Leckie: Seven ate Nine and Ten

Staff Writer

In their recent Radio Today article, "Who Is The Greatest Programmer in Australia in 2012?" (read here), Brad March and Scott Muller detailed 10 reasons why the team at the Seven Network are the preeminent programming strategists in Australia – and what radio stations can learn from following Seven's lead.

In Monday's Australian Financial Review, James Chessell interviews Seven's David Leckie on his perspective on their dominance in 2012.

And below is the full article from the AFR, or read it on their website here.

The fourth season of MasterChef Australia will be a flop. Tim Worner deserves most of the credit for Seven’s ratings dominance. And “I just want to keep doing it until the board says goodbye”.

So says Seven West Media chief executive David Leckie. In a typically robust interview with The Australian Financial Review, the veteran executive predicts Seven will continue a record-breaking ratings performance in 2012 that has seen the network grab the lion’s share of the $3 billion capital city free-to-air television advertising market.

With Seven’s blockbuster cooking program My Kitchen Rules finishing last week – Tuesday’s final show topped 2.8 million metropolitan viewers – competition among the free-to-air networks will heat up after Easter. Nine is launching a talent show, The Voice, and Ten Network broadcasting new series of MasterChef and Offspring.

“We’ve never, ever been in better shape,” says Leckie. “Not bad for an old fart.”

Seven has not lost an official ratings week since September 2010 and Leckie is confident this run will continue until Nine broadcasts the London Olympics in late July.

Having four AFL games a week will help Seven’s cause as well as the return of shows such as Dancing with the Stars.

Leckie concedes Nine could do well with a new series of The Block and the debut of The Voice, which has been a winner for NBC in the United States. But these days he is less worried about MasterChef given the success of My Kitchen Rules. Leckie is happy enough to refer to it by name, having described the Ten hit as “the cooking show” in previous years.

“We think MasterChef will struggle,” he says. “You’ve got to say they are going to struggle.”

Not surprisingly, the 60-year-old seems happy to point out the shortcomings of Ten, which is run by ex-colleague James Warburton. The former chief sales and digital officer at Seven, Warburton defected last year after it became clear Leckie had no intention of retiring.

Seven fought the move in the Federal Court and Warburton has inherited a challenged line-up from previous chief executive Lachlan Murdoch that includes a misfiring breakfast program and no mainstream sport. It is no secret that Seven executives have taken a certain amount of pleasure from Ten’s poor overall ratings in 2012.

“We have so many programs coming up,” Leckie says. “The big story should be that Ten has got absolutely nothing. We aren’t being bitchy about it – it’s true. Ten has got nothing. It’s amazing. That’s why they are out there cutting rates by about 30 per cent.”

Ten and Nine have been forced to cut ad rates for underperforming shows although both networks deny the reductions have been as much as 30 per cent. Ten argues there are some bright spots with its overall prime-time audience – and key 18 to 49 demographic – up in the early evenings and on Sundays. At the same time, it has shows such as Bikie Wars: Brothers in Arms yet to run.

But there is no denying Ten has had a weak start. Seven has a 42 per cent share of the commercial prime-time metro audience for the official ratings season so far in 2012, compared with 33 per cent for Nine and just 25 per cent for Ten.

Seven has also dominated revenue numbers from data company SMI with a 40 per cent share in February compared with 35.3 per cent for Nine and 25.1 per cent for Ten (a far cry from the 30 per cent share Murdoch hinted at last year).

The one downside for Seven is that the free-to-air ad market is still soft, making it harder for the network to make the most of its numbers.

Leckie is quick to jump on reports in industry publication AdNews that describe Ten as the “overflow network”. The reference to “overflow” suggests Seven is in such a strong position that it cannot absorb any more ad money, leaving Ten to soak up the excess.

“I know that Ten likes to describe itself as the overflow network,” Leckie says. “But goodness me – I’d rather be in the dam. I can tell you that we won’t be losing ground. We will hold the line. Because I’ve never seen a network in such great shape. Never ever. I’m not going to crush my inventory by slashing the rates.”


Citigroup analyst Justin Diddams says Seven’s audience gains this year have outstripped its share of the ad market, meaning the network is probably “under earning” its ratings. However, he is quick to say he doesn’t see its rivals catching up.

“We’re often asked ‘can Seven deliver a 40 per cent ad share?’ and ‘where’s the floor in Ten’s advertising share?’,” Diddams says. “A look at history would suggest that a 40 per cent share of advertising is as good as it gets for Seven and that Ten is trending to a 25 per cent share if another Big Brother-size audience isn’t launched within the next year.”

Leckie admits there are things he would still like to change. The strong performance of Nine news in Sydney, for example, is a source of frustration. “I can tell you every morning when we see the ratings at 8.30 we are acting like we are number 2,” he says. “There are always little spots that we can fix up.

“But what you can do with the platform is promote the shows. [Popular US drama] Revenge would not have got up anywhere else except Seven. We promoted it during the tennis. We’ve got the platform. I always talk about bricks in the wall – I’m sick of saying it, but it’s true. We just try to build and build and build.”

Seven chairman Kerry Stokes hired Leckie to run the network in April 2003 – 13 months after Kerry Packer sacked him as Nine’s chief executive. Seven management has been mostly stable since then but Warburton’s departure prompted Stokes to promote long-time programming boss Tim Worner to chief executive of television.

By all accounts, Worner and Leckie are getting along well, with none of the rivalry that characterised the Leckie-Warburton relationship.

“[Tim] and his team have taken a lot of pressure off me so I can think about other things,” Leckie says. “We work together very, very well. We talk to each other every day. I’m still in the business.

“He and his team deserve almost total credit [for the ratings]. It’s up to me to say yes or no. But those guys work out the format. They do it very well.”

Says Worner: “People forget we’ve been working together for nearly 10 years and it has been a very successful partnership for Seven.

“There might not be instant agreement and there will be really good debate but once we make a decision, everyone in our group falls in behind it to make it work.

“I am enjoying the job a lot. There are a few things that maybe weren’t in the brochure but that’s what I like about it the most.”

Leckie is often cantankerous, and his bluntness doesn’t endear him to all of his colleagues or members of the investment community. But even his rivals agree his track record is strong. “Seven is in the midst of the greatest ratings performance in history,” says one rival executive.

All of which makes speculation about the chief executive’s future all the more interesting. Leckie’s contract expires in the second half of the year. It is believed he is yet to sign a new deal.

At the same time, Stokes has reportedly spoken to other media executives, including Nine boss David Gyngell and former News Ltd chief John Hartigan about senior roles at Seven. Yet most observers are tipping Leckie’s contract will be extended.

“I just want to keep doing it until the board says goodbye,” Leckie says. “Yes, I would like to keep working past June.”

In the meantime, Leckie says he is focused on running Seven West’s stable of television, magazine, digital and newspaper assets, which delivered pro-forma earnings before interest, tax, depreciation and amortisation of $329 million in the first half of 2011-12.

Leckie is regarded by many media executives as a TV specialist.

He says the perception is wrong.

“I’m very familiar with mags. I’m very familiar with The West Australian,” Leckie says.

“I’m very familiar with Yahoo!7.

“So I’m pretty much across the whole board and it’s looking OK. I’m not just a television man now.”

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