Mediaweek Roundup: Harold Mitchell, AAP, Google, 3AW, NRL + more

• Regional broadcasters, John Hewson, COVID-19, Gourmet Traveller Wine, Kangaroos v All Blacks, and AFL

Business of Media

Harold Mitchell breached director duties but judge roasts ASIC

A Federal Court judge has found former Tennis Australia director Harold Mitchell breached his duties as a director, but ruled the corporate regulator failed to back up conspiracy theories in its case against him and the sporting body’s former president, Stephen Healy, over the decision to award Seven West Media broadcast rights to the Australian Open in 2012, reports The AFR’s Max Mason.

Justice Jonathan Beach dismissed the Australian Securities and Investment Commission’s case against Healy and “only narrowly” ruled in the regulator’s favour against Mitchell, stating he breached his duties as a director three times, but “rejected the balance of its case”.

Justice Beach suggested Mitchell face a financial penalty, but unlikely a ban from being a company director.

Justice Beach wrote that upon analysing the evidence, Tennis Australia’s deal with Seven was anticipated as a good one for the sporting body.

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How media’s quiet achiever helped save AAP

Former News Corp and Foxtel CEO Peter Tonagh is the public face of the against the odds effort to remould the 85-year old AAP organisation founded by Keith Murdoch, which was in intensive care and poised to go under before the late emergence of the consortium, pulled together by sustainable investment manager Nick Harrington and philanthropist Dr John McKinnon, reports The AFR’s Max Mason.

On August 4, AAP 2.0 or Acta Diurna AAP as it will be known, begins its new life. Some hard decisions have been made to let go of a little less than 100 staff to keep costs down as it attempts to make the transition to a financially viable model in a few years.

The new AAP faces life without its main sources of revenue of more than $10 million per annum from former shareholders News Corp and Nine. To buy AAP, the consortium raised funds from a set of impact investors – those aimed at investing in businesses that make money and also provide a social good –to help the newswire in the short-term.

Tonagh said his motivations for getting involved with AAP were saving journalists’ jobs, the importance of diversity of voice in the media, and fostering entrepreneurial start-up style media businesses.

“We’re very adamant that this is not a philanthropic venture. We want it to be a not-for-profit, but that doesn’t mean it doesn’t need to be able to pay its own way. Ideally, we’ve got this transition period where clearly we’re adapting to a different business size,” he says.

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Google threatens to dump Google News in Australia

Google has refused to rule out axing its Google News product in Australia, a move that could allow misinformation to thrive unchallenged on its platform and allow rival tech companies to swoop in and steal market share, reports The Australian’s David Swan.

Tech giant Google could walk away and remove its news offering in Australia altogether, as it did in Spain in 2014 when forced to pay publishers there.

Google’s Australia and New Zealand managing director, Mel Silva, said in an interview with the ABC on Friday: “Over the last month or so we’ve announced plans to come to the table with a content licensing deal. We want to hope that those can continue and in that there’s going to be some framework that enables the commercial reality to take place.

“So that’s our goal right now, but nothing’s off the table.”

The degree to which news matters to Google is disputed by the tech giant. Google has claimed it makes only $10m a year in revenue from news in Australia, though News Corp Australasia executive chair Michael Miller has said modelling shows the figure could be as high as $1bn, a figure echoed by former senator Nick Xenophon, who helped spark the ACCC inquiry. Nine chair Peter Costello has estimated the tech giants should pay media companies around $600m.

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Hawke-era ‘aggregation’ brings regional broadcasters to their knees

At midnight on March 31 1989 former Nine boss Bruce Gyngell, the man who launched Australian television in 1956, welcomed WIN Television to Canberra from a studio in London, reports The Sydney Morning Herald’s Zoe Samios.

Prime Minister Bob Hawke’s “dream” – to give regional Australians greater variety in television services – had finally become a reality and viewers who previously had one commercial television network (Capital TV, now Southern Cross Austereo) now had choice.

“Nowhere else in the world has such an ambitious scheme been undertaken,” Prime Media Group chief executive Allan Hoy said as he launched his Canberra station at the same time.

