Eddie McGuire: Dressed to the Nines

Can the Nine Network turn its fortunes around under the guidance of new CEO Eddie McGuire?

Wealth Creator looks at the keys to the media king's success and how his winning attitude will maintain the network's strength.

Late in the 2005 season of Who Wants to Be a Millionaire, Eddie McGuire gave away the show's first million dollars to 'Coach' Rob Fulton. Fulton became the first person to win a million dollars on any Australian television show and his win provided the network with some of its biggest ratings. However, it wasn't such a dominant year for Channel Nine. Main rival Seven gained significant market share and valuable ground through savvy acquisitions such as Desperate Housewives and Lost. McGuire himself lost significant ground to The Amazing Race, before the football season kicked in proper and the Footy Show again reigned supreme. It seems the top-rating network was resting on its laurels, something the new CEO understands cannot continue to happen.

McGuire knows he will need more 'Millionaire' moments to stem Seven's tide. Another Fulton would do nicely, but there's no guarantee that the country will turn over more quiz show millionaires than the three it now has. McGuire will be expected to maintain the station's number one status using the same tenacity, insight and ingenuity that made the Footy Show, and indeed his broader career, such a success, not just millionaire moments.

The mandate

PBL boss James Packer has given McGuire a direct mandate to reduce costs. Ratings will take a back seat to profit generation under Eddie's reign. He told the Australian newspaper that he had been instructed to come up with a model that strikes a finer balance between cost control and creative programming. "One of the key things we have to do at Channel Nine is provide profit for PBL."

First he needs to address the slide in full year revenue, which fell from 38.7% to 37.3% of the $2.8 billion metropolitan advertising market.

Credit Suisse however is forecasting another decline - a 22% drop from last year's $250.5 million. With Kerry Stokes at Seven working himself into an even stronger position. This does not phase the brazen boss, "There's no doubt Channel Seven has emerged in the last 12 months and they've got some strong programming, and there's still no doubt Channel Nine is number one," said McGuire. "We will defend that position as strongly as possible but, as I've said, that model we want to achieve now going forward is one of strong profit, and at the same time being able to come up with creative shows and get the revenue up as much as we can."

Shareholders at PBL are looking for stronger profits. And as James Packer looks to consolidate PBL's position in gaming and media, Channel Nine will become a fully incorporated entity of the parent company. It means that McGuire will, for the first time, be responsible directly to the shareholders - a far tougher challenge than those he has faced as celebrity and network identity.

Can he do it?

Business and television commentators have been divided as to whether McGuire has the acumen to handle corporate Australia. As host and journalist he has excelled, but CEO of one of PBL's major entities could be a different ball game.

The first thing he will have to temper is the effect of his withdrawal from hosting duties for two of Nine's flagship programs. Nine may have gained a determined and well-received businessman, but in that one fell swoop they lost their most revered presenter. It's a vicious circle in which ratings points mean revenue (one rating point is the equivalent to $48 million in revenue). Should figures remain stable for Millionaire and The Footy Show his duty will then be to maintain Channel Nine's dominance and with Seven acquiring the rights to football coverage in 2007, this could be a difficult task.

Rumour has it that some board members are worried that the task is beyond McGuire and the appointment could backfire. That it could be another James Packer One-Tel debacle. However McGuire knows that his friendship with Packer had nothing to do with the appointment, this was a board decision and as McGuire told the Today Show, "Let there be no mistake, James Packer's best friend is the PBL share price."

McGuire would be well aware that anything other than top performance would mean his swift demise, and failure for McGuire has never been an option.

"Get out there and win and make sure that after you've tried your hardest, you've won more than you've lost and given yourself the opportunity to win everything. It's all preparation; do the hard work beforehand and the rewards come through."

This quote reflects one part of the McGuire personality that could ensure his success in the role. He hates to lose. Another is his ability to sell: his product or himself. He is very personable.

Media buyer Harold Mitchell agrees. "I've seen him with some of our big advertiser clients and others and I've been highly impressed."

Mitchell believes that McGuire is the right choice. He told the ABC, "Nine don't quite have the market share that they'd want so his challenges ahead are to make sure that ratings are substantial as number one... At the same time, he's going to have to make sure that he rebuilds the share of ad dollars, which had slipped a bit."

Perhaps it is Mitchell who best sums up why McGuire will succeed. The buyer has high praise for the new network boss. "He's got a great business brain, he is tremendous with people. The big advertisers I've had him in front of, he switches on completely, understands business, is energetic, is good in every way. He's the next generation, and I think this is nothing but good news for Nine and good for television."

Mitchell also points out that McGuire will have a team of some of the country's best executives supporting him, so he is not alone.

