Sky chief executive Martin Stewart is leaving the company to return home to Europe after just 21 months in charge, the company said in a market filing this morning.
Stewart's abrupt departure has "accelerated the company's succession planning process and Sophie Moloney, Sky's current chief commercial officer, has been appointed chief executive, effective immediately", the company said.
The former Sky UK executive's unexpected departure comes as he was in mid-flight with two of the most dramatic changes for Sky TV NZ - the launch of Sky Broadband in the New Year, and a new, Android-powered set-top box that would allow Sky subscribers to install third-party apps such as Netflix and Amazon Prime Video, too.
Stewart recently told the Herald it was "only a matter of time" before Sky launched a mobile phone service, too. His vision was it to transform from a "mono-product" company to a "multi-service" company, using the lure of cheap telecommunications services to keep customers loyal and attract new subscribers.
It was also a surprise in that Stewart had just recently bought more shares in Sky. A September 11 filing disclosed he had raised his stake from 1,036,000 to 1,286,000 shares as he picked up 250,000 shares worth around $37,500. A spokeswoman confirmed it was an on-market purchase, not part of any bonus or other compensation scheme.
Stewart cited the "likelihood of further Covid-19 border restrictions" for his decision to depart. The departing CEO told the Herald it felt like a good time to depart after driving through two years of change, and a pause before his company's push into broadband next year. But it was also a factor that in his first year in the job, he was able to travel back to the UK, where his varsity-age children live, a number of times. The pandemic put a stop to that in 2020.
He declined to give an exact timeline between his decision to leave and today's announcement but did offer "It was a short period of time. It obviously takes at least a week or so to organize these sorts of things. The reason why we've been able to move so quickly is because of the fact that Sophie's an excellent replacement and was just sitting there waiting to take over." He did not have a new position lined up.
The pay-TV broadcaster recently upped its profit guidance, and analysts have generally given Stewart high marks for his digital-first makeover, and quick moves to replace nearly every senior manager employed by his predecessor, the long-serving John Fellet.
But the Englishman was unable to reverse Sky's long-term share slide. He secured a new five-year deal for top-tier rugby, only to see the sport upended by Covid and South Africa's Super Rugby rebellion. Spark Sport continued its incursion, grabbing domestic cricket rights. And although Stewart expanded streaming service Neon, the challenges of over-the-top content were illustrated when Disney pulled its Sky channels to make way for the direct-to-consumer Disney+.
Sky shares closed at 17c yesterday. The stock is down 63 per cent for the year. The failure of investors to show any love as Sky forecast a return to profitablity, and various reform measures, was a constant source for frustration to Stewart. He told the Herald on October 13 that Sky shares were "materially undervalued".
Shares were down 5.95 per cent to 16c in early trading today following the announcment.
Moloney is the first woman to be appointed to the position in Sky's history.
"She brings deep international media experience with an impressive 20-year track record, including roles with Sky New Zealand, Sky UK, Sky News Arabia, Abu Dhabi Media and OSN," Sky chairman Philip Bowman said. At Sky UK in the 2000s, then OSN in Dubai the following decade, Moloney worked with Stewart.
"Sophie has performed outstandingly in a wide range of commercial, legal and strategic roles and has the unanimous support of the board," Bowman added.
"Sophie's recent achievements include securing the commercial agreement with Spark to secure Rugby World Cup Rights for pubs and clubs around New Zealand, leading the team that secured New Zealand Rugby and Sanzaar rights, negotiating the new Optus satellite agreement and spearheading Sky's purchase of entertainment streaming service Lightbox."
Bowman said that since joining Sky in February 2019, "Martin Stewart has led a successful turnaround and the board acknowledges his significant contribution".
"Despite an exceptionally challenging year in 2020, the business is well-positioned to achieve its strategic priorities of strengthening our core satellite business, growing streaming services, delivering broadband services and securing the rights to bring the best of sport and entertainment to our customers.
"The board respects Martin's decision to leave and is pleased we have been able to reach a mutual agreement for him to do so. We thank him for his significant contribution to Sky."
The departing CEO said, "I am grateful to the smart, dedicated team at Sky who have worked with me to transform our business and navigate the challenges of Covid-19. The likelihood of continued border restrictions has contributed to my decision to return to Europe, but I am proud of what we have achieved together in the last 21 months. I wholeheartedly thank the Sky team for their support."
Vodafone NZ chief executive Jason Paris paid tribute to Stewart on social media, posting, "A great leader, risk-taker, innovator and passionate supporter of sport and New Zealand - but most importantly, a family man first. You will be a loss to the business community."
Paris will likely be pleased with Moloney's initial comments to the Herald too. Where Stewart said it was "only a matter of time" before Sky moved in mobile, Moloney described mobile as more as a possible option, if it proved valuable to customers. Similarly, the new CEO said plans for a Vodafone TV-style Android box were not set in stone.
Stewart told the Herald that he had no plans to sell his Sky shares. He had told the board to "prepare for a series of letters from retail investor M. Stewart," he joked.