Today FM's Duncan Garner and Tova O'Brien, and MediaWorks' Auckland HQ.
A special edition of our new Media Insider column, with analysis of why MediaWorks turned off Today FM - and where its talent could end up.
The Cav in Auckland is a MediaWorks drinking hole, an oasis for its journalists and commercial teams, within the footsteps of its sparkling studios on Ponsonby’s College Hill. Just two weeks ago, outgoing chief executive Cam Wallace hosted a noisy and buoyant farewell party at the bar, drawing together some of his leaders and talent – including Tova O’Brien and Lloyd Burr – and some of the great and good of New Zealand media and business, including TVNZ chief executive Simon Power (and his predecessor Kevin Kenrick), RNZ chief executive Paul Thompson, Sky TV chief executive Sophie Moloney and Vodafone chief executive Jason Paris.
The mood was cheerful as guests spilled onto the pub’s deck, amid a din of music, industry gossip and drinking. Halfway through the evening, MediaWorks’ Director of News and Talk, Dallas Gurney, scrambled to the bar, trying to find a quiet spot to scribble notes for an impromptu speech on a small scrap of paper. He’d been called up at the last minute to say a few words about his boss.
Wallace – a seasoned Air New Zealand executive and renowned news and a political junkie – had arrived at MediaWorks amid much fanfare two years earlier, with an IPO in his eyes and the dream of a new challenger in the radio news and talkback market.
Having missed the first part of that strategy for private equity owners Oaktree Capital and Quadrant Private Capital/QMS, but with a very real promise that the latter, Today FM, was here to stay, Wallace himself was taking flight – back to his beloved aviation industry and a lucrative, high-profile executive role at Qantas.
Both Gurney and Wallace were upbeat in their speeches, praising their staff and business, all smiles and laughter. In one corner of the bar, though, were some executives who may not have been sharing the same optimism.
Four days after the party, Gurney announced his exit and within a fortnight, Today FM was gone.
Thrust into her new role as interim CEO the week before that party, Wendy Palmer was in front of the Today FM broadcasters, newsroom journalists and digital team yesterday morning, several hours ahead of the originally scheduled time because of the fervour rising from the news floor.
In an extraordinary 30 minutes or so of live radio, O’Brien and Duncan Garner spoke about their fears for the future, after learning they and other staff had been called to a lunchtime meeting with management. As Garner launched into his 9am-12pm show, O’Brien – whose own show finished at 9am – and other staff sought out Palmer. She received no assurance that their futures were secure, indeed, it seems she was told that Today was set to be closed.
She went back into the studio to join Garner.
“They’ve f***ed us,” said O’Brien, a line that will go down, once the sadness and anger ease, in radio folkore.
Within 20 minutes, the station was off-air – replaced with music – and the staff meeting was brought forward. By now, many workers – including O’Brien, Garner, Rachel Smalley and Carly Flynn – were congregating at the office or online.
Palmer began the meeting by talking financial numbers and ominously told of the business hitting a “massive block” in revenue in the final quarter of 2022. That had continued into this year, she said, with April and May forecasts significantly down on last year.
Palmer is a highly-regarded people leader and radio executive. “I hate the fact I am talking to you about numbers when you are people… but it is our reality.”
She revealed to the staff that Today FM’s annual costs – including the newsroom – were around $7.5 million but that revenue for this year would land at about $6-$6.5 million. “There’s quite a gap there.”
She outlined the proposal – the closure of Today FM, as decided by the board; a review of the news operation and future options; and the retention of digital staff. When she outlined the timeframe – just a few hours for feedback – the meeting became heated.
“When I came across, I said we are not going to beat ZB in a year. It’s just so short-sighted. MediaWorks has a history of f***ing up talk radio, pardon my French,” said one staffer, understood to be producer Brad Lewis.
“Why launch the station in the first place? The board should be embarrassed. We’re a year and six days old. You have so much talent in here, it’s short-sighted. You have people who left secure jobs. Tova was the number one political reporter in New Zealand.”
Garner told of working through the previous night, speaking to a father of a child who had escaped a near abduction. “I gave a f*** because I thought this company gave a f***.”
Palmer apologised for the way the matter had unfolded. “I’m sorry, that’s all I can say.”
She told staff she had fought for more time for the station, but the decision had been “taken out of our hands by our board and our shareholders”.
“I give you my absolute assurance that I spoke extremely strongly against this and asked for more time. Talking to you as people … and to be talking about money is not my normal style and feels wrong.”
Rachel Smalley threw shade at the private equity owners, highlighting their lack of understanding of media. “The same thing happened at TV3.” She was, she said, “really f***en proud” of the Today FM team, and the stories it had broken.
Smalley also asked if the departure of Wallace and the resignation of Gurney had led to the breakdown of support for Today FM at board and executive level. Her question was on the money.
Palmer replied: “All I know is that when I came in, there was a lot more to be done than anticipated, the board were clear we needed to find significant savings. The board have come here a couple of times, this is their asset…”
She revealed there were still ongoing cost reviews, from the executive down, throughout the rest of the business.
Gurney himself was emotional. He sat through the meeting for about 30 minutes before speaking, in between silences. “I don’t know what to say. I knew this was going to happen yesterday or whenever we met. This is what I want to say: I am sorry. I know there are a lot of people who came because of me, and I feel I have let you down, I have let you down.”
There are myriad reasons – internally and externally – that lie at the heart of Today FM’s demise, apart from the obvious of it being a loss-making station. (And a $1 million annual loss for a broadcasting start-up is not a big loss - especially if new digital audiences are being grown - but it does highlight the ruthlessness internally.)
