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Eddie McGuire resigns as Nine Network CEO -

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Eddie McGuire resigns as Nine Network CEO

Broadcast: 18/05/2007

Reporter: Stephen Long

The man known as 'Eddie Everywhere' is no longer going to be in the boss' chair at Nine, although
Eddie McGuire says he'll be staying at the network.

Transcript

VIRGINIA TRIOLI: In business and media today is the shake up at the top of the Nine Network.

The man known as "Eddie Everywhere" is no longer going to be in the boss' chair at Nine, although
Eddie McGuire says he'll be staying at the network.

To analyse the business reasons behind the move, I'm join by Stephen Long.

STEPHEN LONG: Evening, Virginia.

VIRGINIA TRIOLI: Evening, Stephen.

Well it was long predicted, this departure of course, many people saying he was going to go back to
Melbourne.

And with things so bad at Nine, revenues down and ratings down, I guess it was inevitable.

STEPHEN LONG: Well the basic problem is he can no longer look at the camera and say, "Still the
one". Twelve straight weeks they had it for, coming second to Seven in the ratings. Go back a
little while and Nine used to command an audience share of 38, 39, 40 per cent. On the OzTAM
ratings they're down to 34 per cent, just a bit over 34. The media buyers say for every percentage
point of decline in audience share you lose $30 million in revenue.

Then there's the audience mix. Nine is big in the over 55s but they don't tend to command a lot of
advertising dollars, the advertisers prefer the 16-39 age bracket. Their market share there is
pretty weak.

VIRGINIA TRIOLI: The discussion around town was Eddie simply wasn't given the power he needed to
get the job done, that he needed to get done. Although they have been slashing and burning pretty
strongly at Nine, haven't they?

STEPHEN LONG: Yeah, but I don't think slashing and burning is really Eddie's game or his favoured
occupation and he kind of gave a hint at that today when he was giving reasons for stepping down.
This was Eddie McGuire's explanation.

EDDIE MCGUIRE: No I wasn't given the flick if that's what you're asking me. No. Not at all. No, no
- look the simple solution to that is the fact that I've signed a five year contract to remain at
the Nine Network. I like being able to float through, make things happen and go about doing these
things. The position of CEO at the Nine Network for the foreseeable future is going to be one
that's going to be heavily about the machinations of finances and doing those sorts of things which
aren't necessarily all the things that I want to be spending all my life doing. I'm good at other
areas and I want to more of those areas.

VIRGINIA TRIOLI: 'The machinations of finances" is an interesting phrase there, because I know, and
it's the word around town, that the private equity investors want a 21 per cent return on their
investment at Nine.

STEPHEN LONG: Well, that's staggering. Twenty-one per cent in a media company - that is blue sky
mining, and they're really going to have to slash and burn costs to achieve that.

And you can understand it, though, when you look at the financials. I mean, there was a $4.5
billion private equity buy in. They've got it loaded up 70 per cent debt to 30 per cent equity, so
they really, really need to get a big return, to make the numbers work, pay down the debt. And I
don't think slashing and burns costs is Eddie's key talent.

VIRGINIA TRIOLI: And not what he'll be doing in the future. Thanks, Stephen.

VIRGINIA TRIOLI: You're welcome, Virginia.