Gordon Campbell on Rick Ellis as Te Papa’s new CEO   24 Nov 2014

Gordon Campbell

The recent appointment of former TVNZ boss Rick Ellis to head Te Papa has copped a fair bit of criticism.

Much of it has been inspired by the suspicion that Ellis has been hired to pursue the same purely commercial goals as he did at TVNZ, while similarly neglecting the serious cultural side of his mandate. True, it is pretty easy to lament the crass commercialism of the national museum, and all too regularly, Te Papa’s actions have begged to be mocked.

Given his track record then, there are good reasons for concern that Ellis is likely to become part of the problem, rather than part of the solution.

That said, the similarities between the plights of TVNZ and Te Papa are striking, which could explain why Ellis got the job. In both cases, the mass market for what’s on offer is fragmenting, and the “free entry” audiences for both state television and the national museum are now firmly on the downward slope. There are too many other competing venues / forms of entertainment, and neither TVNZ nor Te Papa have chosen to compete on the basis of quality, lest they lose the ratings game by which their success has traditionally been measured. Nearly 15 years ago, James Munro, then one of Ellis’ top lieutenants at TVNZ, put the problem facing the state broadcaster in terms still relevant to Te Papa today :

There is little point in producing the best public service content in the world if no one watches it. [Munro cites the ABC and BBC as examples of quality broadcasters with minimal and/or declining market share] The BBC have realised that rather than sit back and bleed their audiences to others, they need to create fragmentation themselves, with new digital channels of content and a well developed online presence….TVNZ has now reached the point where a major re-structuring is necessary in order to keep its head above water, and give it the freedom to develop in these new areas…

Ellis has plainly been hired to enable Te Papa to expand into those digital areas – both to stimulate business opportunities, and to reach new and different audiences. Te Papa chairman Eric Williams said as much in announcing Ellis’ appointment.

At state broadcaster TVNZ, where he was chief executive for 10 years, he led the introduction of digital channels and the push into on-demand online and digital content services, Williams said…..."His extensive background in digital media offers so much to Te Papa as we extend beyond the walls of our buildings.”

Right. The big question is how many of its scarce eggs that Te Papa (already under pressure from falling visitor numbers and other internal ills) should now choose to put in the digital basket. Fifteen years ago, digital did seem like a possible lifeline for ailing media organisations. Bitter experience has shown that online revenues simply do not – and perhaps cannot ever – replace the old revenue streams. At best, digital media is a useful niche, a business adjunct to what Te Papa currently does – but equally, it will have significant establishment costs that will drain resources from other areas, and for relatively minor returns. In that respect, Ellis may well embody yesterday’s solutions for tomorrow’s problems.

Such concerns are unlikely to be eased by Ellis’ recent experiences in Australia at Telstra. Ellis certainly entered the fray across the Tasman with a flourish in this report in the Australian newspaper:

During his time with NZTV, he was credited with softening internal opposition to the digital push and ending an era of dysfunction.

By early last year, Ellis was being hailed as being well on his way to ‘mini-mogul’ status within Telstra.

Rick Ellis, 58, is expected to make a far bigger splash in the months ahead, running Telstra Media like a true media business, focused on content and audiences, rather than as simply an add-on to attract telephone customers.

“At the end of the day, my job is to lead a business that is going to grow - and grow dramatically,’’ says the former Television New Zealand chief executive, who has been head of Telstra Media for just over a year.

Mr Ellis is already regarded as something of a mini-mogul within Telstra…..

Yet, barely 12 months later, Ellis had suddenly exited from the company:

Rick Ellis, the head of Telstra's $2 billion-a-year media business, is leaving the telco giant after only two years in the role. Mr Ellis, a former Television NZ chief executive, will finish up at Telstra in the next two weeks. Mr Ellis's premature departure will come as a shock to watchers of Telstra…..The New Zealand native was brought into Telstra to transform the telco into a digital media business after a successful stint at TVNZ where he revived the broadcaster with the introduction of digital channels and a push into online catch-up TV.

Since joining Telstra, Mr Ellis has bolstered the telco's command of digital media assets…..But while control of content rights and T-Box sales have grown, the media unit's financial performance has dragged…

Clearly, Ellis’s track record at Telstra was a mixed bag, at best. Some would say the same of his two separate stints at TVNZ, during which TVNZ – partly as a result of political decisions beyond Ellis’ control – clearly lost the battle with Sky for dominance of New Zealand’s digital TV market. What was really striking about Ellis’ initial term (1998-2002) at TVNZ was the steep rise in top executive salaries that occurred on his watch. This may be of interest to staff at Te Papa, which probably can’t expect to make much in the way of savings – under Ellis - in this area. To grasp the full picture, some background on New Zealand’s experience of executive salary escalation at the state broadcaster is necessary.

Briefly…..back in 1990 news presenters Richard Long and Judy Bailey were reportedly receiving $65,000 and $80,000 a year respectively. By 1994, Paul Holmes’ TVNZ/RNZ joint deal was reported as being worth around $250,000. At that point, bear in mind that TVNZ mysteriously failed in its duty to re-register under the Companies Act 1993, for three whole years. When daylight broke again in the 1996 annual report, one employee – almost certainly Holmes - was receiving between $710,0000 and $720,000, while another employee – believed to be Chris Anderson, Ellis’ predecessor as TVNZ boss – was earning between $420,000 and $430,000. The escalator was up, and running.

Interestingly by 2001, the top earner salary (Holmes) had only inched forward to the $750,000-$760,000 band. But the real advance had been by the next on the ladder ( believed to be Ellis) who was breathing right down Holmes neck on the $720,000-$730,000 salary band. In the 2002 annual report it was also noted that there had been a payment to a former employee ( widely assumed to be the just-departed Ellis) of $850,000 – $880,000.

Clearly some of this massive salary escalation was due to the corporate culture of the 1990s, where big pay packets served as self-validating symbols of potency for the senior executive class. It was however, during Ellis’ initial term with TVNZ that de facto“internal relativities” were forged between top presenter salaries and top executive salaries, even though the “market” within New Zealand for the expertise of some of the individuals concerned was so small as to be almost non-existent.

Ironically it was only under Ian Fraser, Ellis’ immediate successor as TVNZ CEO ( before Ellis returned for second term, 2006-2011) that a political furore broke out about excessive presenter salaries at TVNZ. Bit of a joke, really. The subsequent quest for moderation was led by executives sitting on salary whoopee cushions that those same presenters had helped to inflate for them. What I’m getting at is that on his track record, Ellis is unlikely to be a team leader for salary cutbacks among top executives at Te Papa, as one way of righting the ship. Nor is his vaunted digital expertise likely to result in digital media and digital outreach being anything much more than a little niche earner, on the side. The core challenges facing Te Papa are not amenable to being solved by digital technology, alone.

Nor is Ellis perhaps the leader for a wholesale culture change. By and large, his work record has been atop relatively mature enterprises where – at best - he has been able to staunch the bleeding for a time, before moving on. That is a useful ability, but not a crucial one. If Te Papa is looking for a change manager able to chart a dramatically successful new course, it will probably have to look elsewhere.

If Paul Rudd was Roger Sutton

Judging by reports, Roger Sutton seems likely to approach the 2001 movie Wet Hot American Summer non-ironically. Still, when it comes to accepting personal responsibility for his actions, Sutton’s press conference performance did remind me of this classic scene:

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