Why Hasn’t Sony Music Australia Hired a New CEO Yet? (Opinion)

Denis Handlin exited Sony Music Australia June 21, 2021. As of writing this, we are 11 months on and Sony still hasn’t appointed a replacement, so the question is: why the fuck not?

In September of last year I wrote an op-ed titled ‘Sony Music Australia’s path out of turmoil’. In the piece, I noted that if Sony Music Australia’s business didn’t rebound—and rebound quickly—the ones that would suffer most would be the artists signed to their label, particularly those who just signed longterm deals right before shit hit the fan.

Nearly a year on since Handlin’s sacking, that prediction seems to have come true.

Denis Handlin

I have spoken to a number of artist managers who have artists signed to Sony, and all but one have reported a significant drop off in speed, communication, proactive strategy and budget level approvals. It could be said that Sony is, by multiple reports, a disaster for some artists right now.

I want to be clear, there are a great many talented professionals who work at Sony Music, but even the best would feel underwater at this moment with exit after exit and no new (or little) hires to help. It’s telling that the one artist manager who had nothing but good things to say about Sony manages what would be one of Sony’s highest-earning domestic artists.

Maybe the team that is left in the Australian office only have enough bandwidth to manage a few key relationships effectively. This is not surprising.

One question that comes to mind is: who is approving budgets these days? TMN can’t seem to get a straight answer; it seems to be a mix of budget approvals coming from either Gordon Pitt or direct from NY depending on the ask or the artist, and most managers are confused as to why the most trivial costs are currently no longer being approved.

This is concerning, to say the least.

Sony Music seem to be subtly indicating that they are close to a hire, which I hope is true. Although no individuals or Sony have confirmed this with us directly, sources have told TMN that Kim Boshier (Sony Music MD of New Zealand) has done a number of interviews for the role. Sources have also told us Sony is looking to hire a woman from outside the Australian music industry, albeit close to it.

Kim Boshier, MD Sony Music Entertainment (New Zealand)

If not Boshier, Jennie Sager and Jane Huxley come to mind when thinking about this hiring brief, with speculation in the biz that both could be on the list of potential candidates.

Regardless, we are still met with the same question: Why the fuck hasn’t Sony hired an Australian CEO yet?

There are four possible reasons for the delay:

1. They had little visibility of Australia for 38 years

From an operational point of view, I’m not sure how much Handlin was able to hide from Sony’s head office. Did they ever audit or care about every line item of cost? Unlikely.

My guess is that over the 38 years Handlin held the top position, there were costs and liabilities that crept into the business that might have grown to staggering amounts.

Whether they were simply bloated salaries of underperforming and loyal executives , or excessive luxuries that were not operationally required or helpful to run a record label, only Handlin and the NY head office know the extent of the surprises here. Whatever the case, if NY didn’t have visibility (or turned a blind eye) to a lot of unorthodox costs or liabilities, it would take some months to both fully discover and deal with them before they could appoint a new boss.

This doesn’t even factor in the HR tension. Who at Sony was actually adding value vs. just operating as one of Handlin’s cheerleaders?

Perhaps the NY office wanted to deeply understand every player at Sony Music Australia so they could know who to exit, who to keep and who to promote before they threw a new boss into the deep end.

This strategy might be the kindest for the new boss, however it will rob them of the opportunity to come in and make the assessment for themselves. A new boss coming in to make swift but meaningful changes would be an incredibly effective statement to both the industry and their staff as to what Sony Music 2.0 will stand for. Maybe, Sony HQ is robbing their future Australian CEO of this opportunity.

2. A strategic economic EBIT decision

There is a commercial incentive for holding out on replacing Handlin for as long as possible.

Sony is likely saving $10-$20mil per year with the exit of all the recent executives and the inactivity on new signings. Have Sony made less revenue during this time? Hell no. Gang of Youths, The Kid LAROI, and Amy Shark are still releasing records and doing big numbers, and their significant back catalogue (Adele, Beyonce, Lil Nas X et al) will still stream millions daily whether there is a new boss at the helm or not.

From the P&L perspective, the operating profit of Sony Music Australia might be looking the best it has in the company’s entire history. So it stands to reason that if Rob Stringer is on a bonus structure of global profit, holding out a year or two before re-starting an investment in Australia would be very fruitful for both him and Sony shareholders in the short term.

Rob Stringer

The less cynical perspective would be that there were undoubtedly enormous redundancy and exit packages paid to not only Handlin but the many other senior staff that left Sony. Maybe this killed the Australian budget for a year or two and we just need to sit and wait for the P&L to recover.

3. A PR strategy

During the announcement of Handlin’s exit, Sony Music was being crucified at almost every dinner table, tabloid and news show. Their alleged sins were horrific, it was not only a dramatic time in the company’s history but also drove significant traffic and boosted ratings for media.

If Sony acted quickly, it might have kept the story and interest going for longer, it may have put the new boss under greater scrutiny and judgement.

Perhaps Sony’s PR strategy is to simply bore us to death, and intentionally become irrelevant over the next year or two before they hire a new boss who can then re-build the company in a less tense and watchful environment.

4. Lack of urgency and priority

The last possible explanation is the one I sincerely hope isn’t the case.

Perhaps the first three reasons outlined above are simply giving Sony’s head office too much credit, it might just be that they simply just don’t care about the Australian territory enough to act quickly to ensure this market doesn’t miss a beat.

Only Stringer and his peers would know if this is true.

It should be mentioned that there are winners to come out of the fact that Sony Music Australia currently has no leader. Those are the two other majors (Warner and Universal) as well as the larger independents (Mushroom, Unified, BMG, Chugg Entertainment/City Pop and PIAS).

Why? These labels have one less competitor with deep pockets to bid against them when artists are looking for a home. One less formidable adversary in the weekly chart race, and one less executive with an over the top personality to think about.

The ones that lose are the artists; both the artists signed to Sony presently, and those looking for a new home with one less bidder in the market.

One thing is clear: the territory needs a vibrant Sony Music Australia comeback.