As Cam Wallace walked into MediaWorks’ flash new Auckland offices some three months ago, he would have welcomed the optimistic atmosphere after the chaos that Covid-19 wreaked at his previous employer – Air New Zealand.
No builder’s report could have prepared him for the rot that lingered beneath the surface of the colourful accent wall, high ceilings and expansive floors of the Hargreaves St headquarters.
However, it didn’t take long for the unseen issues to reveal themselves.
It began with stand-in Magic Talk presenter John Banks delivering an acidic comment about Māori coming “through your bathroom window”. It wasn’t the first time Banks had offered this narrative, but this time it spread to social media, and within hours major advertisers had pulled their money from the show.
Speaking to the Herald this week, Wallace rejects the notion that MediaWorks only pulled the show because of the advertising exodus.
“I was in an Uber around five minutes from Hargreaves St when I saw the social media activity being uploaded,” he recalls.
“As soon as I got back to the office there was a meeting taking place and we had made that decision within 35 minutes. It wasn’t a very difficult decision. It was abhorrent and embarrassing for the people who work here at the brand.
“Even if those advertisers didn’t pull a cent from that channel, we still would have made the same decision. You’ve got to make the right decision because of the values and culture you want to breed in an organisation, not because someone is saying they might pull $10,000.”
Shortly thereafter, MediaWorks also parted ways with controversial broadcaster Sean Plunket, who only a few months earlier had been censured by the Broadcasting Standards Authority for amplifying negative stereotypes about Māori.
Wallace won’t comment on the specifics of Plunket’s departure, but sources have suggested his resignation was accompanied by the exchange of a six-figure sum.
“Sean made the decision to resign, we supported that decision and moved in a different direction,” says Wallace, explaining that MediaWorks has introduced a new host to the show.
Asked whether Plunket may have been on the air too long, Wallace chooses his words carefully, stopping short of outright criticism.
“That’s a good question,” the MediaWorks boss begins. “I hadn’t considered that. But my view is that you do need to have different stations focusing on different market segments and you can get a bit tied up in social media feedback.
“My view is that New Zealand, as a society, is changing and we need to move and change with it. That doesn’t mean we want to be a hard-left talk news station. It just means we’ve got to be respectful of views and have an open and robust exchange of ideas.”
How Magic Talk fits into that objective is yet to be determined, but MediaWorks is undertaking an extensive review to find an answer to that question.
“We are looking into how we move forward in that segment. It will probably be something different and it might be another station. It might be two more stations. We are still looking into how we reposition that brand.”
Wallace says further details on the station’s future will be released in two to four months as part of a broader strategic overview of the MediaWorks business, which spans radio and outdoor media properties.
Wallace’s swift action at Magic Talk at first appeared to have isolated the underlying issues to a single smaller brand within one of the country’s largest media companies. But it would soon become apparent that there were wider issues.
Social media once again served as the change agent, as an anonymous Instagram account started detailing accounts of bullying, sexual harassment and a toxic work environment at a major New Zealand media company.
The industry is small and it didn’t take long to connect the dots, and the potential impact on MediaWorks’ brands, which include The Edge, The Rock, More FM and Mai FM.
In much the same way that he addressed the Magic Talk issue head-on, Wallace has again decided to take swift action on the allegations.
High-profile hosts have been taken off the air, other staffers have been stood down and Wallace called in Queen’s Counsel Maria Dew to conduct an independent review of the culture at the business.
The review will go beyond the present context, with Dew instructed to extend her investigation to the past three years at the business. Staff will be asked to share their experiences over this period and these stories will ultimately feed into the recommendations put before the MediaWorks executive team.
“We’re taking it very seriously,” says Wallace. “We’re spending a lot of money on it and we’re making sure we don’t sweep it under the carpet.
“I’m committed to making sure MediaWorks is a fantastic commercial entity, but, just as importantly, that people feel safe, secure and proud of working here.”
Wallace tells the Herald he has no knowledge of any matters being handed over to the authorities historically, but he has no qualms about changing that should the internal investigation reveal criminal behaviour.
“If stuff comes up that needs to be referred to the police, then we will refer it to the police if that’s the appropriate vehicle,” he says.
While the spread of issues across a number of brands suggests a wider cultural issue, Wallace says he expects the review to show “pockets of bad behaviour” rather than a “laundry list of problems”.
Although some of these revelations have only now reached public consciousness, they’ve long been whispered around media circles.
The timing of the revelations might seem less than ideal for the new boss, but in many ways, a new CEO could be the best person to make the necessary changes. Wallace’s legacy isn’t tethered to the culture that has been built at the business over the past decade.
Despite the challenges that were waiting for him, Wallace doesn’t yet have any regrets about taking on what is shaping up to be one of the toughest jobs in NZ media.
