Mr Ambitious – Has CEO James Warburton got what it takes to turn around Ten?
With a history of turning around struggling companies and a reputation for ambition. Ten CEO James Warburton is not afraid of a challenge. Brooke Hemphill asks if he’s the man to revive the struggling network.
“I’ve always wanted to be a CEO by the time I’m 40,” a young James Warburton told Allan Medforth, his onetime boss who he worked closely with at Universal McCann in the early 2000s. Warburton was at Channel Seven when he made the statement, in the role of chief sales officer, but it was not the first time he had spoken to Medforth about his career plans.
The comment couldn’t be far from his mind now that he sits in the big chair at Ten, two years after his 40th birthday. Nine months into the role, he might be wondering if he’s bitten off more than he can chew.
After cutting his teeth agency-side as a media executive at McCann-Erickson in the 1980s, and spending time in a similar role at DDB, Warburton was the GM of marketing at carmaker Hyundai when he approached Medforth for a senior position at Universal McCann. “I hear you’re looking for a new country manager,” Warburton told Medforth. Both had worked for McCann-Erickson but had not met as their times at the company did not intersect. “I needed someone that had a bit of marketing experience and he actually fit the bill,” says Medforth.
In 1997 Warburton’s move to take on the role at Hyundai may have surprised some due to a lack of pure marketing jobs on his resume but the strategic move paid off. In 2000 he returned to Universal McCann and was appointed MD by Mark Buckman, then chairman of McCann Worldgroup, and now Telstra’s chief marketing officer. Buckman says: “His candidacy was without rival as he demonstrated all the qualities I was looking for in the next generation of leaders for the business.” Warburton was tasked with restructuring the under-performing company. Media analyst Steve Allen, who has had a relationship with Warburton since his time at DDB when Allen was at competitor AIS Media, and who considers him as an “industry friend”, says: “UM practically didn’t count when he went there.”
“In his first 12 months in the role, he moved the business in Australia from $400m to $600m in billings,” says Medforth. “The first 12 months he settled down the clients. The following 12 months he went out and won some huge business.” His wins included the federal government, and Coles Myer, a $180m account, the largest piece of media business in Australia at the time, held previously by Zenith for more than 15 years. But the government account caused the most headlines as McCann nabbed it from media buying heavyweight Harold Mitchell’s agency. Mitchell lashed out, calling Warburton an arsehole. Mitchell, who later wrote about the incident in his biography, now tells Encore: “He is very numerate. He is very engaging. He is very calm and he has been enormously successful.” Despite Mitchell’s later platitudes, at the time, he took to calling Warburton ‘little Jimmy big mouth’ in the trade press and Allen recalls there was much talk of the company being “bloody discounters”. This would later be revealed to be false.
“It was nothing about discounting and margins. The contract he’d drawn up was very beneficial to Universal McCann,” says Allen. The key to Warburton’s success wasn’t just winning new business. “He didn’t lose one client in that whole period,” says Medforth.
In 2003, Warburton joined the Seven Network as sales director. Again, it was Medforth he told of his plans as he resigned his position at UM. “He essentially had grown the business at Universal McCann to a point that there really wasn’t anything else for him to do,” says Medforth. But the going was tough at Seven in the early days. “When he first started, he was the new kid on the block because the sales directors at Ten and Nine, Grant Blackley and Vance Lothringer, had been there for an awful lot of time,” says Medforth. Media agency GroupM’s James Parkinson bought media from Warburton and says: “He had a strong team underneath him and had the benefit of added assets in the group which were nimble.”
By the time he left Seven, he was the most experienced of all the sales directors. Those in the industry say it was no secret that Warburton wanted a wider remit than sales. Parkinson says: “He may have been a bit bored.” He was considered the natural successor to Seven CEO David Leckie, but there was a question of how long he would have to wait for the big job.
The announcement of Warburton’s defection to Ten in March 2011, therefore, was not a complete surprise. He was due to start in July but Seven quickly announced that there were “contractual commitments” that could delay his start. In May, the supreme court ruled Warburton would have to wait until 2012. Court documents show much of the case hinged on a conversation between Leckie and Warburton where the CEO labelled Warburton “Mr Ambitious” and the judge commented that like Caesar, “Mr Leckie was not ready to go”. Had Warburton stayed at Seven for a few more months, it might have been a different story. In December 2011 Leckie passed the TV mantle to Tim Worner. A month later, Warburton started at Ten, with a reported base salary of $2.2 million which could increase to $4.4 million a year with bonuses. He has made several key hires including Tony McMaster in the role of chief marketing officer and Barry O’Brien as chief sales officer. Network head of publicity, Jo’an Papadopoulos, was let go and Russel Howcroft, previously CEO of Y&R Brands will join the network as executive GM next year. Also starting in January is Louise Barrett, currently at ACP, who will take on the role of national sales director. But the biggest news was chief programming officer David Mott’s exit in August off the back of a series of flops, the most embarrassing of which Everybody Dance Now, a show rumoured to have cost in excess of $10m. Also failing to fire were locally produced programs The Shire and I Will Survive leaving Ten languishing with a nightly channel share around 10 per cent in the free to air race for the 6pm to midnight timeslot, well behind Seven and Nine. The failed programs dealt a blow to Ten’s new CEO but it could be argued his influence is yet to be felt on the line up as the current round of misses were in the works before he started. It could also be asked just how much influence the CEO should have on programming in the first place.
There are two schools of thought on the future of Ten with Warburton at the helm. The first being that just one hit can turn the network around. The second that it will take several years to right the ship. Despite Ten’s current poor ratings performance, and the share price almost halving since January, the consensus is that Warburton is the man for the job, demonstrated by his past successes, particularly at Seven.
“Seven hasn’t missed a beat since he left,” says Allen. “If you were an egomaniac and a control freak, you don’t leave a company that continues on without you. You leave a company that’s in disarray because you’re the only person that can fix everything.”
Parkinson says: “He’s a fighter. In that job, you need the skills and expertise to understand long-term trends. My gut is he wanted a big job arguably today it probably seems a bigger job than when decisions were made. He won’t be bored now.”
- This article first appeared in the November edition of Encore magazine. Download the iPad edition, now free.