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«COMMERCIAL RADIO INQUIRY Report of the Australian Broadcasting Authority Hearing into Radio 2UE Sydney Pty Limited February 2000 Sydney ISBN 0 642 ...»

-- [ Page 12 ] --
The Agreement On 1 July 1996, the Executive of the Registered Clubs Association of NSW (RCA) met and discussed, among other things, public relations and advertising strategies that could be adopted by the RCA. These included retaining ‘a spokesperson such as John Laws’, and a decision was taken to pursue the issue with Mr Laws’ manager, Mr Fordham.249 Mr Keith Kerr, Executive Director of the RCA and Ms Anne Wild, Publicity Manager of the RCA, met Mr Fordham, on 21 October 1996 to discuss the nature of the arrangement between the RCA and Mr Laws. Mr Kerr met again with Mr Laws on 12 November 1996.250 An agreement between the RCA, Smith Smyth & Jones Pty Ltd and Mr Laws was executed on 25 November 1996.251 It was to run from 1 November 1996 until 31 October 1999. In exchange for an annual fee of $200,000 (plus CPI increases), Smith Smyth & Jones Pty Limited agreed to provide the services of Mr Laws in connection with the promotion of the image of the RCA and the club movement.

The services to be performed by Mr Laws included:

♦ ‘reading and embellishing radio commercials’ on 2UE; and ♦ the provision of ‘editorial comment on the John Laws Program from information provided by the RCA’ based on newsworthiness as determined by Mr Laws.252 Mr Laws’ On-Air Conduct The RCA booked a number of live reads on 2UE, the scripts for which read like editorial content. They did not include any express words identifying them as advertisements.253 Some were limited to human-interest stories promoting the view that registered clubs played a positive role in the community.254 Most however, addressed the contemporary political issues of club taxation and the introduction of poker machines in hotels.255 The evidence does not indicate whether all of these scripts went to air on Mr Laws’ program.256 It appears that some were read not by Mr Laws but by Mr Ray Hadley, the announcer responsible for broadcasting in Mr Laws’ absence on holiday or when ill.257 RCA.0001.0130.

RCA.0001.0121.

RCA.0001.0159.

Clause 2.1 – RCA.

0001.0159.

Both the Association and 2UE regarded some pre-recorded advertisements, not involving Mr Laws, as clearly political and carried statements as to authorisation as was understood to be required by law. The live reads referred to here, however, were not in that category: Transcript, Ms Wild pp. 234-236, 237-238.

2UE.0017.3215, RCA.0001.0085, RCA.0001.0084.

2UE.0017.3250, 2UE.0017.3219, 2UE.0017.3227, 2UE.0017.3226, 2UE.0017.3225, 2UE.0017.3222, 2UE.0017.3220, 2UE.0017.3218, 2UE.0017.3230, 2UE.0017.3229, 2UE.0017.3221, 2UE.0017.3217, 2UE.0017.3214, RCA.0001.0083.

Live reads were booked by the Association on a variety of 2UE programs: Transcript, Ms Wild pp. 229see also pp. 250-251.

RCA.0001.0025.

The RCA was given to understand by Mr Fordham that paid advertising on Mr Laws’ program was necessary to provide a basis for positive comment.258 In the process of booking advertisements, Ms Wild (Publicity Manager at the RCA) made clear to 2UE advertising staff that there was a separate relationship between Mr Laws and the RCA,259 and Ms Wild regularly sent material to Mr Laws’ office ‘in an attempt to generate on-air comment’.260 On 8 February 1997 Ms Wild sent to Ms Brownlow (Mr Laws’ producer) an article

regarding the ‘back-down by the Government on the recent poker machine issue’, saying:

‘we believe this has occurred largely due to pressure from John Laws’ editorial on this issue – please pass on our thanks’.261 Ms Wild was not satisfied, however, that the RCA was receiving value for money from the agreement.262 On 6 March 1997 Ms Wild contacted Ms Brownlow (who was not aware of Mr Laws agreement with the RCA) to set up a lunch meeting in relation to ‘how we can make our information distribution more effective and efficient’. Ms Wild also sought direction on the type of information that would be of interest to Mr Laws and his listeners.263 Ms Wild and Ms Brownlow met the following Monday, 10 March 1997, and discussed the method of presentation of material for Mr Laws and the kind of material that would be considered newsworthy.264 On 12 March 1997 Ms Wild sent a fax to Ms Brownlow informing her of ‘the major issue’ facing the RCA, namely club taxation, and attaching a media release and other material on

the issue.265 She said:

Until the issue receives wider coverage in the metro area, we are happy to remain silent, as we do not want to give the [Australian Hotels Association] campaign legs.

