Thank heavens for this Federal Government Board featuring John Cain Jr and Julie Ligetti
Bob Kernohan live on Wednesday morning 21 August 2013

A few bad operators can give an entire industry a bad name. Like 2UE.

A few bad operators can give an entire industry a bad name.

Today Tonight and ACA sort out their share – used car yards winding back speedos spring to mind.

It’s relatively easy to root out crooks.

But dealing with wanton incompetence is a lot harder.  How is it my business if someone else wants to go broke?  

High level incompetence generally gets sorted by shareholders who get sick of funding galahs and their lifestyles.  In some industries specific regulators will weigh in too.   We wouldn’t cop planes falling out of the sky or hospitals where the nurses weren’t qualified.

And we shouldn’t cop incompetence in the management of our media companies.  We all have a stake in a properly functioning media.

2UE is an abject disaster and a damaging blight on the Sydney media landscape.   If the bumbling only affected its owners and managers, well c’est la vie.   But Fairfax Radio and 2UE in particular are damaging an entire industry.

So what’s 2UE’s plan.  A couple of months ago Fairfax’s CEO Greg Hywood and his direct reports told owners what to expect:

Fairfax investor day

Here are some of my selected highlights from the CEO's talk.

Hywood says Fairfax will lead the changes in media - hard to disagree with that.  Leading change is not always good.  It's hard to see any good change Fairfax has led, particularly in the return to shareholders bit:

Fairfax leading the change
The current management has certainly transformed 2UE.  Hywood makes this explanatory remark:

Cross subsidies

That relentless focus on costs and not quality has resulted in some of the dreadful, cross industry impacts that are dragging down the prospects for all in the radio caper.  I know personally of one very successful contributor at 2UE told in a review how much his work was valued, how important he was to the team "going forward" and how he'd need to take an 80% reduction in pay.   When advertisers get poor results, less cash flows in, the quality drops, the results get worse etc.

Hywood can bleat about the sanctity of his mantra that Fairfax will never be about using the profits of good businesses to cross-subsidise poor performing assets.   Some might call it cross-subsidy, others investment.   There comes a point beyond which the undercapitalisation and availability of funds will axiomatically result in a destruction of value to the extent that more money comes from somewhere or the receivers come in.   Inflexible management by mantra often exposes managers for what they are.

Hywood then introduced Comical Adam to shareholders:

Radio turnaround

One of Comical Adam's staff wrote to the RadioInfo website yesterday "to provide an update on the turnaround that's underway in our radio business" as well.  

The person who wrote to RadioInfo sounds truthful, sincere and concerned.   I've never heard Comical Adam do that.

2ue survey 5
Greg Hywood didn't talk about the haemmorrhaging money, or the loss of advertisers. Neither did Comical Adam.

But the money problems can be fixed.   What can't be so easily sorted is the station's soul.  Or the station's relationship with people who used to believe in it, who used to think that 2UE was on their side, the side of the little guy who otherwise wouldn't have a voice.

That's the greater vandalism and it might not be able to be fixed.   2UE management don't even see the problem.   It's the reason that they're rating 3s.   I suppose they think that a multi-platform technology agnostic take away the number you first thought of with fries will fix it after it's outsourced or something.

When my dramas with 2UE's were coming to a head I had a lot of very real people come out of the woodwork and ring up my show.   None of them spoke about evolving digital platforms.   They just wanted the truth.

Here's one, Don Tait - a Vietnam Veteran.   Every tortured step Don take reminds him of the VietCong machine gunner who cut him in half when he was 19.   But Don got to keep his manhood and the freedom to express how he felt about 2UE.

That afternoon Bob Kernohan was in the studio with me.   We had recorded a further entirely innocuous interview about The AWU Scandal that Thursday morning which had been approved - again - by 2UE's external lawyer Bruce Burke who acted on my instructions making me his client (I know I am a bit slow on the uptake, only taken 2 years to realise that).

That further interview got the kybosh by the management genii just before airtime.   As the gentle and kind and terribly hurt man Bob Kernohan sat in the studio with me as my guest, and as Fairfax managers strode up and down gesticulating outside the studio glass, talk radio in Sydney produced one of its finer moments when a young and proud daughter used the platform to help the world to get to know her dad.


One of the things I treasure most is a manila folder of emails and letters that listeners sent to me when I announced the visionary move to go and work for 2UE after my time at 4BC in Brisbane.   It contains hundreds of stories from real people about why they listened.   None of them wrote about evolving platforms that deliver................

Today there will be a witch-hunt at 2UE as the IT manager is given the task of tracing the email system to try to find the guilty bastard who wrote to RadioInfo.   Every word I write here will be pored over by some legal type looking for a cause of action against me.   The tragic thing about that is those actions will be couched in terms of "Protecting Fairfax Radio's Reputation".

Here is a link to Comical Adam's presentation to the owners of 2UE, it starts at about page 85.

Tragedy one
It is like shooting fish in a barrel to poke holes in this flimsiest exposition of corporate strategy I can recall seeing.  It displays a wanton absence of understanding of what the business's real drivers are that is breathtaking.   You can't help but feel a bit sorry for the poor man who has to go in to work every day with that abject display of his dissasociation from his business on display.

2UE needs to address the fact that it made a major error, a very serious error by publicly advertising its support for and promotion of Bob Kernohan and his unwavering story - only to then capriciously withdraw its endorsement of the truth of what Bob had to say and switch its support to one of the suspects in the frauds, Julia Gillard.   2UE got that call wrong.  Its decision hurt Bob Kernohan and his reputation terribly.   2UE can't heal its relationship with its listeners until it admits its error, apologises to Bob and starts to rebuild its credibility.

In the interim, we'll listen to 2GB.