As Media Insider reported last week, it was no secret there were factions within MediaWorks upset about the money and resources – including talent and marketing – being poured into a station that was struggling in the ratings in its first year.
Sources say Leon Wratt, MediaWorks’ Director of Content and overseer of music brands, lost confidence in Today FM and was not a supporter. He had previously looked after Magic Talk, before Gurney’s arrival as the Director of News and Talk. Gurney, a widely respected news executive, was responsible for opening the chequebook and luring Today’s superstar talent.
Such was the investment in Today that it was allowed to take over some of MediaWorks’ prized music frequencies - for example, pushing The Rock from 90.2FM to 106.2FM in Auckland. (The lower the frequency, the easier its discoverability.)
“There is no love lost between Cam and Dallas [on one side] and Leon,” says one well-placed source.
Another suggested that the music side of the business felt it wasn’t being heard.
The issues run deeper than that, however.
While Today FM’s ‘A More Balanced Mic’ marketing campaign was clever – a dig at the king of radio himself, Mike Hosking – it ignored one vital aspect of any advertising push: The audience.
Talkback audiences thrive on friction and conflict. Callers need to be engaged. As it happened, there were plenty of examples where Today FM’s content was provocative, important and anything but middle of the road yet it seemed hampered by that marketing campaign.
With the benefit of hindsight, Today FM also launched at the wrong time in the news cycle, in March 2022. Almost the doldrums, in yachting parlance.
The country had been through a massive news period over the previous two years, starting with the outbreak of the Covid pandemic in March 2020; the resulting lockdowns; and culminating in the Wellington protest in February 2022. Newstalk ratings were on a high and Nielsen digital ratings show all major news websites benefited from record or near-record numbers at the time, especially as the Wellington protest peaked.
By the time March 2022 rolled around, the public were looking for a breather. News audiences dipped and Kiwis – Aucklanders in particular – were literally outside, enjoying new-found freedoms and a very temperate autumn.
The several weeks that Tova O’Brien and her new employer were locked in a restraint-of-trade dispute with her former employer, Newshub, proved extremely costly, beyond the headline fact that they’d lost the case. It delayed the Today launch, and the chance to capitalise on some major news events.
To understand the collapse of Today FM, it also pays to rewind 36 years to 1987, and the launch of Newstalk 1ZB, a station born out of desperation after it lost its superstar breakfast host Merv Smith to music station Radio i. If ever there was an example of the pulling power of radio talent it was Smith. Within months, Radio i had gone from number four in the ratings to number 1, leaving 1ZB scrambling.
In response, 1ZB’s music format was famously overhauled to the mix of news and talk that prevails today. But it also needed a talent to take on Smith. Enter one Paul Holmes, fresh from his successful 2ZB morning show in Wellington, and now desperate to make a name for himself.
The new ZB format and shows were a ratings disaster in their first year; falling to ninth. Eventually, Holmes helped pull the station to number 2, before it hit the number one spot in Auckland in 1989. Those results helped catapult him into television – and broadcasting royalty – but they only came about because of the patience and deep pockets of the owners.
Cam Wallace himself had urged his Today FM staff to not focus on ratings in the first two years that the station was around, insisting – along with the board – that it was a five-year strategy, and that building audience through digital channels and new revenue streams were also important planks.
Nevertheless, the rollercoaster ride that Holmes endured all those years ago should give the likes of O’Brien, Smalley, Garner, Burr and others heart. Some of them will already have rival news executives lining up at their door, even if their pay packets might be trimmed.
O’Brien is close to TVNZ’s political editor Jessica Mutch McKay and the pair could make a dynamic duo, especially in the countdown to a hotly contested election. Radio NZ, similarly, suddenly appears to have a dearth of on-air talent – notably its 12pm host Māni Dunlop leaves this week, while other stars such as Karyn Hay and Jim Mora have been off air, with uncertainty over their return. Newstalk ZB and NZME are also undoubtedly poring over the talent books.
It’s unquestionably a tight media market, with cost pressures affecting nearly every business, but some could use Today FM’s closure as a chance to sweep up highly regarded journalists and broadcasters for a longer term gain.
Of equal interest is the future shape of MediaWorks.
While it might have stemmed some of the red ink for now, it may have also killed any hopes of an enduring digital revenue stream. Today FM and its talent provided extensive podcast and website content. The company now runs the risk of too much reliance on its terrestrial music radio brands, with limited growth opportunities.
Going by the numbers presented at the staff meeting yesterday, it seems remarkable that Today FM was making that forecast loss of only $1 million in just its second year. Again, it highlights the ruthlessness of the private equity owners. They had obviously run out of patience, but it’s hard to see the Today FM demise playing out as suddenly and shockingly as it did if Wallace and Gurney were still around – their approach would likely have been a more holistic look at future revenue streams and audience demand, especially in the digital space.
Yesterday I received an email from someone who listened to the playlist of Today FM after the hosts were taken off air. While all attention was focused on the on-air comments of Garner and O’Brien, the following music content was insightful.
“Someone in the know put a bit of advance planning into a bespoke final playlist fit for the closure of a radio station,” the correspondent said.
“It started off in a subtle way with oblique references buried in the middle of the songs, for example: Something Got Me Started by Simply Red (chorus: “I’d give it all up for you…”) followed by…You’re the Voice by John Farnham (chorus: “We’re not gonna sit in silence…”)
Then things got a bit more blatant, with back-to-back farewell-themed songs in quick succession including:
It was a lighter touch to a sad day. MediaWorks confirmed Gurney himself had produced the list for his fallen comrades.
The event is described as a series of aggressive sales pitches.