Hawke’s ‘equalisation’ policy changed the television landscape. Decades later it is bringing the regional broadcasting industry to its knees.

Two regional broadcasters, Bruce Gordon’s WIN Corp and Southern Cross Austereo, are preparing to renegotiate their affiliate deals with metropolitan partners Network 10 and Nine Entertainment Co (owner of this masthead) which could lead them to switch places. But a larger question mark remains over whether regional broadcasters have a viable future at all.

Industry sources familiar with the original deals said the regional broadcasters gave anywhere between 18 per cent and 29 percent of revenue to their metro partners. But that revenue share split has nearly doubled over the last 30 years as expensive sports broadcasting rights deals and large investments in reality shows and drama gave metro broadcasters leverage to push for more advertising revenue from regional markets.

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News Brands

John Hewson and A Current Affair head to mediation in defamation fight

Former federal Liberal leader John Hewson and Nine’s A Current Affair will head to mediation after he launched defamation action against the program over a segment on an insurance broking company he chairs, reports The Sydney Morning Herald’s Michaela Whitbourn.

In documents filed in the Federal Court, the retired politician alleges a May 18 broadcast defamed him by suggesting he “failed to direct” GSA Insurance to pay insurance claims relating to a thunderstorm that caused water damage in Storage King units at North Parramatta.

In the Federal Court on Friday, Nine’s barrister Lyndelle Barnett said the “primary issue” in the case was the meanings conveyed by the broadcast. Nine denied any of the six defamatory imputations pleaded by Hewson’s lawyers were conveyed.

Hewson’s barrister, Matthew Richardson, said it was a “small case” and significant resources would not be required in compiling outlines of evidence.

Justice Michael Wigney ordered the parties to attend mediation by September 24.

“I hope, for the parties’ sake, the matter settles,” he said.

If not, he will set a trial date on September 25.

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Media companies seek a clearer picture on travel across borders

Australia’s commercial television industry has written to the Morrison Government requesting explicit permission for journalists and production staff to travel over state borders during the coronavirus pandemic, reports The Sydney Morning Herald’s Zoe Samios.

Border closures that have been reintroduced because of a second wave of cases have made it difficult for journalists and producers to travel, as permits do not specifically describe media as an essential activity and the rules vary depending on the state or territory.

The issues range from local media workers being unable to apply for work permits and getting journalists and technical crews to Queensland so that they can cover the AFL. Documentaries and reality television shows are also being affected. Sources said that the letter does not request for exemptions to quarantine rules, but instead asks for a single permit process for all states and territories.

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3AW’s new breakfast co-host Russel Howcroft eyes ABC audience

With big shoes to fill, Russel Howcroft is hoping to lure some of ABC’s audience to his new 3AW radio breakfast show with veteran broadcaster Ross Stevenson, reports The Australian’s Lilly Vitorovich.

The former television and advertising boss has taken over from John Burns, who co-hosted Melbourne’s top-rating 3AW breakfast show with Stevenson since 2001 until his retirement last Friday.

Given the big job at hand, Howcroft say he plans to follow Stevenson’s lead on the show when he debuts on Monday morning. Howcroft is also hoping to attract new listeners, including those that watch ABC’s long-running ad-focused TV show Gruen, on which he is a panellist.

“It would be wonderful if some new listeners gave it a try, and as a result they could hear the radio genius of Ross Stevenson,” Howcroft told The Australian.

Howcroft has spent a couple of weeks training with Stevenson, who he has known for around 20 years, and the “amazing production team”, led by executive producer Kate Stevenson.

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Gourmet Traveller Wine tries to trade out of administration

Failed Sydney restaurateur Stan Sarris has another business facing financial difficulty – Gourmet Traveller Wine Magazine Pty Ltd, reports The Sydney Morning Herald’s Caitlin Fitzsimmons.

Sarris, best known as Rodney Adler‘s business partner in the Banc/GPO empire back in the late 1990s and early 2000s, is bullish about the future of GT Wine despite the magazine falling into administration last year under the weight of more than a million dollars in debt.

