THESE are tough times for the media. Print sales are sliding, television and
radio are fragmenting, everyone is converging online and trying to make
money out of content. Does anyone know what the future holds? Thought not.
So maybe going back to basics is as good an approach as any. “I think the best
growth strategies come from the core,” says Rob Woodward, chief executive of
Scottish Media Group (SMG). “This company had forgotten what its core was,
and neglected it.”
In SMG’s case, that core is the two ITV franchises in Scotland – both branded
STV – and a programme-making base best known for detective dramas such as
Taggart and Rebus.
So Woodward, the English-accented Scot installed as SMG boss by unhappy
shareholders six months ago, is getting the company back to what it used to
do well. That means out go the assets collected by the previous management –
Primesight posters, Pearl & Dean advertising, Virgin Radio – and in
comes the new focus. And the business wheel keeps turning.
For SMG, that’s better than grinding to a halt. Its market value fell from
£2.1 billion in 2001 to £175m this year, after profits slumped and expansion
left it with £180m of debt. Hence Friday’s sale of Primesight to GMT
Communications for £62m. A planned float of Virgin Radio may be delayed
because of the unexpected departure – also on Friday – of Paul Jackson, its
boss. He is joining GCap, a commercial-radio rival. Loss-mak-ing Pearl &
Dean may simply be given away.
For Woodward, 47, a former Warburgs banker who did four years as commercial
director at Channel 4, it’s a mighty task that has other television bosses
shaking their heads. What does he know about broadcasting and
programme-making? He has never run a television company before.
Yet nobody can doubt his appetite for the job. He spent much of last year
stalking the company from afar, banging on the doors of SMG shareholders,
trying to get them to kick out the management and put him on top. That was
before he even had a foot inside the group’s Glasgow headquarters.
At that stage, Woodward had left C4 and was simply assessing opportunities. “I
was looking at ailing media companies that could use improved strategy and
new direction and, by any criteria, SMG came to the surface quite quickly.
It was a company without friends. A lot of people had lost a lot of money
through SMG.”
Flash forward to now and Woodward has been chief executive for six torrid
months.
There has been another profit warning, and worries over the true extent of
SMG’s difficulties, and doubts as to whether he can get good returns from
the divisions he is selling, but he is adamant that the corner has been
turned. This month SMG reports interim figures and Woodward promises more
detail on progress. And judging from his gently upbeat demeanour, sitting in
the London offices of his PR firm, he doesn’t look crushed by what lies
ahead.
“We have a new board – it’s a very uplifting set of circumstances. The legacy
of the company is important but nothing is too precious that it can’t be
changed.”
Born in Bath, but brought up in Scotland, Woodward talks softly, sipping
mineral water as he goes along. He is, for TV-land, an unusual boss, already
rich from banking – as evidenced by homes in Chelsea, Ayrshire and Glasgow –
yet unflashy and thoughtful, a boyish figure dressed in white shirt and
black suit, like a sombre lawyer.
“He’s the quiet man,” says Lord Alli, the television entrepreneur who liked
Woodward’s ideas so much he joined the new SMG board. “He’s really focused,
everything is thought through, and he has a real enthusiasm for the new
media landscape.”
That includes his strategy for SMG. Woodward wants to do more than just
concentrate on programme-making and broadcasting – he wants a greater online
presence and promises to make money there, too. Matters are complicated by
STV’s relationship with ITV, which owns all the franchises in England and
Wales and whose broadcast schedule and advertising it mainly carries. But
the imminent revamp of ITV by Michael Grade should work in its favour. “I
call it the potential ITV tailwind,” says Woodward.
It has not been plain sailing so far, however. Woodward admits that the
finances at SMG were worse than he expected. “Remember, we didn’t have the
opportunity to do due diligence first.”
And his aim of surrounding himself with top Scottish talent hit a rock when
his hiring of Alan Clements, the producer behind Location, Location,
Location, was blocked by RDF, which bought Clements’ production company two
years ago. RDF claims Clements is bound by a three-year noncompete clause
until December 2008. Woodward still doesn’t know when Clements – who is to
oversee all programming – will come. “He’s keeping the legal profession
north and south of the border in business,” he says wryly.
Woodward’s plans to drive up programme sales have also been labelled
optimistic by analysts, likewise his aim of taking television audiences
online. But his determination to reemphasise STV’s Scottishness,
particularly in covering local news online and on television, has gone down
well north of the border, where a minority nationalist government wants more
Scottish programme making.
But can broadcasters make money from their online output? “Well, C4 is pretty
good at it – it has a hugely powerful online presence. You have to think of
a kind of contin-uum, an on-screen presence that moves to an online presence
where you can generate online advertising revenue, then further revenue
through transactions.”
