Mike Sneesby’s elevation in focus: What’s next for Nine, Stan, and Janz

After a four month hiring process, Mike Sneesby is Nine's new CEO. Here, Mumbrella's Brittney Rigby unpacks what his departure from Stan means for the streaming business, whether there's any substance to reports of a fractious board, and why Sneesby's first big challenge will be getting his competitor applicants to stick around.

For the past seven and a half years, Mike Sneesby has led one of Netflix’s strongest competitors. On 1 April, the CEO of the $1 billion Stan will be elevated to CEO of the $5 billion Nine, and his remit will expand significantly, stretching across the unfamiliar (to him) publishing, free-to-air, and radio businesses.

Sneesby’s soon-to-be predecessor, Hugh Marks, is in hospital; he didn’t attend the media announcement this morning, held at Nine’s new North Sydney headquarters and immediately following Sneesby’s promotion appearing on the stock exchange.

Chair Peter Costello, who appeared at the event alongside Sneesby, confirmed Marks was hospitalised for an infection a number of days ago, for which he has been undergoing tests. But “I don’t want you to think it’s life threatening, or anything like that”.

Sneesby at this morning’s announcement

When Marks resigned after a five year run, following the revelation he was in a relationship with a former key executive, reports of internal board friction began to emerge. Those rumblings became much louder this week, when Nine’s own newspapers broke the story of an investigation into deputy chair Nick Falloon over the alleged misuse of a corporate golf membership. A day later, Patrick Allaway tendered his resignation, and Mickie Rosen was also reportedly considering her resignation.

With Falloon, Allaway, and Rosen the three Fairfax imports, the publishing arm’s influence in the Nine boardroom could be about to considerably shrink.

‘Sorry to spoil the party’: Costello’s assurance the ‘board is not fractured’

Costello batted away the reports out of Nine’s own The Sydney Morning Herald and The Age. Regarding the Falloon investigation, he told journalists that he’s “not commenting on any of that sort of speculation”, and said it was always Allaway’s plan to step down once he became chair of the Bank of Queensland.

“I know you said another one is understood to be standing down. I’ve spoken to that board member. According to that board member, they don’t have that understanding,” he continued. “As far as I’m aware, that [the claim Rosen is considering resigning] is not true.”

A follow up question persisted. With three members of his six-person board allegedly considering resigning, actually resigning, or being investigated, is Costello really asserting there isn’t friction?

“Absolutely I am … [The] board is not fractured. And the board is totally behind Mike Sneesby. This was a decision of the board, and he will have every support of the board.

“I want to make this clear. There’s only one corporation here. It’s the Nine Entertainment Corporation. Every person is a director of that corporation. There aren’t two corporations.

“Far be it from me to criticise reports in the media, because we’re a media company, but that is where things are.”

Costello and Sneesby

Sneesby beat out some tough competition for the job – including the final contenders, chief digital and publishing officer Chris Janz, and Endemol Shine’s former co-chief, Carl Fennessy – which led to another question for the chair: Was the board split down the middle on who the new leader should be?

“No. No. Sorry to spoil the party, but no.”

Janz, Fennessy, and others: The unsuccessful candidates

In addition to Sneesby and Janz, multiple internal executives, including chief sales officer Michael Stephenson and managing director of group marketing and local markets Lizzie Young, “immediately … expressed interest in the position”. And, according to Costello, they “would have been qualified for it”. But Sneesby was the clear choice.

“To have a plethora of candidates was great. We had a search, we looked at international candidates, we looked at people from different areas. It was a very exhaustive process,” Costello said. “In the board’s view and in my view, the best candidate has been appointed.

“All of our people, all of the internal candidates, and some external ones, I think could have done the job. I don’t want to reflect on them in the slightest. They all brought strengths to the table and I think all would have done a good job.”

But Costello noted that Sneesby’s advantage was “the performance of Stan”, musing: “If this were a company in America, they’d call it a unicorn. A startup that’s valued at a billion dollars. There aren’t that many of those in Australia, so it has been a great success. It is Australia’s predominant streaming service. It competes against behemoths like Netflix.” Last week, Stan recorded a 161% year-on-year uplift in earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $36.5 million. Its revenue for the half year jumped 28% to $149.1 million, driven by 2.3 million active subscribers.

One of Sneesby’s biggest, and earliest, challenges will be ensuring the unsuccessful key executives – Janz, Stephenson, and Young – don’t go looking for big jobs elsewhere.

“I want to say that all of the candidates, and I’m not going into their names, who joined this process are very valuable members of this team,” Costello said about the potential for those execs to leave.

“And we value their contribution and we would like them all to be with us on this journey. That’s our view, and I hope that comes to pass.”

The future of Nine (and Stan)

Between now and 1 April, Sneesby will spend time “to really understand the organisation, but also to work closely with the board to set those objectives”.

“I clearly have a view on that, but I think it would be too early for me to be out here shooting off a view on what I think the priorities are,” he said.

Sneesby could commit to installing a new boss at Stan, though, confirming that “as a result of this change for me, we will open up a process for a new chief executive”.

“The Stan business has a very strong executive team who have worked with me in operating that business over the years. So I have every confidence in that executive group in running the business.”

While the executive will now have to apply what he’s learned at the streaming platform to the country’s biggest locally-owned media company, his experience attracting and retaining subscribers will be critical. Costello noted that “it is our objective, by 2024, to have more than 35% of group revenues from subscription … That’s what we’re aiming towards. We are well on our way. We will meet that objective.”

The incoming CEO also called his outgoing counterpart, Marks, a “phenomenal driver of the success of this business over the years”. Just before being hospitalised, Marks delivered the company’s half year results last Thursday – Costello remarked it was always the intention for Marks to do so, before his successor was announced – which saw net profit skyrocket 79% to $182 million. In response, the share price jumped to a record-high and the business’ market capitalisation was pushed above the $5 billion mark for the first time since becoming a listed company.

The market was impressed by Sneesby’s appointment too. The share price surged again, this time to a new record-high of $3.07, while PwC’s CMO Advisory partner, Justin Papps, called it a “great appointment from Nine”.

“Mike has done a great job with Stan and made it into a highly innovative and competitive OTT [over the top media] service,” he said.

“When the global Netflix boss says you are one of the competitors they are most concerned about, you must be doing something right.”

Sneesby, who grew up in Jervis Bay on the New South Wales south coast, has established a reputation as an executive who keeps his head down and gets the job done. He’s rarely wheeled out for media interviews. His responses are short, but considered. And he’s proud to have now earned his place at the top of one of Australia’s most dominant, most successful media companies.

“Every piece of this organisation, thousands of people across Nine, have been involved in getting us to where we are today and I’m extremely proud to be taking on this role,” he said.

“My media career has primarily been in and around the Fairfax and Nine businesses over the years, prior to the merger.

“So to be in this position today, to be able to work alongside the people that I’ve loved working with for many years, it really is a true honour.”


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