REA CEO likely to be announced this week.

by Peter Ricci, on 27th August, 2008 • 13 Comments

The new REA CEO looks likely to be announced this week. I have had a number of people send me emails as to who they think it is going to be.

Can they keep the growth going at the same clip? Will they simply be a News Ltd puppet? Will it be a woman? Tell me who you think it could be and why!

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13 Responses to “REA CEO likely to be announced this week.”

AJ says:
27th August 2008

The rumour I am hearing out of Mossman is that the new REA CEO will be Robert Simeon.

Robert brings a wealth of experience in Print and Online from his experience on the domain discovery committee.

The whispers of speculators are suggesting that Robert will merge Domain and REA into one, and rebrand REA to Domain. Thus making Domain the number one portal.

Robert will not renew his REA subscription, opting to pay more each month. This will be portrayed as adding more value to shareholders.

He will talk up the share price, and instill confidence & Security in the new ‘Domain’ by telling everyone that Google is coming.

As for overseas expansion, Robert sees Thailand and Bali as the next key markets.

The second sentence on his Bio on the REA Investor page will claim that Robert still holds the record for the highest sale price of a property in Mossman.

Read more at http://www.realrobert.com.au/iamthenewreaceo
Peter Ricci says:
27th August 2008

LMAO, great call AJ!
snoop says:
27th August 2008

Whoever it is would have to come from the Newscorp fold.
Unlikely an outsider would get the gig.
Robert Simeon says:
27th August 2008

Apologies to AJ – I declined the interview!

I will settle this bit of online genious – the Fairfax Digital Discovery Team has never ever convened a single meeting as it simply does not exist. I just embellished the concept as an excuse so as to avoid being on the REA panel which I kept telling a persistent Simon that it was a conflict of interest for me.

So REA keep referring to the Fairfax Digital Discovery Team which then prompted REA to then establish their very own team. Sorry guys it simply never existed which I must admit had those who knew laughing every time REA kept referring to this amazing Discovery team.

There you go AJ – I hope you and all friends at REA will get a chuckle at who had the last laugh :) :) :) :)
TomS says:
27th August 2008

That’s a cracker. Very funny AJ. Scarey but funny.

The way the realestate market is going at the momement the record for the highest sale price of a property in Mossman will be safe for a long time to come.
Craig Adams says:
27th August 2008

Hi Robert,

As you are well tuned in to the goings on over at Fairfax and the decisions of their Board and CEO, do you care to provide an objective and balanced opinion on their actions and intentions over the past few days?

Surely they are just as evil and nasty as the numbats at News who supposedly control the ex-one man band at REA. News got rid of one bloke…….Fairfax 550….sure most in editorial and print but a few digital folks are out as well.
AJ says:
28th August 2008

It seems not many people are laughing at Fairfax Robert.

550 people gone in one day.

Perhaps ‘discovery team’ is not the correct term, so what is the term? you know, the panel/advice you gave (or still give) domain and receive free products for (at the least)

My original post was only a pis-take but it appears to have hit a nerve.

So the question is – do 550 staff = 1 Simon Baker?
Scott Savage says:
28th August 2008

Can I guess Greg Ellis? :-)
http://www.asx.com.au/asx/statistics/showAnnouncementPDF.do?idsID=00873984
Robert Simeon says:
28th August 2008

Greg,

I have nothing to offer given that I have next to no involvement with Fairfax Media these days. All I know is what I read online and in the newspapers and I can assure you that I am certainly not avoiding your question. There is a misconception here that I am heavily involved with Fairfax where I can assure you that today, I have next to no involvement as I run my business not Fairfax.

AJ,

“Perhaps ‘discovery team’ is not the correct term, so what is the term? you know, the panel/advice you gave (or still give) domain and receive free products for (at the least)

My original post was only a pis-take but it appears to have hit a nerve.

So the question is – do 550 staff = 1 Simon Baker?”

I agree Simon’s ego would equate to approximately 550 people :)
Robert Simeon says:
28th August 2008

Greg – here is an interesting article published at http://www.businessspectator.com.au (awesome website)

6:40 AM, 28 Aug 2008 Stephen Bartholomeusz
Fairfax’s paper problem

Bartholomeusz: Fairfax’s paper problem
All roads lead to liquidity

Fairfax Media’s decision to cut 550 jobs this week is a good example of the digital dilemma confronting newspaper publishers around the globe. They are damned if they do slash jobs and costs and damned if they don’t.

The Fairfax response to what in the past would have been a cyclical downtrend in advertising revenues as the economy slows, has been the biggest cost-reduction program in its history.

