Features

Bauer CEO Paul Dykzeul: We’re not in trouble, we’re adjusting

Over the last few months, Bauer Media has seen the departure of CEO Nick Chan, a major defamation lawsuit loss and the absorption of BauerWorks. So where is the company headed? Mumbrella's Zoe Samios interviewed new CEO Paul Dykzeul to discuss his plans, the future of publishing, and why the Bauer family won't sell.

Bauer Media’s new CEO Paul Dykzeul doesn’t care if people think he’s a “prick”. Instead, he says he’s passionate, knows what he is doing, and is here to change the business model.

The former Bauer New Zealand CEO, who joined the Australian arm in late June after the abrupt departure of Nick Chan, tells Mumbrella he hasn’t come to Australia to “manage the status quo”, but instead intends to implement change and “future-proof” the business.

New CEO Paul Dykzeul is ‘here to change things’

“This business is not in trouble, it’s just having some difficulties, and this is an adjustment process, and it’s going to make the business a hell of a lot better as a result of the adjustments we are making,” he says.

The comments follow Bauer Media’s first major changes under the new CEO last Friday – which included a reshuffle to the publisher’s executive line-up and the closure of custom publishing arm, BauerWorks.

It came the same week Bauer Media was told to pay Australian celebrity Rebel Wilson $4.5m in damages, and German executive and interim CEO prior to Chan, Andreas Schoo left the business.

While Dykzeul admits Friday’s announcement – which sees the removal of two publishers and the promotion of Fiorella di Santo – would lead to some redundancies, making the business more “viable long term” is his focus.

“I’m not here to manage the status quo, I’m here to change things, and that’s what I’ve been pretty successful at over the years and that’s why I am here,” he says.

“I don’t care what people say about me, I know what I’m doing, I know what I want to do, I am very passionate about it, and I’m very single-minded about it.

“If people think I’m a prick, if people think I’m an asshole, that’s fine. I can’t do anything about that.”

Di Santo has been promoted to general manager, publishing, across fashion, luxury, food and home categories.

According to Dykzeul, the Bauer family want the business they are “passionate about” to do better, before they take their next step.

He insists the company will do better going forward.

“You have to make your companies more efficient and no one likes making people redundant,” he says.

He also takes a swipe at previous management: “Inevitably the redundancies are never the fault of the individuals, it is management’s fault and either management hasn’t acted, or management hasn’t changed the business that doesn’t allow that to happen. 

“There’s some hard stuff that needs to be done, and it will be done,” he says.

“I’m really sorry about that.”

Publishing re-structure and the absorption of BauerWorks

The major changes, which were announced on Friday, not only included the absorption of BauerWorks into parts of the company, but also saw the departure of BauerWorks’ executive general manager Eugene Varricchio, who had been with the company for 17 years.

Varricchio has left the company after 17 years

Varricchio’s departure followed several others, including Fiona Legdin, Bauer’s general manager for fashion, health and beauty, who left the company after nine months.

Other departures included BauerWorks’ Cat Bowe, who left the company after five months, and Kim Doherty, who left her role as editor-in-chief of the Australian Women’s Weekly.

Dykzeul denies culture as a reason for the most recent departures.

In the case of Legdin, Dykzeul says her departure was part of his remit, and was about “re-aligning the business.”

As a result of the changes, publishing will now be led by two general managers – former director of sales, Fiorella Di Santo, and Jayne Ferguson – who maintains her title.

“We had four publishing structures. We can’t sustain four publishing structures and we don’t need them,” he says.

However he notes with the consolidation of roles, editors will have more influence on the business.

“They are responsible and will be responsible for every aspect of the business,” he says.

Jayne Ferguson maintains her role as general manager of women’s entertainment & lifestyle

Dykzeul says Di Santo “really impressed him” from the time he joined.

“Yes, she doesn’t have a classic editorial background, but there’s enough people around her, including myself who do come from an editorial background who can assist her in that area,” he says.

“Fiorella will bring a new, fresh, look and a commercial focus to our fashion area, our home area and to our food area, and I think that’s a really important strategic development that we need to take.”

He says the purpose of the new structure is to “tighten” the team and make it more focused.

“This is not about me and my strategy, this is about me developing a strategy with the editorial teams, with the editors, with the business to take it into the future,” he says.

“By the very nature of the fact you have two publishers, you group titles together. Those teams will work more closely together to get better outcomes, and to get better efficiencies.”

“Yes where there is duplication and yes where we can make savings, we are going to make them.”

Commenting on the absorption of the BauerWorks business, Dykzeul was transparent, telling Mumbrella the company simply couldn’t sustain a standalone content unit.

BauerWorks has been absorbed into other areas of the business

As he sees it, the digital part of the business presents a bigger opportunity.

“I am pushing parts of that into other parts of the business. The big opportunity for us primarily in that space in my view is digital.

“Our digital teams are growing, our digital business is growing, so the digital side of the business will pick up a lot of the opportunities going forward in terms of contract publishing,” he says.

