Love and loyalty cost Fellet at Sky TV
If John Fellet had decided to leave Sky TV five years ago he would have walked away with a reputation as one of New Zealand’s most successful CEOs.
His decision to stay and then this week announce he is finally quitting after 17 years will see him exit with a tarnished legacy.
The commentators’ assertions he was slow to react to new competitors and didn’t understand where digital technology was heading will hang over his head.
He deserves better.
With the Sky/Vodafone merger falling through and his share price falling and falling, Fellet didn’t have a choice. He had to call time.
Until lately, the ex-pat American was regarded by most people in television as super smart – a cunning and canny operator. So why didn’t he see the likes of Netflix, Apple, and Lightbox coming? Why didn’t he go before the rot set in?
After all, it wasn’t like these guys snuck up on him - and he certainly didn’t need the money.
There are two things that might have skewed judgment of television’s top dog – Love and Loyalty.
Love is not a word many of his competitors would associate with Fellet. To them, he was a hard, unemotional and almost dour character.
When former bosses of TV3 and TVNZ decided to gang up on Sky over rugby rights, Fellet was like an All Black enforcer who feels a tug on his jersey at a lineout.
He knew what was going on and sorted it quickly, quietly and ruthlessly – no one came back for a second go.
In 2005, he bought Prime from its Australian owners for $30 million dollars and moved the rugby rights from TV3 to his own channel.
It was a bad day for the company that is now Mediaworks.
Not only did it lose the free-to-air rugby rights but Prime, which probably would have gone out of business, became a serious player in the market and hurt the profitability of the big guys, particularly TV3.
Every TV exec knew that you messed with Fellet at your own peril.
He never came out on the wrong side of deal.
If he didn’t win, there usually was no deal.
Ironically, Fellet operated a bit like the giant American tech companies do now. He wasn’t overly worried about profitability while he built up a big customer base in the early days.
Shareholders were patient and Fellet, in the end, rewarded them handsomely after he had scooped up half of all New Zealand’s households as subscribers.
When the likes of Netflix started to turn the screws on Sky, instead of cutting and running he stayed. Why? Because he loved the company. This was his company. He was the undisputed boss. He had built it up from a baby into one of the country’s biggest and most successful corporates.
He was Mr Television. He loved the industry and he loved Sky.
Fellet would have felt it was his duty to stay and fight. Leaving on a high would have been an act of betrayal in his eyes.
He would have known the chances of staving off Netflix with its much more cost efficient internet delivery of high quality product weren’t good.
Yes, he could have cut the cost of subscriptions earlier but the lost revenue may have been a worse outcome for shareholders and wouldn’t have stopped a chunk of customers leaving anyway.
Fellet was caught between a rock and the harsh reality of global behemoths that will eat you, no matter what.
Not helping was a trait that his staff admired him for – loyalty.
Fellet is known for his tremendous loyalty to the people that work for him.
While he can appear to have a gruff manner at times, Fellet’s colleagues will tell you he is warm and welcoming.
His office door is genuinely open, and not just to foster the image of an engaging boss.
When the big software upgrades were badly bungled at Sky and did irreparable damage to the company’s brand, heads would have been expected to roll – they didn’t.
This happened more than once. Fellet gave his team reprieves they would not have been afforded elsewhere.
And where were the innovative ideas that could’ve helped Sky take it to the competition? There was a need for fresh thinking at Sky and Fellet couldn’t be expected to do it all on his own.
Christoper Luxon, Simon Moutter and Rod Drury who run some of our most innovative businesses (Air New Zealand, Spark and Xero) are hardly solo operators.
Fellet seemed slow or unwilling to rejuvenate his executive team. He was loyal to a fault.
So where to now for Fellet?
He once told a reporter from the Sunday Star Times he knows only two things “pay tv and baseball”.
But he was selling himself short – John Fellet built one of New Zealand’s most profitable businesses and while its image may have taken a hammering, Sky’s coverage of sports events is world class.
Still in his mid-sixties, Fellet could bring valuable skills and experience to many of our boardrooms – more than a few of them would benefit from a little bit of love and loyalty.
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