C4, of course, is where Woodward cut his teeth in television, developing
subscription channels and website services as commercial director. There he
worked closely with chief executive Mark Thompson, who later left to become
director-general of the BBC. When Thompson’s replacement, Andy Duncan,
changed strategy and focused on free-to-air channels, Woodward resigned.
“It was more about Mark going,” says Woodward now. “I had done what I was
there to do, turned a huge loss with no strategy into a clear strategy
generating significant profit.” Some at C4 found Woodward an uneasy
workmate. Discipline is his key characteristic. He doesn’t drink coffee, he
doesn’t eat “empty carbohydrates”, he guzzles fruit.
But Sir Robin Miller, the former Emap boss who sat on C4’s board, says
Woodward was highly effective. “He wasn’t there to be popular with programme
makers, he came in to apply real commercial discipline. He selects good
teams, he allows them to flourish, and he turns things round.”
Woodward describes himself as a problem-solver, never happier than when
working towards a solution. His father was an electrical engineer, his
mother a musician; both came from Birmingham. He was born virtually an only
child, with one sister 18 years older than him.
His Scottish roots come from his father’s decision to move the family to
Troon, where Woodward attended Marr College, an independent but free-to-all
school run by a charitable trust. Its nonelitist grounding and work ethic
left its mark, as did his parents’ push. “They taught me there are no
barriers except the ones you create yourself.”
After early jobs at Kimberly-Clark, the paper giant, and the laboratory
supplier Whatman, Woodward moved into consulting with Touche Ross. He was a
partner by the age of 31, and had joined Warburgs by the time he was 38,
specialising in media and telecoms. A surprise call from Michael Jackson,
Thompson’s predecessor at Channel 4, lured him into television in 2001.
A big leap? “A lot of my friends thought I was mad,” nods Woodward, “but it
was a really interesting chance to take on a senior role in a media company.
I absolutely loved it – best job I ever had.”
And then he left to find a firm he could run himself. He targeted SMG for 10
months, long after friends like Miller had told him to walk away. Finally,
activist investor Hanover agreed to buy a £30m stake in January and install
him. Miller, for one, was impressed. “The great thing that makes people
successful is persistence, and Rob’s certainly got it.”
Now Woodward has to make his plans work. He has slimmed down management and
plotted the noncore disposals. Floating off Virgin Radio, which could fetch
anything from £50m to £90m, is next on the list. But why sell it if it makes
good money? “Because we can’t afford to keep it,” he says. “Everything comes
back to the debt – the only way you can put the company on the front
foot is to have a normal balance sheet.”
Most important, he wants an open leadership style. He has already published 12
key performance indicators for SMG’s broadcast, content and ventures
divisions. That’s unheard-of in television. “I can’t think of another
company that’s done that,” he grins.
Will he regret it? He shrugs. “We’ll be judged by results.”
As for the fight for online supremacy, it is all up for grabs, he says. There
is only one thing to remember. The winners and losers might not be the
obvious ones.
ROB WOODWARD’S WORKING DAY
THE SMG chief executive wakes at 6.45am at his flat opposite his company’s
base in Pacific Quay, Glasgow.
“I have a Berocca [vitamin supplement] and a smoothie and I walk to work in
five minutes,” says Rob Woodward. Sometimes he will attend a business
breakfast at City Inn first.
“I work a long day because turnrounds are hard work. I’ll see everything from
investment propositions to people wanting jobs or commissions, or selling me
services. We’ve also got all our major advertisers coming in.”
Woodward avoids lunch and entertains contacts for dinner at Stravaigin
restaurant. He often takes the rail sleeper down to London for meetings.
VITAL STATISTICS
Born:November 30, 1959
Marital status:unmarried, with girlfriend
School:Marr College, Troon
Universities:Durham and Edinburgh (MBA)
First job:strategic analyst, Kimberly-Clark
Salary:£380,000 plus bonus Homes:Chelsea, Glasgow,
Ayrshire
Cars:black Land Rover Discovery
Favourite book:London: The Biography, by Peter Ackroyd
Favourite music:Saw Doctors
Favourite film:Motorcycle Diaries
Best gadget:Yamaha quad bike
Last holiday:France
DOWNTIME
ROB WOODWARD relaxes by spending time with his long-term girlfriend, Tricia
Bey, landscaping the garden at their South Ayrshire house. “I’m quite a
practical person, I come from an engineering family. I love mucking round,
chopping down trees. I’ve got a chainsaw, and access to a JCB.”
He also likes cooking and the theatre. He sits on the council of the National
Youth Theatre. “I saw White Boy last month at the Soho Theatre. It was a
fantastic play.”
He is very careful about what he eats. “Yeah, I’m naturally disciplined. Some
would say fussy.”