“You go into an organisation expecting there will be a whole bunch of unknowns. You know, I never knew that when I came into MediaWorks, we’d have X, Y and Z at issue, but the reality is that this is a great challenge,” he says.
“I think this is going to be a fantastic place to work. And I know that people in the next 12 to 18 months are going to be really proud to say they work for MediaWorks.
“We’ve got pockets of issues that we’re dealing with. We’re not hiding from them, we’re not sweeping them under the carpet. We’re really leaning into them.”
IPO on the horizon?
As well as its cultural issues, at MediaWorks there will also be a few important commercial imperatives to sort out for Wallace, who in his old job was responsible for maintaining Air New Zealand’s revenue of $6 billion a year, pre-Covid.
Speculation out of Australia is that Oaktree Capital, MediaWorks’ 60 per cent owner, is looking into listing MediaWorks on the local stock exchange (the other 40 per cent is owned by outdoor advertising company QMS.)
Wallace tells the Herald that any talk of an IPO is “pure speculation” at this stage – and it won’t be his call in any case.
“An IPO or any capital changes are totally down to our shareholders,” he says.
“We’re not focused on one pathway at the moment. We have a number of options and once we have clarity on which way we’ll go, we’ll inform the market.”
If the speculation is true and the company is set on the path towards an IPO, it will be even more vital that Wallace solves any cultural issues that might give investors a reason not to invest in the company.
Asked whether he thinks investors would want to invest in MediaWorks, Wallace says: “With low interest rates at the moment, people are looking at where they can put their money for yields or returns. And people are usually attracted to brands or products that they know. I think it would be a strong investment but that’s a long way down the track.”
On a commercial level, the MediaWorks business does have good bones. The sale of the struggling television arm to multinational giant Discovery last year was important in enabling the company to clip off the part of the business that had long been bleeding money.
Today, MediaWorks is made up of the radio arm, which has long shown resilience to the changes in media, and the outdoor media section, which could present some interesting growth opportunities.
Figures from the Advertising Standards Authority show New Zealand companies spent about $280 million a year on radio advertising from 2014 to 2019. Covid-19 saw that drop to about $238m last year, but the industry remains in good shape thanks to its longstanding hold on loyal audiences.
Outdoor advertising grew from $83m in 2014 to $174m by 2019, before dropping back to $128m last year, largely due to the restrictions on movement. As the country moves out of the Covid era, outdoor advertising is likely to bounce back in the coming years.
While radio advertising makes up the lion’s share of MediaWorks’ revenue (roughly a 60-40 split), Wallace says he expects outdoor to overtake the radio arm in the coming years. This is also an area where Wallace sees the opportunity for a few commercial moves.
“The market structure [in outdoor] is not as well defined as radio, with three large players and then quite a few smaller ones,” he says.
“I think there’s opportunity in that space for all parties, but also some potential to acquire some market participants.”
The continued digitisation of billboards will also allow the major companies to extract further value out of their sites, and there is potential for outdoor companies to spread their reach further into regional New Zealand.
News junky without the news
Any acquisition ambitions at MediaWorks might not be limited to the outdoor sector. A self-confessed news junky, Wallace now finds himself in charge of a media business that doesn’t offer a dedicated news service.
The decision to sell the television arm led to the loss of the Newshub brand and its popular digital news site that been built from the ground up over the years.
If MediaWorks decides to fill that void, it will face the arduous choice of either building something new, or acquiring something that is already well established in the market.
“We’re considering our options in that space, but we haven’t made any final decisions,” Wallace says.
MediaWorks retains a relationship with Newshub, but Wallace says his team is working on the appropriate strategy for the next three to five years.
He notes that building something from scratch would be expensive and there are questions about whether it would deliver a return on the capital invested.
New Zealand has seen the emergence of a number of smaller, independent news organisations in recent years, such as The Spinoff and Newsroom. Picking up one of these established brands could offer a company like MediaWorks entry into the news market without having to do the groundwork, and would also help to break the existing dependence on the relationship with Discovery’s Newshub brand.
So is an acquisition of The Spinoff or Newsroom something Wallace would be interested in pursuing?
“They’ve both produced a lot of high-quality journalism, and we’re really interested to see what their future is and they’ll be part of the product set that we look at as we question whether we partner with them, but also whether they want to stay independent. And clearly, it’s got to be an agreement on both sides of the deal,” says Wallace.
“To be frank, coming into this role I’ve seen a lot more options than I would have anticipated in terms of coming into that news segment.”
In the age of global pandemic, Wallace was never going to have the privilege of comfortably easing into his new role. To use a suitably apt housing metaphor, he’s essentially traded a crumbling legacy villa for a hip student flat.
He now has his hands full chopping out the rotten floorboards, while also keeping an eye on the renovations he’s planning a little further down the line.
His tenure at the company may well be measured by how well he manages to do both those things.
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