SMH columnist Elizabeth Knight highlighted what she described as “a fractured board.”
When I was able to get in the first question at the Studio A press conference I addressed it to Sneesby: “I read in the Sydney Morning Herald this morning that the board is currently ‘fractured’. I can’t think of many examples where a CEO has succeeded unless they’ve had the support of a united board, so I’m wondering what sort of support you hope to receive from the board of Nine?”
Costello jumped in. “I’ll answer that question. The board is not fractured, and the board is totally behind Mike Sneesby. This is a decision of the board and he will have every support of the board.”
Later in the twenty-two-minute press conference, Costello added: “I want to make this clear. There is only one corporation here. It’s the Nine Entertainment Corporation. Every person is a director of that corporation. There aren’t two corporations. There’s one corporation and we all owe our obligations to the shareholders of that corporation as directors of the board and of course to the employees.”
Even Falloon’s retirement from the board a year later, effectively ending the Fairfax era, didn’t remove all the divisions. But they did go quiet.
For the next three years, the only thing approaching a significant strategic move by Sneesby and his board was to sign a long-term rights deal for the Olympics. Rumblings suggested that Sneesby wanted Nine to buy an outdoor advertising company but was unable to convince the board. Otherwise, it felt as though the company was treading water. There were no more big transformative deals.
Sneesby’s timing in taking on the new job had initially seemed perfect. The publishing operation’s profitability had been boosted by the big licencing deals extracted from Google and Facebook in 2021. And the Covid lockdowns had created a captive TV audience in what proved to be free-to-air televisions’s final hurrah.
By 2023 though, gravity began to kick in. TV audiences began to fall, particularly among the young. As the cost of living started rising, nervous marketers dialled back and Australia went into an advertising recession.
Free-to-air television bore the brunt of it. In most months the TV advertising market was more than 10 per cent lower than in the previous year. It was reminiscent of the terrible numbers newspapers had seen during their existential crisis a decade earlier.
Nine’s share price began to sink. Having hit an all-time high in November 2021, it lost a third of its value over the next six months as the market factored in the coming advertising recession. Then, early in 2024, the market began to realise that even as advertising recovered, the money was not coming back into television. It was going to the global platforms. The problem wasn’t just cyclical — it was structural.
To add to the pain, Netflix, Amazon’s Prime and Paramount Plus all announced they were launching their own advertising tiers, creating more direct competitors for television.
Nine’s share price began to fall some more. By April, it had halved from its $5 billion peak. This week the company’s market cap fell to $2.2 billion, the lowest point since the share market crashed at the beginning of Covid in March 2020.
Unhappy shareholders mean embattled boards and nervous executives. Last month, a sharemarket problem became a boardroom crisis when Darren Wick’s departure opened up what eventually became a flood of allegations about his behaviour.
News Corp titles did much of the initial running, with reporting across Sky News, the Australian and then, decisively, the Daily Telegraph, which splashed with “Nine’s Wicked Ways.”
Belatedly, the SMH joined the chase with Kate McClymont — whose #MeToo stories tend to stand up when others fall over in defamation cases — weighing in with a piece headlined “Former Nine News Boss Darren Wick Accused By Staff of Drunken, Lecherous Behaviour.”
Damagingly for Nine, the coverage alleged that management had been aware of staff complaints about Wick’s alleged behaviour but not acted on them. Worse, the Australian reported claims that staff who reached settlements with Nine were required to sign non-disclosure agreements, or NDAs.
Sneesby’s email to staff resorted to tortured language as he tried to distance himself from the scandal. “As CEO at Nine,” he wrote, “I have never signed any NDAs for any employee relating to a complaint or behavioural issue. In particular, I did not sign any NDAs with Nine staff in relation to Darren Wick’s alleged behaviour.”
As Crikey put it: “Which is so far from being definitive it’s not funny. Of course Sneesby hasn’t signed any NDAs. He’s only been CEO since mid-2021. And why would a CEO sign an NDA? That’s wholly unnecessary — the head of the legal department or the head of HR, at best, might sign it. Whose signature adorns the gagging mechanism is irrelevant — it’s whether it exists that is the problem.”
Next came news of complaints about a friend of Sneesby, Adrian Foo, who headed publicity at Stan. According to the Australian Financial Review, Foo was able to take a $150,000 redundancy payout and leave before the complaints could be investigated.
When Nine announced an external investigation into the issues around newsroom culture it appeared to have won a little breathing space. But then came last week’s disastrous confrontation at Canberra Airport between Costello and the Australian’s Liam Mendes. As Mendes peppered him with questions, Costello appeared to barge him to the ground. Mendes captured the moment on his phone and on a GoPro video camera.
Soon there was more tortured language from Nine: “In the course of filming the chairman while walking backwards, the journalist collided with an advertising placard and fell. At no point did the chairman strike the journalist.”
But from the moment the footage went live last Thursday night, it was clear Costello would have to resign. The boss of a company that employs journalists cannot be in the business of knocking them to the ground, no matter how irritating they are.
Costello lasted until Sunday night. For a second time, News Corp had taken down a Nine boss.
The result was a battlefield promotion for deputy chair Catherine West — at least for now. West was reportedly one of Nine’s directors who were made aware of concerns in 2019. And this week Capital Brief reported that West had “pressured” the SMH to amend Elizabeth Knight’s 2020 reporting on board divisions — a bad look for a company that publishes under the slogan “Independent. Always.”
Nine is in a bad way. An under-pressure CEO and chair. A TV market in structural decline. A three-year deal with Facebook coming to an end. The company’s next financial update to the market in August will be a brutal one.
The crisis is far from over. •