We anticipate coverage of the issue in the metro papers soon however, and wanted to ensure you had enough information on the topic.

On 1 April 1997 Ms Wild sent an urgent fax to Ms Brownlow telling her that ‘today is the first day that poker machines will be available in pubs’. She referred to an item on Mr Jones’ program that morning, in which Mr Jones had been supportive of the hotels’ position and outlined ‘the key points we want to get across’.266 On 3 April 1997 Mr Laws made comments on club taxation which, at least in part, reflected the ‘key points’ provided by Ms Wild.267 That day Ms Wild sent a fax to Ms Brownlow headed ‘Today’s program’ and asking her to pass on thanks to Mr Laws ‘for his support today on the Pubs vs Clubs issue’.268 On numerous other occasions Mr Laws made on-air comments favourable to the clubs,269 and on 11 February 1998, Mr Kerr (president of RCA) sent a fax to Mr Laws thanking him for the ‘great support’ he had given in relation to the club taxation issue.270 Transcript, Ms Wild p. 218.





Transcript, Ms Wild pp. 219-220.

Transcript, Ms Wild p. 223.

RCA.0001.0113-0114.

Transcript, Ms Wild pp. 223-224, 246-248.

RCA.0001.0101.

RCA.0001.0096-0097, Transcript, Ms Wild p. 225.

RCA.0001.00960097.

RCA.0001.0086-0087.

Summarised at RCA.0001.0071.

RCA.0001.0077.

These are detailed in the summaries of transmissions obtained by the RCA.

RCA.0001.0014.

Mr Laws’ comments were not accompanied by any message indicating that they had been made at the request of the RCA or that he had a commercial relationship with the RCA. Nor was the fact that Mr Laws was being paid a fee by the RCA publicised in any other way.271 Attitude of the Registered Clubs Association of NSW to the Performance of the Agreement Ms Wild agreed in evidence that the real value of the contract to the RCA was the on-air content.272 On 4 November 1997, Mr Fordham sent a memorandum to Ms Wild suggesting that Mr Laws was prepared to mention the RCA on air, but that Mr Laws is partly prepared to do this in the absence of paid spots. He believes there should be some advertising commitment from the RCA – he could tag paid ads with interesting entries.273 Forwarding this memorandum from Mr Fordham to another member of the RCA, Ms Wild noted ‘What does he call 200k pa!’.274 In evidence, Ms Wild said that she believed that the RCA should be getting comment on-air from Mr Laws anyway, ‘given the nature and sum of the agreement’.275 Ms Wild gave evidence that ‘that is what we are paying for in any case’,276 and agreeing that she felt the RCA should be getting that anyway independent of advertising.277

Ms Wild gave evidence that the RCA wanted to get:

the additional support of someone that obviously communicates through a broad audience, and is his support of the club industry and the club movement would perhaps put additional focus on the movement, and can only benefit if there is a man such as John Laws championing the cause, so that was the designed benefit.278

STAR CITY ENTERTAINMENT PTY LIMITED (STAR CITY)

The Agreement Discussions between Star City and Mr Fordham about Mr Laws’ promotion of Star City commenced in October 1997.279 An important feature of the proposed agreement for Star City was the provision of regular information to Mr Laws ‘for him to discuss and promote’.280 A formal, three year, endorsement agreement was executed on 24 December 1997.281 Mr Laws was to receive an annual fee of $250,000.00 (CPI indexed)282 and ‘VIP’ status at Transcript, Ms Wild p. 253.

Transcript, Ms Wild, p. 242.

RCA.0001.0017.

RCA.0001.0017.

Transcript, Ms Wild, p. 244.

Transcript, Ms Wild, p. 244.

Transcript, Ms Wild, p. 245.

Transcript, Ms Wild, p. 245.

Referred to in JL.0002.0286; SCH.0001.0138.

JL.0002.0288; SCH.0001.0135-0136.

JL.0001.0051; SCH.0001.0004; SCH.0001.0071; SCH.0001.0072.

Clause 4 – JL.0001.0051; SCH.0001.0004.

