Friday, February 22, 2013

TEN in crisis as James Warburton walks plank as chief executive

In a new crisis for the Ten Network, James Warburton was tonight sacked as chief executive.

The troubled television network says Mr Warburton, who was controversially recruited from the rival Seven Network, had been "given notice of termination."

A statement from chairman Lachlan Murdoch said Mr Warburton's sacking was effective immediately and he would be replaced by News Corporation executive Hamish McLennan who will join Ten next month.

James Warburton was recruited from Seven amid fanfare and legal action that delayed his appointment until January 2012.

Mr Warburton was forced to take "gardening leave" after a non-compete clause in his Seven contract was enforced, meaning his Ten career rivalled his time between jobs.

Mr Warburton's tenure at Ten was dragged down by a weak advertising market, poor ratings and full year loss of $12.9 million in October last year.

Ten has also suffered a share price plunge from $1.44 per share in April 2010 to 29 cents at the close of trade on Friday.

Despite the brutal nature of the sacking, chairman Lachlan Murdoch praised the man he lured - to the anger of Seven chairman Kerry Stokes and then chief executive David Leckie.

"The Board would like to thank James Warburton for his hard work and contribution during what has been a difficult period for the Company and for the broader media sector. He steps down with TEN’s best wishes," Mr Murdoch said.

Mr Murdoch signalled he is putting hopes of a turnaround in the hands of new chief executive Hamish McLennan.

“The Board is delighted to have been able to attract a world class CEO with a strong track record to lead TEN," Mr Murdoch said.

Ten's executive general manager Russel Howcroft will act as chief executive until Mr McLennan assumes the top job.

Tuesday, February 19, 2013

Reserve Bank signals frustration with high Australian dollar

By Business editor Peter Ryan

The Reserve Bank has signalled its frustration that the Australian dollar remains stubbornly high despite recent interest rate cuts.

In the minutes from its February meeting when the cash rate was held steady at 3.0 per cent, the RBA board noted the past year's 1.75 percentage points reduction had failed to put a dent in the dollar.

While noting that "interest-rate sensitive parts of the economy had shown signs of responding to these lower rates" and that "further effects could be expected over time" the RBA says the dollar is refusing to take the monetary policy medicine.

Members note in the minutes that "the exchange rate remained high despite the terms of trade having declined significantly about 18 months earlier."

In public statements over the past year, RBA officials including the governor Glenn Stevens have expressed concern about the high currency given the impact on Australian exporters.

Since the February meeting, the RBA's Quarterly Statement on Monetary Policy has downgraded economic growth to 2.5 per cent by June this year while warning that unemployment is likely to rise.

In the expectation of higher unemployment and a comfortable inflation outlook, the Board said there was "scope to ease policy further, should that be necessary to support demand."

While the Board said policy was "already accommodative" and "stimulus was continuing to work its way through the economy", some economists believe the cash rate will be cut again at the RBA's March meeting.

With global conditions improving in recent months, the RBA says the "perceived risk of extremely adverse conditions had declined".

The slowly improving confidence, the RBA says, has seen previously conservative investors moving back into high-yielding assets including the sharemarket.

The RBA noted that global share prices had increased by 13 per cent in 2012 and by 7 per cent since the December board meeting.

On bank funding costs, the RBA noted that while costs had fallen significantly it "would take some time for these lower bond yields to flow through to aggregate funding costs."

The RBA minutes back last week's claim from the Commonwealth Bank's chief executive Ian Narev that banks were still not in a position to pass on independent rate cuts to borrowers.