The substance behind the Photon gossip

One of the perks – and frustrations – of being a journalist is that you often get to hear interesting gossip.  

Perk because it’s nice to hear these things first. Frustrating because you often can’t stand up for publication what you’ve heard.

For instance, long before Topia went down the tube, word was out on the grapevine that this wasn’t a company to do business with, or work for, if you wanted to get paid. But until the administrator was called in, little could be written without facing a libel risk.

There were also lurid tales swirling around Blue Freeway well before the whole thing publicly imploded.

And remember CommQuest and its expensive Bongo Virus New Year’s Eve party with Paris Hilton? That was gossiped about at the time too.

I remember chatting to a senior industry figure more than a year ago, who was highly sceptical of the Photon Group model. In particular he was cynical about the company’s debt levels.

I argued to him that they’d probably be fine – they were buying best-of-breed agencies. When you own the likes of BMF or Naked, for instance, you’ve got some pretty excellent assets. At the time, I wondered if he was just gossiping to destabilise a competitor.

But I started hearing other stories of individual companies within Photon with eyebrow-raising practices.

And at the same time as redundancies, grandiose staff events on Cockatoo Island with Empire Of the Sun performing. There were some intriguing anecdotes from that night, I can tell you.

I began to wonder.

So it’s not a big surprise to hear that the clearing of the decks at Photon has begun. At the time of writing, the company’s shares are suspended and it appears to be in the midst of a major round of capital-raising.

That – of course – isn’t just a story for the financial press. Real people, with careers to consider and families to support and kitchen appliances to buy are affected. I know a few of them, as it happens.

From now on, I suspect the stories – and anecdotes of the how the company was run by former CEO Matt Bailey and chairman Tim Hughes are going to come thick and fast. Indeed, if someone had the time and inclination, there would be an excellent business book to be written about the stories behind Blue Freeway, CommQuest and, I suspect, Photon. Rich Kids, the story of the OneTel debacle, springs to mind.

(Certainly Bailey and Hughes didn’t feel too much personal financial pain last year – I see from Photon’s 2009 annual report – page 28 of the PDF I link to here – that Hughes’ total cash compensation (whcih excludes other share perks)  for his role doubled on the previous year to just over $1m, while Bailey’s rose from $900,000 to $1.1m.)

The question is whether the ending will be the same for Photon as those other companies I’ve mentioned.

There was an excellent piece of analysis by James Chessell in The Australian on Saturday. His argument is that newly-arrived CEO Jeremy Philips is the man to fix Photon.

He may well be right, although Photon is certainly in for some turbulent weeks. But there are still several strong agencies within the group which have maintained their own individual cultures, and I suspect that will be important.

Nonetheless, I expect to see job losses and more mergers at some companies within the group. But so far, the gossip seems to think that Photon will get through the storm. And the gossip is often right about these things.

Tim Burrowes


Get the latest media and marketing industry news (and views) direct to your inbox.

Sign up to the free Mumbrella newsletter now.



Sign up to our free daily update to get the latest in media and marketing.