Star City’s theatres and restaurants including a monthly credit on food/beverage tickets and accommodation of $4000 per month.283

Mr Laws’ obligations included:

♦ reading and embellishing advertisements;

♦ providing editorial comment from information supplied by Star City, subject to Mr Laws’ satisfaction that the information was newsworthy/entertaining;

♦ promoting and interviewing performers billed to appear at Star City; and interviewing representatives of Star City.284 ♦ Star City appointed a public relations manager to give daily and weekly information to Mr Laws ‘to enable him to defend or to clarify the position of Star City’.285 Mr Laws warranted that he would not publicly or in private ‘disparage Star City’, or make statements which may either adversely affect its image, or ‘denigrate or detract from casino gambling’.286 Star City understood that Mr Laws had promised to avoid making comments discouraging gambling.287 Termination of the Agreement The agreement was terminated on 19 August 1999.288 Star City was generally satisfied with its implementation.289 Mr Laws’ On-Air Conduct Interview with The Hon. Jeff Kennett MP On 6 November 1998 Mr Laws played on-air a tape of an interview he had conducted in Melbourne with Victorian Premier The Hon. Jeff Kennett in which Mr Kennett described Star City as ‘like a filthy rabbit warren’ and as ‘smelly and grotty’.290 On the same day, Mr Neil Gamble, CEO of Star City, wrote to Mr Laws expressing concern about Mr Laws’ ‘failure to take a strong stance in support of Star City’ and questioning the value of the Star City agreement.291 The letter complained that Mr Laws ‘made no attempt to defend Star City despite the fact that we are paying a substantial fee for your endorsement’.292 Mr Laws understood these remarks as ‘accusing me of a breach of contract’.293 Clause 2.2(d) – JL.0001.0051.

Clause 2.1 – JL.

0001.0051.

Clause 2.2(b) – JL.

0001.0051.

Clause 7.1(d) – JL.

0001.0051.

Transcript, Mr Gamble, pp. 618, 625 and 626.

Transcript, Mr Gamble, p. 623.

Transcript, Mr Gamble, p. 618.

Transcript, Mr Gamble, p. 619, JL.0002.0299.

JL.0002.0298.

JL.0002.0298.

Exhibit 47, para. 139.

On 9 November 1998 Mr Laws referred on-air to Mr Kennett’s comments and expressed his disagreement with them: ‘I happen to love Star City’.294 On the same day Mr Laws wrote to Mr Gamble defending his conduct on the basis that Mr Kennett’s comments had been in a jocular vein, but also outlining steps he had taken and planned to take to rebut those

comments.295 He also said:

I believe that I have displayed my loyalty to Star City constantly and perhaps in a way of which you aren’t aware. We get reasonably frequent calls wanting to be critical of Star City, as we do with faxes and e-mails. I either dismiss them totally or defend Star City. At no time did I allow any comment on the unfortunate incident concerning the security guards even though I was strongly encouraged to do so.296 On the same day Mr Fordham sent a fax message to Mr Gamble saying that Mr Laws was happy to take a call from Mr Gamble that morning (ie, on air) about Mr Kennett’s comments.297 Mr Gamble replied by fax to Mr Laws thanking him for his response and for ‘airing the issue in a positive light’.298 The ‘unfortunate incident’ referred to in Mr Laws’ letter of 9 November 1998 was an altercation involving security guards at Star City in which a person died.299 In his letter Mr Laws cited his decision not to comment on the incident as an instance of his support for Star City. In his evidence to the hearing, however, Mr Laws indicated that the Star City agreement was not behind his decision to refrain from comment on the incident.

Among his reasons for not mentioning the incident he cited legal advice emphasising that the matter seemed likely to result in litigation.300 In this regard, it is relevant to observe that the first lawyer to whom Mr Laws spoke was the in-house lawyer at Star City,301 and that the prospect of litigation did not deter other media organisations from covering the incident.302 Finding

–  –  –

Unattended Child at Leagues Club On 9 March 1999 Mr Laws mentioned during his program an incident in which a young child had been left in a car at Canterbury-Bankstown Leagues Club while his parents were SCH.0001.0091-0092.

JL.0002.0296; JL.0002.0304.

JL.0002.0296; JL.0002.0304.

JL.0002.0303.

SCH.0001.0090 and JL.0002.0302.

Transcript, evidence.

Exhibit 47, paras 141-142.

Transcript, Mr Laws 751-752.

For example, the Sydney Morning Herald, The Australian, the Daily Telegraph, etc.

inside gambling. Mr Laws commented on the incident in a way that directed favourable attention to Star City’s measures for dealing with such matters.303 Mr Gamble, Chief Executive of Star City, was made aware of that comment by staff at Star City who monitored Mr Laws’ program,304 and on 10 March 1999 he sent an e-mail message

to Mr Fordham which said, in part:



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