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Panpa Bulletin : April 2006
april 2006 PaNPa bUlletiN | 47 Steinke moves west in agreeing to succeed Ian Law as the managing direc- tor of WA Newspapers Hold- ings for an annual base salary of $800,000, Ken Steinke, currently CEO of APN News & Media's New Zealand publishing division, is taking over at a critical time for the state's leading media group. The extent of the range of challenges Steinke faces was un- der-lined when, within 24 hours of announcing his appointment, WANH issued a warning that earnings for 2005-2006 will be more affected than expected by the upgrading of its presses. The company now expects the cost of the new Herdsman pro- duction facility to cost around $167 million, up from an esti- mate of $160 million just a few weeks previously. WANH also gave an update on the impact of the upgrade on future earnings, including $30 million for 214 redundancies, against the 207 staff and $26 mil- lion provided for in its first half results. It said the negative impact of earnings per share this year would be 18.3 cents, falling to 5.6 cents in 2006-07. But with the redundancies out of the way and the new plant fully operational, earnings per share in 2007-08 should increase by 3.5 cents and by 7.6 cents the follow- ing year. The challenges facing Steineke, who is a director of PANPA and the immediate past-president of the organisation, are reflected in the package offered by WANH, publisher of The West Australian and an extensive stable of other publications. A 'golden parachute' worth about $2 million has been in- cluded to cover any hostile take- over that might emerge under the government's proposed new media ownership laws. But chairman Warwick Kent says the WANH board does not expect any major change follow- ing the change-over when Ian Law leaves for Sydney to join the Packer family's Publishing and Broadcasting Ltd as head of its magazine arm in May. This is de- spite WANH being regarded, as is Fairfax, as a likely take-over target when the government's proposed new media ownership reforms fi- nally come into effect. But while the parachute might never be triggered, the board felt it was important to include the protection. "There are some aspects of the remuneration package that may be regarded by some as generous, but we had to face reality," Kent said. "We are asking a man to give up a certain position, probably in a group not subject to takeover worries (APN News & Media). We can't ignore circumstances and we needed to ensure he's com- fortable coming to us. "We would have had to give the same consideration to anyone giving up secure employment to come and work for us." Kent said that for the CEO's position, WANH needed s omeone who could "pick up the baton and keep running. We have a lot going on, so we wanted someone who could take charge quickly and was experienced in the business we run." Steinke "knows the business and hopefully, things won't miss a beat. We don't want to change the world in a sense; we think we are pushing in the right direction." In addition to the $800,000 base salary, which includes su- perannuation and a vehicle, the new CEO gets up to $150,000 for relocation and rental assist- ance over two years. And he can boost his salary by 150 per cent from short and long-term bo- nuses linked to the company's performance. The bonuses will not come easily. As well as the extra plant upgrade costs, a softer advertis- ing market, increased costs of newsprint and consumables and a much more competitive com- mercial printing market, WANH's bottom-line is also being ad- versely affected by the down- turn in the box-office revenue from the 55 cinemas operated by Hoyts Cinemas in Australia and New Zealand. WANH paid $347 million in January last year to Consolidated Press Holdings for a half-share in Hoyts; the Packer family's Publishing and Broadcasting ac- quired the other half. One area in which the pub- lisher of The West Australian has badly lagged is in the develop- ment of its internet site, which only offers a few selected stories each day and is not updated be- tween issues. Development of the site, particularly its adver- tising areas, is now being given greater priority. It is certainly one of the potential growth areas that Steinke will being looking at care- fully. Interviewed by The West Aus- tralian's business writer, Cathy Bolt, the paper's new CEO said he did not anticipate triggering a major shake-up. "You never really know until you get your feet un- der the desk but Ian (Law) and I have known each other for a long time and I have a lot of respect for what he's done and I come from a very similar background to him," Steinke said. "I wouldn't envisage the place is going to get turned upside down. There may be slightly different directions but it seems to be a very well run organisation as it is" Steinke said he was very con- scious of the need for independ- ence between management and editorial after spending 15 years as a journalist. "I genuinely be- lieve in the role that newspapers play in a society, that a good so- ciety is a better society for having a free media and a free press, he said. WANH's new CEO is still to finalise his departure date from Auckland; Ian Law is due to leave WANH by May. Steinke “knows the business and hopefully, things won’t miss a beat. We don’t want to change the world in a sense; we think we are pushing in the right direction.” It’s a critical time for Wa newspaper holdings and newly appointed managing director, Ken Steinke faces a raft of challenges reports Jack Beverley a ‘golden parachute’ worth about $2 million has been included to cover any hostile take-over that might emerge under the government’s proposed new media ownership laws.