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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 ...»

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The Bankers’ Association Council met on 10 February 1999 and approved the deal.521 The final terms were agreed to between Mr Stewart, Mr Bob Miller and Mr Laws on 16 February 1999.522 The Agreements Australia Street Consulting Pty Limited and 2UE A letter from Mr Bob Miller to Mr Bowd on 19 February 1999 confirmed the ‘arrangements’ between Australia Street Consulting Pty Limited and Radio 2UE.523 They included a total of 150 live reads by Mr Laws over 40 weeks, each to be between 9.00 and 10.00 am on weekdays and to be broadcast over the 74 stations in the network. The rate was $4,717 per live read, totalling $707,550. The Bankers’ Association also received complimentary sponsorship of the ‘Best of Laws’ segment.524

Australia Street Consulting Pty Limited and the Bankers’ Association

The final written agreement between the Bankers’ Association and Australia Street Consulting Pty Limited was contained in a letter dated 22 February 1999. Australia Street Consulting Pty Limited was paid on the basis of its procuring and managing the services of

Mr Laws. These services were essentially:

♦ The recording of 150 advertising spots under the name ‘The Whole Story’. ‘The Whole Story’ would involve Mr Laws reading a short story about Australian history with a break in the middle in which Laws would tell listeners that ‘speaking of the whole story Transcript, Mr Aveling p.65.

JL.0003.0626, JL.0003.0631, BANK.0001.0252, JL.0003.0632, BANK.0001.0254, BANK.0001.0256.

John Laws’ personal assistant: Transcript, 964; Jodee Borgo is an employee of John Laws not 2UE, ib.

JL.0003.0626.

Transcript, Mr Aveling, p 61,Mr Stewart, p 107, Mr Miller, p 602.

Ex.6 para.25; Transcript, Mr Stewart p.162, Mr Miller, p 590.

BANK.0002.0308.

BANK.0002.0310.

BANK.0002.0323.

Transcript, Mr Stewart, pp.116.

2UE.0025.0118.

2UE.0025.0116; 2UE.0025.0117.

he had checked out the whole story on a particular banking issue of the moment and had been very interested to discover the whole story about the issue.’ After a 15-30 second dissertation, Mr Laws would revert to the historical story.525 ♦ The granting to very senior bank and Bankers’ Association executives the opportunity to discuss with him on-air ‘their side of the story’ on particular issues. 526 There was to be a total investment of up to $1.35 million by the Bankers’ Association.

Mr Laws was not, during the course of the agreement, to broadcast any advertisement that denigrated Australian banks or the Australian banking industry and there was no obligation to pay Australia Street Consulting Pty Limited if the Bankers’ Association considered that Mr Laws had brought the reputation of its members into disrepute during 1999.527 Australia Street Consulting Pty Limited, Smith Smyth & Jones Pty Limited and Mr Laws The final agreement was set out in a letter dated 25 February 1999. Mr Laws’ obligations included reviewing and making recommendations in respect of radio advertising scripts, and making recommendations to senior bank executives to be interviewed on-air to present ‘their side of the story’.528 Australia Street Consulting Pty Limited was to pay Smith Smyth & Jones Pty Limited a fee of $500,000 for its services, which were to commence on 1 March 1999.529 The letter noted that the agreement between Australia Street Consulting Pty Limited and the Bankers’ Association could be terminated if the Bankers’ Association believed that Mr Laws brought the reputation of members of the Bankers’ Association into disrepute in 1999.530 Broader Terms to the Agreements between Australia Street Consulting Pty Limited and The Bankers’ Association and Australia Street Consulting Pty Limited, Smith Smyth & Jones Pty Limited and Mr Laws It seems that the terms of the agreements between Australia Street Consulting Pty Limited and the Bankers’ Association and Australia Street Consulting Pty Limited, Smith Smyth & Jones Pty Limited and Mr Laws may have been wider than those expressed in the written documents.