It is a fairly dramatic response because the downturn isn’t just cyclical but structural, with the impact of the continuing erosion of the group’s once-fabulous classified advertising revenues as they shift online being exacerbated by the impact of the cycle on display ads.

Cutting costs in line with declining revenues is, of course, a response rather than a solution to the challenge created by the continuing decline in the relative profitability of Fairfax’s flagship broadsheets.

It buys some breathing space from demanding investors in the near term, and blunts the impact of lower revenues, but risks accelerating a spiral of declining quality, revenues and earnings in the longer term. Financially, the Fairfax metros are already in a quite steep and longterm decline.

For the past decade, the Fairfax strategy has been to control that rate of decline in the metro mastheads’ profitability while busily diversifying away from them to give the organisation, rather than the metros, a longterm future.

The purchase of the New Zealand community papers, the Rural Press merger and the Southern Cross acquisition have dramatically reduced Fairfax’s dependence on the metros, which now probably represent only about 15 per cent of its market value.

Leaving aside the role that newspapers, and broadsheets in particular, play in societies, that would be a rational business strategy if an element of that diversification strategy wasn’t to transition their mastheads and their audiences into a digital future.

Fairfax reports Fairfax Digital’s performance quite separately to the physical papers whose content it leverages. Its numbers, and growth rate, look quite impressive. Revenue was up 30 per cent for the year to June and earnings before interest, tax, depreciation and amortisation (EBITDA) were up nearly 54 per cent to $54.3 million. Digital is valued by analysts at something close to 70 per cent of the metros’ values – and those relative values are closing rapidly.

That looks pretty impressive but, as The Age’s Matthew Ricketson has pointed out, appearances can be deceptive because it doesn’t appear that Fairfax fully allocates Digital’s share of the cost of the content it shares with the physical papers. Digital generates only a relatively small proportion of its own content.

That’s savvy, because broking analysts attribute higher multiples to on-line businesses – 10 or 11 times prospective EBITDA for Digital versus about 7 times EBITDA for the metros.

The more Fairfax can maintain the costs of generating content for Digital within the metros, and swell Digital’s reported earnings, the greater its own value. A different approach to cost allocation would, of course, make the metros look more profitable and make them smaller targets for cost-cutting. The market can be shallow.

In the longer term, however, if the metros continued to wane and Fairfax continues to reduce their cost bases in tandem with their revenue bases, Digital would be affected. There is a symbiotic – some would say parasitic – relationship between the metros and Digital, given that they provide, cheaply, most of its core content.

If the metros were unable to provide as much content as they have, it would damage Digital’s competitiveness and prospects. If it had to pay a growing share of the cost of content generation, its economics would be far less attractive.

The longer term future of serious journalism is almost certainly online. While the economics of the major media titles online are suspect at this point, it is a more efficient and flexible distribution channel while also being lower-cost and capital-lite.

Unless the traditional media have some really serious and compelling and unique content to offer in an environment where content is generally free, however, there would be no point in even attempting a migration into such a crowded and competitive space.

Fairfax may be able to cut 550 jobs including, it appears, more than 100 editorial positions in the two big broadsheets, without unduly affecting the quality or quantity of coverage.

It is possible, although perhaps not probable.

Fairfax has already funded more than $100 million worth of restructuring and redundancies over the past seven or eight years – it has already carved into its cost base and the metros, which generate about a third of the entire group’s costs, have been on the receiving end of their fair share of that.

Do nothing and the market would savage the group. Cut too deeply and the future of the metros will be truncated and the eventual opportunity to transition the distribution of their content from the historic formats to an online environment might be jeopardised.

It is a dilemma, but not that tough a one for managers who are pressured, and rewarded well, to manage to short term market expectations. Sadly.
AJ says:
29th August 2008

I love Roberts posts…

I find them challenging, but not in the way which Robert would assume.

“I have nothing to offer given that I have next to no involvement with Fairfax Media these days. All I know is what I read online and in the newspapers and I can assure you that I am certainly not avoiding your question. There is a misconception here that I am heavily involved with Fairfax where I can assure you that today, I have next to no involvement as I run my business not Fairfax.”

Interesting statement.

“THESE Days”

“.. I can assure you that TODAY, I have next to no involvement”

Yep that answered the question clearly.

It is all about choosing the right words to say isn’t it.

Perhaps no relationship at this moment, but in the past?

Or Robert, are you telling us that you were one of the 550?
snoop says:
8th October 2008

more relentless self promotion
I wonder if this will be objective or a platform for personal promotion and biased towards REA?

http://www1.propertyportalwatch.com/about/
Robert Simeon says:
9th October 2008

Well at least Simon can’t be sacked from this gig!