Quick smart A
Australian director Rod McGeoch is driving the resurrection of former basketcase MediaWorks. As Matt Nippert discovers, he’s confident it will prove rewarding.
TANNED AND cocky, Rod McGeoch punches his open palm for emphasis, roars like a bull at his own jokes and strides around Auckland’s waterfront as if he could straddle the Tasman.
He modestly declares: ‘‘My wife says I’m the most competitive person in the world, and I might be – I don’t know.’’
The professional director who rose to prominence successfully spearheading Sydney’s bid for the 2000 Olympic Games, settles this question in the affirmative when later asked if he has any plans to slow down after recently reaching the qualifying age for a pension.
‘‘I’m still fit, I reckon I’d still win the father’s race if I ran it at school. I still run. I am 67, and I’m certainly not intending to stop.’’
A former director of Telecom and due to stand down in October after a dozen years on the board of SkyCity, Sydney-based McGeoch has managed to find yet another role to keep him regularly travelling to New Zealand.
Last year a consortium of banks and vulture funds, weary of playing banker to a regularly defaulting MediaWorks, pulled the pin and appointed receivers to engineer direct control of the broadcaster. It owns TV3, TV4 and a string of radio stations including The Edge and RadioLive.
McGeoch was the man they called to see what they could salvage from their $797 million in loans.
The company had become a financial basket-case in recent years, saddled the aforementioned debts, a stagnant advertising market and onerous content deals.
Nevertheless, McGeoch jumped at the chance last year to be chairman. ‘‘It’s an enormous challenge. Very satisfying if you’re able to do it,’’ he says.
Of course, he freely admits this sort of role — working for private bankers and fund managers — combines great difficulty with the possibility of great reward.
‘‘But you can also be remunerated, linked to success. Inside a public company these sorts of things are not acceptable. I quite enjoy that challenge.’’
McGeoch, who is involved with a number of private equity firms in Australia, is understandably positive about their influence on business — even where the industry is something out of their comfort zone.
‘‘What private equity has taught me is that bright fresh minds can sometimes do better than owners who have had the business for a long time. There is a message there about incumbency ultimately, possibly, clouding clarity. Whereas new money in, which is wanting a return bloody quick-smart, seems to get strategic change which is more often than not beneficial.’’
And what qualified the Australian for this challenge? The chairman admits his knowledge of broadcasting and journalism is ‘‘narrow, that’s for sure’’.
He cites his time at Telecom as a stepping stone, where discussions a decade ago of a triple-play internet-phone-television bundling led to him raising the possibility of the telecommunications giant bidding for the rights to screen the All Blacks.
Of course, Telecom under his watch didn’t buy the rights to the All Blacks. Or get into content. McGeoch freely admits having missed this trick.
‘‘We probably weren’t strong enough on that board in terms of thinking about the future — you’ve put me in the right box,’’ he says.
McGeoch says the reason he was picked to helm MediaWorks was more due to legal troubleshooting than technology forecasting. ‘‘I’d been chairman of a listed property company, I think they thought
‘My wife says I’m the most competitive person in the world, and I might be – I don’t know.’
there were certain legal property things where I could make a contribution.’’
These ‘‘legal property things’’ were multi-year output deals with heavyweight American studios such as NBC-Universal, CBS, Sony and Fox who provided the bulk of TV3 and TV4s programming.
‘‘I was given a consultants report,’’ he says. ‘‘It became the bible for a while as to what were the problems with MediaWorks, and it turned out to be substantially correct. And the Hollywood contracts were right there at the top,’’ he said.
McGeoch flew to Los Angeles with a trump card in his back pocket. MediaWorks’ receivership meant transferring contracts to the new bank-run iteration of the company was an entirely optional affair.
McGeoch is unapologetic at ripping up contracts. ‘‘I looked at the figures. Between 2008 and 2012 I think our revenue was off 15 per cent, and our costs were up 100 per cent. I said to them: ‘How long do you think we’re going to be buying your product?’ And they just didn’t want to know.’’
Most of the studios eventually renegotiated. McGeoch says ‘‘they weren’t entirely without common sense’’.
But Fox held out and abruptly yanked programming. ‘‘One can’t be too smug about this, because you just don’t know who’s going to have the last laugh.’’
He’s leaving the heavy lifting to