Less than a year after a radical reorganisation at Rupert Murdoch’s Asian TV business, viewed at the time as a result of a power struggle between departing India chief Peter Mukerjea and COO and Star
Entertainment president Steve Askew, three-year CEO Michelle Guthrie has surprisingly opted to leave. Replacing her is Paul Aiello, a former investment banker who joined the company as Star president in April last year.
After rampant speculation, meanwhile, Mukerjea and Star Entertainment India CEO Sameer Nair have also confirmed they will leave — a body blow for the country’s most successful broadcasting network, reportedly responsible for 80 per cent of Star’s regional revenues.
Their departures come after Mukerjea split leadership duties with former India COO Sameer Nair in last year’s reshuffle.
Nair, in particular, has been persistently linked with a new entertainment venture at NDTV, which partners with Astro, a Malaysian broadcaster with aggressive regional designs.
Aiello’s own ascension is viewed by many as a signal that the company remains focused on growth, given his background leading Morgan Stanley’s telecom, media and technology group across Asia-Pacific.
“Any observer would wonder if, consequently, there would be more M&A activity,” says one analyst familiar with the company.
“The interesting areas are whether India management will change, whether it makes changes to programming strategy in India and whether it becomes more deal-oriented in terms of acquisitions.”
Star became profitable in Asia in 2002, but the last year has seen its India share dip in the face of strong competition from Zee TV. With Astro eyeing the sub-continent, any tremors in Star’s India operations will reverberate across its entire regional network.
“Financially, India is critically important, to the point where it would be nice if it were less important by growing other areas,” says the analyst.
Adds MindShare Asia-Pacific CEO Ashutosh Srivastava: “They are vulnerable at this time...and the leadership vacuum can hit them very hard at this stage.”
In China, of course, Star — like many foreign TV players — has found the going tough, despite Murdoch’s well-publicised overtures to the Chinese Government. The company formed an alliance with China Mobile last year, an increasingly common route for broadcasters looking to invest in Chinese media — but real progress in the Middle Kingdom remains elusive, despite the success of Mandarin-language channel Xin Kong in Guangdong province — ranked the number one regional channel in that province according to CSM.
Adding to the intrigue at Star is the arrival of highly-rated president of platforms David Butorac from Astro — widely credited as being the key figure behind the Malaysian player’s phenomenal growth in recent years; crucially, he also brings expertise in distribution and platforms — areas where Star is often perceived as being relatively weak.
Star’s joint-venture with Tata Sky in India, in preparation of a DTH rollout in that country, may be the first stage of this evolution. Other promising signs exist in Indonesia, where the company has bought a 20 per cent stake in national network ANTV.
“Whenever Murdoch hires a CEO, he also hires a shadow CEO,” quips one Star insider. But the management reshuffles do not necessarily inspire confidence in either advertisers or media agencies, particularly given the frequent changes in Star’s sales teams.
“The main drawback is the inconsistency in the sales team, where the turnover is comparatively high,” says MindShare regional unit business director Doris Kuok. “For media agencies, the dialogue is not as smooth as with other broadcasters in the region.”
Michelle Guthrie's reign at Star
2003
• Michelle Guthrie succeeds James Murdoch as Star CEO
2004
• Star inks joint venture with Tata to launch a DTH platform in India
2005
• Jamie Davis departs Star China to become MD of ESPN Star Sports
• Star buys 20 per cent stake in Indonesian network ANTV
2006
• Resuffle sees Steve Askew named group COO and Star Entertainment president. In India, former overall CEO Peter Mukerjea splits leadership duties with former COO Sameer Nair.
• Paul Aiello joins Star as president from Morgan Stanley
• Star forms strategic alliance with China Mobile
• Tata Sky launches Indian DTH platform
• David Butorac joins from Astro as president of platforms
• Jack Gao named CEO of Star China
2007
• Guthrie resigns, succeeded by Aiello as new Star CEO
• Star India leaders Mukerjea and Nair confirm departures from network