The magazine, helmed by long-time editor Judy Sarris (Stan’s wife), is still publishing as usual as the business tries to trade its way out of administration and repay hundreds of thousands of dollars. Creditors include a who’s who of food and wine media and hatted restaurants Africola in Adelaide and Gerard’s Bistro in Brisbane.

Many contributors still have an ongoing relationship with the magazine and would not talk on the record, with one pointing out that had the magazine stayed with its former owners, Bauer Media, it probably would not have survived the German publisher’s recent cull of titles.

Judy Sarris has been editor of GT Wine since 2003 when it was owned by ACP and then continued when Bauer Media bought ACP from Nine (now publisher of this masthead) in 2012. Bauer sold GT Wine in 2015 and the magazine is owned 20 per cent directly by Judy Sarris and 80 per cent by the Sarrises jointly through a holding company, Spud Media Investments.

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Sports Media

Kangaroos v All Blacks exhibition coming to Pay-Per-View in 2020?

Footy fans will be slugged $50 to watch a proposed Kangaroos v All Blacks match on a pay-per-view network, just like a major fight or UFC event, reports News Corp’s Phil Rothfield.

Promoters need the television sales, worth about $6 million, to pay the NRL and New Zealand Rugby Union $8 million each to take part.

The Main Event-style coverage will face legal issues because free-to-air broadcaster Channel 9 has the rights to all international rugby league. There is also the potential backlash to consider ­ the case of many footy fans struggling in the COVID-19 environment to even put food on the table, let alone having to pay to watch an exhibition game.

Even with the pay-per-view sales, it is doubtful the game will go ahead this year.

Promoters also need $6 million from the Queensland government and tourism to meet their budget.

This is highly unlikely with the state’s borders closed and the fact the game will not attract interstate or overseas visitors.

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Big participation doesn’t lead to TV ratings success for sport

Australia’s most popular participation sports have failed to convert their big on-field numbers to television viewers and lucrative right deals, a study has found, reports The Australian’s John Stensholt.

Television consultancy business Media Rights Value has found there is no correlation between a sport having large junior numbers or amateur participants and ratings on TV, and sports with big player numbers have not done a good enough job to create fan interest in their competitions.

Sports need their grassroots competitions to survive and thrive to create the pathways for players to emerge in their elite competitions, but those players won’t tune in to watch without the excitement and competitiveness of the league and a closer connection with and passion for the clubs by fans.

“You can’t assume there’s a natural flow on from participation to viewing,” said MRV director Colin Smith. “You need to have a strategy in how you get fans interested or entice them to follow your particular league. You have to continually build personality as well.”

More people watched the AFL than cricket despite having similar participation numbers, while golf, netball and basketball all had high participation numbers but fewer viewers.

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NRL valued at $3b as private equity group to offer all 16 clubs $20m

A private equity group that is trying to buy a 20 per cent share of the NRL will offer the 16 clubs a one-off payment of $20 million to get their support, reports News Corp’s Phil Rothfield.

On top of that, the NRL administration would get $300 million to strategically invest and put the game in a position of strength like never before.

Sounds almost too good to be true.

Businessman and Melbourne Storm chairman Matt Tripp is in talks with the independent commission and private investors in the UK to form a partnership.

The NRL has been recently valued at around $3 billion.

The investment group under that valuation would pay $600 million for a 20 per cent share.

The cash-strapped clubs would get half as an incentive to support the idea.

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AFL Media journalist Mitch Cleary stood down over Brooke Cotchin tweet

AFL Media journalist Mitch Cleary has been stood down indefinitely after publishing on Twitter the Brooke Cotchin Instagram post that saw the Tigers handed a $45,000 fine by the league, reports News Corp’s Jon Ralph.

Brooke Cotchin’s post had been widely seen before she deleted it early in the week but she had not been named in print or online until Cleary’s Friday night social media post.

Veteran journalist Caroline Wilson had named Cotchin on radio on 3AW on Thursday, with Cotchin the only Richmond wife in the Gold Coast hub at that stage.

The Herald Sun understands the AFL viewed him as an AFL employee ahead of his obligations as a journalist.

The decision to stand him down is believed to have come from the AFL.

The Tigers were fined $45,000, with $25,000 suspended by the AFL.

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