First, it seems that the agreements also included a regular practice of referring listener complaints to the Bankers’ Association and/or individual banks for their response and Mr Laws, on at least some occasions, putting those responses to air.531 It also seems to have been agreed that Mr Laws would cease making negative comments about banks as part of his live reads for RAMS Home Loans Pty Limited.532 However, BANK.0001.0008 (Emphasis in original) BANK.0001.0008 JL.0003.0663 JL.0003.0663 JL.0003.0663 JL.0003.0663 BANK.0002.0446; BANK.0002.0499; Transcript, Mr John Laws p.733; Transcript, Mr Aveling pp.84, 90Transcript, Mr Miller, p.585.

Mr Laws gave evidence that Mr Greg Jones, director of RAMS Home Loans Pty Limited, had already told him that RAMS Home Loans Pty Limited intended to reduce the criticism of banks in their advertising.533 Mr Greg Jones also gave evidence that accorded with that of Mr Laws. 534 Termination of the Agreements On 12 July 1999, the ‘Media Watch’ program hosted by Mr Ackland made allegations concerning agreements between Mr Laws and the Bankers’ Association.

On 19 July 1999 the Bankers’ Association Council decided to terminate its sponsorship agreement with Mr Laws through its contractual arrangements with Australia Street Consulting Pty Limited.535 The Bankers’ Association considered the implementation of the agreement to have been successful.536 The termination of the agreement resulted from the pressure of negative publicity and not from any dissatisfaction with the performance of Mr Laws.





Attitude of the Bankers’ Association to the Performance of the Agreement Mr Aveling did not agree that opportunity to comment was part of the agreement, but agreed that ‘the opportunity of individual banks to tell the whole story when someone rang with a complaint improved once the agreement came into operation’.537 When asked ‘why it is that bankers who are so careful with money didn’t even consider the possibility of changing Mr Laws’ view by providing him with facts rather than facts plus half

a million dollars?’, Mr Aveling responded:

Because this bank, that had been careful with money, was looking at spending or recommending council spending $1.35m for a communication program that would have cost us 67 cents per listener per annum to be able to communicate those messages four days a week.538 In a speech to members of the Bankers’ Association, Mr Aveling made the following

remarks:

For the benefit of the Major and Regional banks who are contributing to this commercial arrangement, may I say that in the three months this has been running, we’ve exceeded our expectations and objectives.

In the absence of radio station management, let me also say that John is giving us much more time than we are paying for. What you heard was just one of the shorter messages.

BANK.0001.0092, BANK.0001.0096; BANK.0001.0192; BANK.0002.0389; BANK.0002.0545, Transcript, Mr Stewart, p 119.

Transcript, Mr John Laws pp.733, 799-800.

Statement of Mr Greg Jones, Exhibit 41, par 19.

BANK. 0002.0519.

Transcript, Mr Aveling, pp. 60 and 85; Transcript, Mr Stewart, p. 119.

Transcript, Mr Aveling, p. 90.

Transcript, Mr Aveling, p. 95.

And in that time, John’s handling it beautifully, retaining his own independence and credibility whilst presenting our side of the story.539 However, Mr Aveling gave the evidence that he made the statement ‘in the absence of radio station management’ in ‘a joking way’.540

In evidence, Mr Stewart said that:

Mr Laws has very high degree of credibility with his audience. He is also associated with very reputable products and what we might call blue chip identities, and, for that reason, I would see him as a very desirable person to have aligned with a product or a message.541

Mr Stewart also said that:

we found that, to put it very bluntly, our subject matter wasn’t very interesting, and it sounded very odd when you suddenly started talking about cheque clearances in the middle of an ordinary commercial break.542 Mr Stewart also gave evidence that the ‘Whole Story’, the 90 second program component, was necessary to make the message ‘fit’ but 2UE was not paid for that.543

AUSTRALIAN TRUCKING ASSOCIATION (FORMERLY

KNOWN AS THE ROAD TRANSPORT FORUM)

Negotiation of the Agreement Alexander Bird Kulmar Porra & Friends developed ‘The Laws Campaign’ for the Road Transport Forum (RTF).544 The campaign proposal was intended to improve fund raising for the ‘Today’s Truckies’ program. An important component of the proposal involved informing the community of industry problems and influencing the government, and its ‘messages’ covered ‘key political events’, ‘key political and environmental messages’ and ‘crisis management’. On 7 May 1996 the Today’s Truckies Management Committee agreed unanimously to adopt the proposal.545 The Agreement On 1 October 1996 the RTF entered into a 3-year Endorsement Agreement with Mr Laws and Smith Smyth & Jones Pty Limited.546 The fee was $200,000 per annum (CPI indexed).547

Services to be performed by Mr Laws included:

BANK.0002.0446 Transcript, Mr Aveling, p. 100.

