Billionaire Stokes family retakes control of Seven

Billionaire mining and media scion Ryan Stokes is the new chairman of the company that owns the Seven Network along with The West Australian and Triple M, becoming the fourth person to hold the role since the corporation was created via a merger at the beginning of the year.

Stokes’ father, Kerry, stepped down as chairman of the company in February after engineering the merger of his TV and newspaper empire, Seven West Media, with radio company Southern Cross Austereo.

It has been a tumultuous start for the merged company. A number of executives from the Seven side of the business were ousted before the Stokes family took back control in a series of moves culminating in Monday’s announcement that Ryan Stokes would succeed Teresa Dyson, a longtime family associate, as company chair.

The longtime controlling shareholders of Seven had their control of the company halved in the deal. Two weeks ago, the Stokes family bought back into the company for the first time since the transaction, with their Seven Group Holdings entity – which also owns mining equipment company WestTrac and machinery hire firm Coates – upping its stake in Southern Cross from 20.2 per cent to 23.2 per cent.

Ryan Stokes is also chief executive of Seven Group, and while he has been a director representing the group’s shareholding for some time, it is widely known that he does not share the same love for the family’s media assets as his father.

Alongside the Seven Network, the company wields significant influence in WA through West Australian Newspapers, located where the Stokes’ mining business largely operates. The company also owns the Triple M and Hit radio networks, and the LiSTNR digital audio platform.

Less than a year ago, the companies announced the deal which would result in Kerry Stokes retiring, Southern Cross chair Heith Mackay-Cruise taking over as chair of the combined company, and Seven boss Jeff Howard stepping in as chief executive. All three have since left the company’s management team and board, and the company is expected to formally rename itself under the Seven banner in the coming months.

As part of that deal, and by ceding control of Seven, the Stokes family reportedly extracted about $180 million in tax benefits based on the losses it accrued over the course of the family’s ownership. But just over six months later, the family has re-emerged as the power behind the board, and in another six months, they could effectively control it by taking their shareholding beyond 25 per cent.

Dyson will remain on the board as an independent director, but there was no room in Monday’s announcement for former Stokes lieutenant Bruce McWilliam, who has emerged as a major shareholder with the financial backing of another Perth-based billionaire, Gina Rinehart.

McWilliam is expected to continue building his share in the company, with the Stokes family unable to creep up the register again for another six months due to corporate law.

Ryan Stokes said the board’s focus would be to support new chief executive Rohan Lund to deliver on the company’s potential.

“The board is united on building a stronger, higher-performing group and on returns for all shareholders,” Stokes said.

Cathy O’Connor, who led Lachlan Murdoch’s Nova Entertainment radio company for almost 20 years, and was recently chief executive of outdoor media company oOh!media, was also elected as lead independent director. She said the board had established her role, a majority of independent directors, and independent directors of its committees to ensure good governance.

“We are satisfied the board has the independence it needs for the phase ahead,” she said.

Shares in Southern Cross are down 26 per cent since the start of the year, and fell by 1 per cent on Monday after the market was informed of the board changes.

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