Harold Mitchell steps down from Free TV
Harold Mitchell has stepped down from his role as chairman of Free TV, following allegations from the regulator he handed confidential information to Seven West Media when he was a board member of Tennis Australia during negotiations for the 2015-19 rights.
Mr Mitchell, and the sporting code’s former president Stephen Healy, have been named in Federal Court proceedings brought by the Australian Securities and Investments Commission (ASIC), after an investigation into Tennis Australia’s 2013 decision to sell rights to Seven for a five-year period without a competitive tender process.
Mr Mitchell told Fairfax Media he had stepped down, but referred further inquiries on to Free TV.
ASIC alleges the pair “withheld material from the Tennis Australia board when it made its decision”, and in court documents claims they “failed to ensure that the board was fully informed about the value of the rights and the interest of parties other than the Seven Network” such as Network Ten.
Seven West Media has denied allegations from the regulator it received confidential information. In a statement provided to Fairfax Media by a Seven spokesman, the free-to-air broadcaster said the network had “co-operated in the ASIC investigation as required of it and no allegations have been made by ASIC against Seven executives or directors”.
“Our contract with Tennis Australia provided for an exclusive negotiating window which we pursued in good faith. In accordance with expectations Tennis Australia had to similarly engage in good faith negotiations during that period, not only because of the contractual obligation but also because of the longstanding relationship,” the spokesman said.
“There was a material step up in the rights fee agreed and we reached agreement within that exclusive period. We didn't receive any confidential information and nor was it put to us by ASIC that we had,” he said.
Court documents prepared by ASIC detail an email from Seven chairman Kerry Stokes in February 2013 ahead of a Tennis Australia board meeting to his senior executives. In the email, he says: “make no mistake, they [Network Ten] are after the tennis – they will pay a big cheque to start with a marque … We need to make sure we are there at this board meeting – let’s not take any chances. I reckon the delay has been so Ten and Foxtel can ready with a bid.”
Seven commercial director Bruce McWilliam said he would “call Harold again about this”.
"I am also worried. Harold swears we r [sic] safe but I will get onto him again,” he said, explaining Ten had borrowed $80 million.
However, the Seven spokesman said the emails “were sent six months prior to when the contract for the 2015-19 rights season was actually agreed and signed at the end of May 2013” and offers “increased all the time during the negotiations” and were constantly referred to Seven’s board.
“In addition, Seven West Media cooperated with Tennis Australia's desire to take the production back in house which had previously been a source of revenue for Seven and represented a further value shift to Tennis Australia to use its new dedicated facility at Melbourne Park,” he said.
“Ultimately the negotiations for the final deal were conducted with the full executive team in intensive sessions over several days, with lawyers in attendance for both sides, and the deal was approved by the full Tennis Australia board.”
ASIC is applying for penalties, and seeking orders to have Mr Mitchell and Mr Healy disqualified from managing corporations. If obtained, Mr Mitchell would be forced to relinquish his board positions, including as chairman of Free TV Australia (whose members include Seven, Nine Entertainment Co, Ten and the regional broadcasters).
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