Publishers shouldn’t tell editors what to do

While some would question Dykzeul’s choice for Di Santo as publisher given her background in sales, he believes the role of a publisher should be to lead editors, which he believes she can do.

“Publishers shouldn’t tell editors what to do, they should be there to guide them and work with them,” he says.

“Magazines and newspapers have a great future, they have a very important social future, but for both newspaper and magazine companies, the model under which they operate doesn’t work anymore.

“The days of where those editors could say ‘If only those buggers in ad sales could sell some ads we’d be all right’, that’s all over.”

As part of the changes, Dykzeul says Ferguson and Di Santo, along with editors and editorial teams, will decide on further redundancies, to ensure transparency.

“Yes there will be people going. My sense is it is not big numbers, it’s more just little adjustments. That doesn’t help if you are one of the numbers, I know that, but you have to do it.”

The Bauers

Over the last year, there has been speculation about how much influence the German-based Bauer family has on its Australian business.

With the departure of Dykzeul’s boss Schoo this week, the relationship between Dykzeul and publisher Yvonne Bauer has become more direct. He confirms she actively involved in the business.

Yvonne Bauer a “remarkable young woman” according to Dykzeul

“I report directly through to Ms Bauer, who is a very interesting person. She’s remarkable a young woman,” he says. “[The Bauers] are tough because they are owners and they bloody well should be.”

“I talk to her every week. I don’t ring her and ask for instructions, I ring her and talk to her and tell her what I’m doing.”

Dykzeul asserts the family wants the same outcomes for the global company as they do in the Australian market.

“We all have disagreements with how those things will be done, but often that’s a disagreement between Australian personalities versus German personalities, or the way an Australian company runs versus the way a German company runs. But they love Australia.”

Will Bauer Media go up for sale?

Less than a year ago, Seven West Media said it was open to offers for its publishing arm, Pacific Magazines, after it emerged Bauer Media had expressed interest of acquisition.

Seven West Media’s latest financial results reported Pacific Magazines annual revenue was to $168m, down from FY16’s $201.2 (-16.5%), and EBIT fell 61.5% from $9m to $3m.

Asked whether there was still space for three major magazine publishers in Australia – Bauer Media, Pacific Magazines, and NewsLifeMedia – Dykzeul is confident there is still room, but he is open to consolidation, especially given the recent passing of the media reforms bill in the Senate.

“Are those opportunities there? I haven’t had my feet under the table long enough to be honest. But I can tell you that it’s something I’d be very interested in.”

Consolidation something Dykzeul is interested in

But he is adamant the Bauer family will not sell their Australian business.

“Bauer never sell things. They don’t like selling things, and they are acquirers. They passionately believe they can fix things up.

“Of course bits get sold, we have sold bits, but that’s usually because they strategically don’t fit with what they’re doing.”

He adds the Bauer family will not sell any core assets, like the Australian Women’s Weekly.

However, he finds it unusual how publishing companies across Australia, New Zealand and Britain are always reluctant to close things, and perceive closure as failure.

“The way the business needs to go, and I believe it really needs to go, is launch fast, fail fast. If it doesn’t work, no embarrassment, just get on with it,” he says.

“That’s part of the development of the business that I really want to drive and generate. A really creative culture and a culture of being really really proud of what I do.”

Departure from the AMAA

Late last year, Bauer Media, alongside Pacific Magazines and NewsLifeMedia, withdrew from the Audited Media Association of Australia.

Dykzeul says the mistake in the process was failing to effectively talk about audiences with clients and agencies.

Dykzeul doesn’t believe readership is the solution, despite Bauer pulling out of the AMAA last year

From his perspective, audiences are getting information in different ways, and the publishing industry has been slow at accurately measuring these changes for agencies and clients.

“Every publishing company in the world is going to be struggling to get more circulation, it’s not going to be struggling to get more audience.

“It will get more audience through different platforms, what it needs to do is find a way of measuring that in a way that says ‘oh this is not just about how many times someone has picked a magazine up.’

“Jesus. Some of this stuff is just abject nonsense.”

The future of the magazine industry and Bauer Media

While the industry is quick to pass the judgement ‘print is dead’, Dykzeul does not believe the forecast for magazines in Australia is “death” – he sees it as “being different.”

“Imagine a world where the only news we could get was from television. God forbid, close your eyes and imagine that for a minute,” he says.

He criticises the media industry for continuing to beat each other up: “How fucking stupid is that, how crazy is that, when every part of the media is battling, when every part of the media is struggling with a level of credibility.

“This propensity to have a go at each other is just laughable. It’s unbelievably sad in my view.”

Asked about his vision for Bauer specifically, Dykzeul says: “What I want is a strong vibrant publishing culture, I want an environment where people love and enjoy what they’re doing and I really believe that there are massive growth opportunities, and perhaps not in the traditionally sense of the word we have.

“There are very strong prospects going forward for the business, and that might mean in other platforms, that’s what we have to get the business to.

“It’s not going to stay the same, it has to change, and we need to change the business.”

Want to find out more about reinventing the publishing model? Buy tickets to Mumbrella’s Publish Conference to find out how publishers can tap into new revenue streams. 

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