The Nine Network has started
battening down the financial hatches, a move that’s led to the most
significant change in senior management since David Gyngell became CEO
a year ago. Chief operating officer, Mick Morris has gone on “leave”
(he’s not expected to return) and has been replaced by former Seven
Network head kicker, Ian Audsley.

Morris’s “leave” was
announced on Tuesday and an announcement went up on the Nine intranet,
only for it to be withdrawn a day later, with no explanation. Audsley
has a reputation as a ruthless toe-cutter who took a hard line in cost
cutting at Seven, transferring people without due process, being
ruthless in his use of redundancy and at one stage even barring the
door at Seven to prevent employees from working.

Many of the
staffing changes he and Aspinall made at Seven have now been reversed.
Morris has officially gone on leave to look after his ill parents, but
he told friends at Nine that he felt let down by management and was
tired of being the fall guy for the hacking and slashing of staff and
spending.

Now all discretionary spending at Nine has been
banned. No restaurants, all entertaining to be done in the Nine dining
room or boardrooms, no pay rises, and there’s now a very heavy hand on
incidental costs (parking, etc). Stories requiring overseas and
interstate travel are being strictly rationed. There is now a weekly
meeting at which David Gyngell, chief financial officer Brent Cubis and
Ian Audsley review every bit of planned spending and chop accordingly.

Nine’s
costs rose by 7.2% in the first six months of the year, while ad
revenue rose only 8%. Ad revenue growth has slowed even further in 2005
as companies pull back campaigns and as advertisers pressure Nine over
its failure to deliver promised ratings, a direct result of Seven
moving past Nine to number one in the ratings battle.

With ad
revenue growth expected to slow to between 5% and 7% this year, Nine
decided at its management conference last month to restrict spending on
programs to the prime time shows wherever possible. News and A Current Affair
have been told to watch their spending more closely but as they are
both in a desperate battle with Seven, the constraints are not as
tough.

Audsley, who comes from Nine in Melbourne, was
appointed in early 2003 to be second in charge to Paul Waldron. He’s
known around Nine Sydney and Melbourne as a “John Alexander man” a
reference to the PBL CEO and former head of PBL Media. He was hired at
Seven by the former CEO, Julian Mounter and then moved to Melbourne. He
was part of the cost cutting regimen of David Aspinall, who was chief
operating officer of Seven network until he fell out with the board
last year and then went on six months sick leave. Aspinall is currently
working for one of the private companies of Seven chairman, Kerry
Stokes.

Audsley was hired by Morris, at the instigation of
Gyngell and John Alexander and the feeling at Nine is that he’s come to
Sydney to lead some savage cost cutting.