Branding expert Thomas Murell of 8M Media and Communications agrees with Mitchell's assessment believing the appointment will add millions to the network, citing McGuire's branding power as crucial to Nine's growth.

"Branding in today's competitive, crowded and noisy marketplace now needs to focus on three levels - the corporate brand for capital markets and external stakeholders, the internal brand for employees and at a leadership level, the personal brand of the CEO has a significant and often underestimated impact - McGuire has the qualities to succeed at all three levels."

Murrell believes McGuire's appeal to every man is the key to his success. McGuire's values of the ambitious, hard working and determined battler appeal to the Australian larrikin in us all, and because Nine's audiences, revenue streams and future fortunes lie with his target market, I'm convinced he will be a success despite his perceived lack of management experience."

McGuire may well have been hired on the skills he possesses and his personal brand rather than the skills he will learn. Upon his appointment he said, "The people who make these decisions will have taken into account the negatives and the positives and sometimes you hire people for what they've got. Not what they haven't got."

But what is it that McGuire hasn't got? He is not a salesman, but he can sell. He is not a financial analyst, but he managed to turn a football club in more than a million dollars debt profitable, while attracting some of the country's biggest brand sponsors. He is not in the game of acquisition, but he knows how to make a television show work and what it is that appeals to audiences. He may not be as big in Sydney as in Melbourne, but he holds court with some of the most powerful businessmen and politicians in that State. There is no reason why he should not succeed and make PBL shareholders even more profitable.

Says Murrell, "Successful leaders with high levels of power, influence and charisma are able to align their personal brand with that of the company to add shareholder value and this is what makes the appointment of Eddie McGuire such a good decision."

No illusions

McGuire himself is under no illusion what he must do. He told the Today Show, "I'm not big on being number two in anything ever. There's no doubt we have to get the profit up and get those margins right. That's not just the financial community. We are part of PBL and that's the riding instructions I have - but not at the expense of putting on top quality television.

"We have to work out what people want to see, not what you think they want to see. That's what we'll be into."

He also hinted he was under no illusion that the changing face of media can affect ratings. "It's not only the traditional Tens and Sevens we'll be fighting, we've got mobile phones and the Internet and all that type of thing. So we have to take a 2006 to 2010 approach to what television is going to mean to people."

What McGuire will bring to the role is a culture of success. Though on field Collingwood Football Club has struggled, off field it is a powerhouse. The $1.7 million debt he acquired when he took over the presidency is now a thing of the past. In fact total profits since he took the reins totals $9.1 million and the club boasts 40,000 members. McGuire also oversaw the move from the dilapidated Victoria Park to the purpose built Lexus Centre. He has attracted a raft of top line sponsors including Lexus, McDonalds, Emirates, Sony, adidas, Crazy Johns, Coca-Cola, and Gillette among others. Sponsors PBL would they themselves like to have links with. McGuire believes it is his ability to turn Collingwood's fortunes around that got him over the line. "I have no doubt I wouldn't have been considered for the job had it not been for what I've been able to do at Collingwood," he said. "The business of Collingwood and the business of television are not dissimilar. It's forced me in front of some of the biggest names in advertising. It's taught me a lot about leadership and creating a team.

He also formed a partnership with Winners Nutrition to manufacture protein bars for the Collingwood players

"We couldn't find the right nutritionally sound foods, so we decided to develop them ourselves," he says of the venture. Again the venture was a success and now the bars are distributed not only to other football clubs and through Australian supermarkets, but internationally as well.

It seems whatever McGuire touches turns to gold. McGuire Media, the business he launched with brother Frank in 1997 has been behind the success of Triple M's Grill Team, children's show Screema!, as well as four specials and two Centenary of Federation specials - Underdogs to World Beaters and Vaudeville to Vibe for Nine.

He also has large property interests and sits on the board of several committees including the Victorian Events Committee, a position he'd like to keep even though he uprooted wife Carla and sons Joe and Alexander to Sydney.

It is a big move in many ways, but there is no doubt he is ready to aim for the top.

"You can sit around planning your way to the top but the quickest and easiest way to the top is just by being the best at what you're doing. The rewards come with it."

Certainly McGuire has been rewarded with his highest honour, the responsibility of leading Australia's top rated television network. His colleagues have faith in him; even the seven bosses will not underestimate his pull or tenacity to succeed. Sam Newman said of the appointment, "He demands excellence and quality and thoroughness and possibly that's why he's been given the job. He'll do very well. He's got some insight, foresight and a bit of experience despite his age (he is 41)."

If there is one consequence of his position other than success, it is to prove his critics wrong. McGuire hates to lose. It is motivation enough for him to fulfill the Packer/PBL mandate and to make himself one of the most powerful players in the country, not just one of the most (in)famous.

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