madcomments

A sorry exit for Moloney

Posted in Media, Arif Durrani, Latest reporters' blogs May 5th, 2007 by Arif Durrani

News that Emap’s chief executive Tom Moloney is stepping down will have been greeted with cheers by many inside and outside the media, a sorry end after nearly 26 years at the company.

Shares in the publishing and broadcasting group jumped almost 7 per cent as the market realised just how open it had become to a bid approach.

A series of personnel and structural moves throughout the last year have only served to make any potential carve-up of the group all the easier.

Staff morale is low, and the management unsettled. Domestically, the magazine boom years seem consigned to the past while its radio division continues to battle with the problem of declining ad spend.

As a group, Emap has been forced to issue several profit warnings within the past 24 months and operations have come under constant criticism for apparently swinging from one cost-cutting initiative to another.

One of the group’s most attractive assets is its business-to-business (b2b) magazine division, which includes the likes of Retail Week, Broadcast and Nursing Times, and has proved be particularly resilient and adaptable during a gruelling start to the millennium.

As from Easter, staff on most of these titles (under Emap Communications) are now conveniently hived off under one roof in Mornington Crescent, guarded-only by two grandiose statues of cats.

Further city speculation will not be tempered by news that the vacuum left by Moloney’s departure is to be filled in the interim period by non-executive chairman Alun Cathcart. A no-nonsense ‘level head’, he already has experience of breaking-up FTSE companies from when he was chairman of leisure business Rank.

And for all the talk of the board having a “clear strategy” to deliver growth in the future, many have been left wondering just how many more moves the lumbering £1 billion + a year behemoth has left up its sleeve.

Disgruntled former employees who failed to make the cut in this year’s slurry of job reviews will see Moloney’s departure as a fitting end to an unstable rule, but it is easy to forget just how much has happened during his tenure.

After working his way through the ranks, Moloney’s four years at the helm started in the aftermath of a disastrous move into the US market when the acquisition, and subsequent sale, of Petersen left the company near the brink, with a dent in its coffers of more than £600,000.

Since then, he has presided over a series of successful magazine launches, including the innovative weeklies Grazia and Zoo.

On the radio front, he has seen the acquisition of Scottish Radio Holdings in the summer of 2005 and leaves with most of Emap’s national digital-only stations actually increasing listeners and hours year-on-year, despite a tough market.

The Hits and Smash Hits now boast the most listeners of all the digital radio stations in the UK.

There has been some notable success stories in less traditional fields too, not least the acquisition of fashion portal WGSN, which has grown 32 per cent. The consumer division will be hoping for similar returns from the newly acquired Yospace.

It was always Moloney’s plan to lead the publisher of Heat and FHM away from its reliance on magazine revenues and within the past four years non traditional revenue streams have out performed the rest by more than two to one, and in many cases far more.

However, since the beginning of last year there has always been the nagging sense of things slipping away from the 48 year old.

Following a poor first quarter in 2006, which culminated in the sale of Emap’s French operations, the CEO established ‘Ask Tom’, a one-on-one dialogue on the company’s intranet service encouraging questions and suggestions from the workforce. If that doesn’t unsettle a company you’re doing well.

There will, of course, be plenty of time to reflect on how the group has fared during what has been a challenging time for all media. But for now the focus turns to his possible successor. Emap has appointed the headhunters Zygos for a search that is expected to take between three to six months.

Many household names are already being bandied around, whoever it is will be heartened by the news that next week’s annual trading results are expected to be in line with the company’s own modest expectations.