04 May Southern Cross Media chair quits after investor revolt following Seven West Media merger

Source: The Australian

By: Joseph Carbone

Southern Cross Media executive chair Heith Mackay-Cruise has stepped down after less than three months in the role after the merger of Southern Cross Austereo and the Stokes family-controlled Seven West Media.

Mr Mackay-Cruise was widely reported as being on the outside looking in at the media player, being overlooked for the chief executive role, which went to former Seven West chief operating officer Rohan Lund.

Earlier reports cited sources as saying Mr Mackay-Cruise had made “disastrous” missteps and had visited Perth multiple times to shore up support from the Stokes’ power base, to no avail.

In an announcement to the market before trading opened on Monday, SCA said Mr Mackay-Cruise will step down on June 30. Teresa Dyson, a former Seven board member, will assume the role as chair from July 1.

Southern Cross Media said investment house Sandon Capital, as a significant investor holding more than 5 per cent, had lodged notices stating it intended to move motions at the next general meeting to remove Mr Mackay-Cruise and two other directors from their positions on the board.

“After almost six years on the board and more than two years as chairman of Southern Cross Media Group, I am proud to have overseen the restructuring of the company, combining with Seven West Media to create the largest commercial media platform that services all of Australia,” Mr Mackay-Cruise said.

“With the appointment of Rohan Lund as our new managing director and chief executive officer, I believe SCA is well-positioned for the future, and it is the right time for me to move on to other challenges.”

The $385m merger between the two players combined Seven’s television offerings with SCA’s radio operations, which include the Hit and Triple M networks and the LiSTNR platform. The January deal has endured a messy start, with the rival operations engaged in infighting which has already resulted in key departures.

Also causing ire was the fact SCA investors were denied the ability to vote on the merger.

Former Seven commercial director Bruce McWilliam was touted as a possible replacement for Mr Mackay-Cruise, after he snapped up almost $14m in shares in a series of purchases dating back to January. Mr McWilliam’s stake together with the 20 per cent stake held by Stokes listed vehicle SGH represents a 25 per cent holding of SCA.

After the news of Mr Mackay-Cruise stepping down, the SCA board has only one holdover from the old Southern Cross administration.

New CEO Mr Lund, in an internal memo obtained by The Australian, said the company needed to “reignite that spark” and “hustle for the revenue we deserve”.

“I can also see it hasn’t been easy. So much change, so many new pressures, so much uncertainty, and for many of you, that original excitement for the business has been buried under the daily grind,” he said.

“My goal is simple: I want to reignite that spark (the same spark that led us all to media in the first place!). I want to remind you why we do what we do, which has never been more important.

“What we do is humbling. We set the agenda for conversations at the breakfast table, in the car on the way to work, the cheeky banter with friends about our sports team on the weekend. We inform, we entertain, we inspire Australians every day – this is our North Star.

“We need to hustle for the revenue we deserve … we need to reset our costs quickly so we have the capacity to do what we do best.”

Prior to the merger, investors were promised $30m in savings would be realised through cost efficiencies.

On Mr Mackay-Cruise, Mr Lund’s memo said: “I want to pay special tribute to Heith Mackay-Cruise, who has decided he will step down as chair now that the merger is complete … Heith leaves with our gratitude for his stewardship of SCA for the last six years and for his work bringing these two great companies together.”

In February, the merged company posted a profit slump of 17 per cent to $34.7m.

The market on Monday morning reacted positively to the news, with Southern Cross Media shares trading 0.8 per cent higher to 60c.