MediaWorks boss given incentive to find a buyer
MediaWorks boss Cam Wallace has signed a potentially lucrative deal tied to his ability to find new owners for the radio and outdoor advertising business.
Accounts filed with the Companies Office show Wallace entered into a long-term incentive scheme in October 2021 entitling him to a share of any sale proceeds and the ability to buy shares of the company at a discounted rate.
The accounts record the value of these options — entitling Wallace to 1.5 per cent of any sale price excess above $175 million and the ability to buy 1.5 per cent of shares in the company for $300,000 — as presently being worth $2.2m.
MediaWorks poached Wallace from Air New Zealand in late 2020. He had worked for 19 years at the national airline and had risen to the position of chief commercial and customer officer.
A similar incentive scheme at the company netted former board members and executives — including controversial chief executive Mark Weldon — $8.7m in 2015 when private equity firm OakTree Capital increased its stake in the company from 41 to 78 per cent.
Shorn of its television stations, MediaWorks is today a radio and outdoor advertising business and operates a suite of commercial stations including Today, The Rock and The Edge.
The accounts to December 2021 show narrowed losses over the period, with advertising revenue up to $195m from $165m the year before.
Deteriorating conditions in the outdoor advertising market, largely blamed on Covid, led the company to book a $12m impairment on that side of its business.
The company metamorphosed in recent years after it finally sold its television business in late 2020, a $23.5m deal which involved United States giant Discovery entering the New Zealand market.
That move ended more than a decade of financial flux at the company after heavy debt loading and choppy industry conditions meant channels Three and Four regularly acted as a drain on earnings.
The deal was not costless, however, with the accounts showing restructuring costs at MediaWorks have totalled $11.4m over the past two years.
Debt issues, long a thorn in MediaWorks’ side, appear to now be on a more steady footing, with a new four-year, $140m syndication agreement struck with Westpac in December that has more than $30m in unused headroom.
MediaWorks and Discovery are now competitors.
That fact was vividly illustrated by court action this year that delayed the launch of MediaWorks’ Today breakfast radio show over claims that poached host Tova O’Brien — whose contract as Three political editor was inherited by Discovery — was subject to a restraint of trade.