OPINION: In Western Australia, Kerry Stokes is nearly untouchable. Near authorities, the fourth-richest individual within the state and custodian of philanthropic big Telethon.
Mr Stokes‘ success began with TV antennas, then buying centres and he finally hit the massive time with the diversified main now referred to as SGH that he has handed on to his son, Ryan, to steward by way of what would be the founder’s twilight years.
It could possibly be mentioned he had the Midas contact when it got here to enterprise. Virtually.
When Mr Stokes took the stage at his remaining Seven West Media annual assembly, again in November, he forged that firm as a casualty of international digital giants and a regulatory framework unable to maintain tempo.
It was a place at odds with the assured picture he normally tasks.
The message was all too acquainted: world platforms have siphoned billions from Australian media; governments should intervene; native firms have to be shielded from the digital raiders.
It is a compelling narrative, however historical past complicates it. Some 16 years in the past, Mr Stokes made the very reverse argument when he got down to take management of the then-independent listed media participant West Australian Newspapers.
The 2008 shareholder pack distributed throughout that marketing campaign exhibits Mr Stokes and his lieutenant Peter Gammell positioning themselves because the pair uniquely outfitted to navigate the digital transition.
The prevailing WAN board, they argued, lacked the imaginative and prescient, technical literacy and urgency required in an trade being reshaped by on-line audiences and new promoting fashions.
The promise was express: Messrs Stokes and Gammell would arrest circulation decline, rebuild the core franchise, modernise digital operations and make investments for long-term development.
They argued that WAN had starved itself of sources and that solely new management with deep media expertise like theirs might restore efficiency. Their case rested on one declare: they understood the digital future higher than the incumbents.
It’s now attainable to evaluate that declare. In 2008, WAN’s share value traded between $10 and $17 on the peak of takeover hypothesis. Wanting again additional, it traded long-term at between $5 and $6 a share.
Within the weeks main as much as its Christmas eve ASX suspension, the merged Seven West Media entity (the mix of those self same WAN property and the Seven Community) traded at between 12 and 14 cents.
The autumn in shareholder worth is excessive. A hypothetical investor who purchased at $10 has seen roughly 98 per cent of their capital evaporate.
Dividends, as soon as a central justification for WAN’s conservative technique, have vanished. Minority shareholders, as one put it at this yr’s AGM, have been “handled with contempt”.
Digital disruption is the defining driver of that decline.
However it’s troublesome to reconcile Mr Stokes’ 2008 insistence that he had the roadmap for navigating this disruption with the fact of 2026.
The corporate that was imagined to be revitalised underneath his stewardship is now one of many Australian media sector’s most distressed companies.
The digital platforms Mr Stokes as soon as held up as exemplars at the moment are the villains of his narrative. The structural pressures he warned WAN to organize for weren’t meaningfully offset by investments.
This doesn’t diminish the severity of the worldwide forces going through conventional media. Nor does it recommend that WAN’s earlier board would have fared higher. But it surely does underscore a vital level: Mr Stokes sought management of WAN on the premise that he and Mr Gammell knew easy methods to handle the transition higher than anybody else.
The outcomes at the moment are plain. The turnaround by no means got here. The technique didn’t outrun the disruption. The Yahoo7 three way partnership was a dud. And the shareholders who backed the promise of renewal have absorbed one of the vital vital worth destructions in fashionable Australian media historical past.
Examine that with the efficiency of 9, which has confronted precisely the identical headwinds. 9 constructed Stan, which is now value someplace within the vary of $700m to $1.2b.
9 additionally merged with Fairfax, which constructed on-line actual property portal Area and floated it. 9’s remaining Area shares have been bought in October for about $1.4b, nearly all of which was paid to shareholders as a particular dividend.
The separate 9 and Fairfax companies have been value round $5b in 2013. The merged companies now has a market capitalisation of $1.75b. That is not an important outcome, however SWM’s numbers make it look distinctive.
SWM, in the meantime, purchased Information Corp out of its holding in Neighborhood Newspaper Group. And it purchased the Sunday Instances, successfully tripling down on newspapers.
It then purchased Prime Media Group, which held regional TV licences. And, in 2024, it began The Nightly, a digital-only newspaper aimed toward Japanese States audiences.
SWM’s share value is about one twentieth of what it was a decade in the past.
Mr Stokes now leaves Seven West Media with a well-recognized name for presidency safety. In hindsight, WAN shareholders ought to have sought safety from the Seven raiders again in 2008.
Some, just like the institutional shareholders who sided with Messrs Stokes and Gammell and gave them the management they sought, have no one however themselves in charge. However spare a thought for the shareholder who requested a query of Mr Stokes on the current AGM.
A retiree, he spent $1m shopping for up 200,000 shares that at the moment are value simply $24,000. He was virtually begging for the reinstatement of a dividend, even when it was solely half-a-cent per share.
Mr Stokes‘ response? “I’ve had no dividends both. So I’m sympathetic to shareholders.”
The AGM was amongst Mr Stokes‘ final duties in his capability as SWM chair. The corporate’s impending merger with Southern Cross Media Group is slated for completion this week and can mark the tip of his tenure within the function.
The Stokes household will retain round 20 per cent of the enlarged firm, and Mr Stokes intends to stay near the post-merger Southern Cross Media Group as a particular adviser to its board.
- The creator labored for The West Australian from 1998-2012 and nonetheless holds a small parcel of employee-scheme-issued shares in SWM.
