Media industry reacts to Sly Bailey's exit
Sly Bailey's exit from her role as chief executive at Trinity Mirror after 10 years at the publisher has surprised few in the industry, as the embattled chief executive has faced mounting criticism over her remuneration while the publisher continues to shed jobs.
Lorna Tilbian: executive director and head of media at Numis.
Here two City analysts and one media buyer offer their opinions on her exit.
Lorna Tilbian, executive director and head of media at Numis.
"In this age of austerity, there is a pervading mood in the City that pay should be linked ever closer to performance and if management does not deliver ,then it has to pay the ultimate price. In truth, it was ever thus – high risk/high return.
"In the case of Trinity Mirror, the odds were increasingly stacked against Sly. Trinity Mirror ticked all the wrong boxes – structurally challenged in the digital age; cyclically vulnerable with the economic downturn; carrying a sizeable pension deficit; net debt on the balance sheet limiting flexibility; a low rating precluding any transforming acquisitions to drive growth, and a totally UK-centric business with no exposure to any growing international markets.
"Given this negative backdrop, the only way Sly could have survived shareholders' ire over falling shareholder value – which began with the ill-fated buy-back where cash that should have been invested into growth areas was returned to a minority of shareholders to curry short term favour – would have been to share the pain, but then maybe that would have been too painful for her!"
Liam Mullins, media buyer at the7stars.
"As the applause dies down from the shareholders at the announcement of Sky's imminent departure, the media industry should also welcome this move. The UK needs strong newspapers, and the Mirror has had years of cuts, redundancies and lack of investment in the products.
"At 45p, the Mirror is the most expensive red-top, loved by over a millions loyal readers, but Trinity needs to invest further in developing their digital product (3am and mirror football are great examples of this) and in the product itself – most noticeably the supplements.
Alex Degroote, media analyst at Panmure Gordon.
"On the back of sustained scrutiny of remuneration at Trinity – and UK plc in general– it is not a big surprise to us that Sly Bailey is leaving now. Even though she bought a few shares in the company a couple of weeks ago. Trinity – and newspapers in general – are in a much weaker climate now than when she took over.
"This impacts everything – headcount, cost, and management pay-and-performance expectations. It will be fascinating to see who replaces her. Investor expectations of Trinity are already low. And Leveson is an overhang for the near term. Going forward, senior management remuneration will be much more clearly aligned to shares, rather than cash.
"Sly has actually done really well on Trinity profit protection through the downturn, but she hasn't really rounded out any medium term investment case for the stock market."
Follow John Reynolds on Twitter @johnreynolds10
This article was first published on mediaweek.co.uk
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