Transcript, Mr Stewart, p. 142.

Transcript, Mr Stewart, p. 161.

Transcript, Mr Stewart, pp. 161-164.

ATA.0001.0090 ATA.0001.0121 ATA.0001.0007 Clause 4 – ATA.0001.0007 ♦ reading and embellishing radio commercials from scripts provided by the RTF;

♦ use of best endeavours to provide favourable publicity and informed commentary (including editorial coverage and personal support) about the RTF, the Australian Road Transport Industry and issues identified by the RTF;

♦ updates on subjects relevant to the RTF through on-air talks with media personality Michael Whitney;

♦ support for RTF promotional campaigns and competitions; and ♦ encouragement of truck drivers to contribute to the Today’s Truckies campaign and to buy the products of companies who actively supported the RTF.548 Mr Laws was also required to use his best endeavours to ensure that 2UE placed any advertisements which were inconsistent with RTF objectives in other programs.549 The RTF undertook to provide Mr Laws with information that was both current and of public interest capable of being used by Mr Laws on the program.550 Events Subsequent To the Agreement At a meeting between the RTF and Mr Fordham, Mr Laws’ manager and agent, in February 1998, the four main objectives identified for Mr Laws included lobbying government/regulators and community education and relations. It was noted that ‘all hits should be in editorial format for credibility’.551 In a fax from Mr Edmonds to Mr Fordham sent on 22 July 1998 it was noted that the purpose of the RTF Campaign was ‘To use John Laws’ power and influence as a tool which influences key policy makers into decisions’.552 A plan for the next three months was also sent to Mr Fordham included the strategies ‘Influence the influential’, which was described as ‘0% advertising 100% editorial’ and ‘Community interaction’, which was described as ‘50% advertising + 50% contractual’.553

Termination of the Agreement

The Agreement was terminated by consent in July 1999, following the Media Watch program.554 Following the termination of the Agreement, the Australian Trucking Association has continued to send information to Mr Laws. It had not been used on air, although Mr Laws had spoken about the road transport industry, ‘from his own knowledge of an issue’.555 Clause 2.1 – ATA.0001.0007 Clause 7.1 – ATA.0001.0007 Clause 2.2 – ATA.0001.0007 ATA.0002.0272 ATA.0002.0360; JL.0002.0361 JL.0002.0360; JL.0002.0361. In his evidence, Mr Edmonds indicated that the phrase ‘0% advertising 100% editorial’ meant that editorial comment by Mr Laws would be used instead of paid advertising spots on 2UE (Transcript, Mr Edmonds, p. 182). Mr Edmonds also indicated that the phrase ‘community interaction’ referred to the interaction between Mr Laws and listeners who telephoned the John Laws Morning Show (Transcript, Mr Edmonds, p. 209).

Transcript, Mr Edmonds, p. 171.

Transcript, Mr Edmonds, pp. 172, 180.

Attitude of the Australian Trucking Association to the Performance of the Agreement During evidence, Mr Edmonds said that, in evaluating the benefit of the return on investment for Mr Laws, the RTF ‘weren’t talking about advertising; we’re talking about newsworthy issues’.556 Mr Edmonds gave evidence that the RTF had assessed the value of air time that Mr Laws would give to the RTF. Mr Edmonds said that the contractual payment of $100,000 to Mr Laws was worth the equivalent of a twelve week advertising campaign (that is, $590,000).557

FOXTEL MANAGEMENT PTY LIMITED (FOXTEL)

Negotiation of the agreement On 26 February 1997 Mr Laws’ agent, Mr Fordham, wrote to Foxtel indicating that Mr Laws would soon be in a position to enter into an endorsement agreement with Foxtel. The benefits he could provide would include: ‘personal and exclusive endorsement’, ‘embellishment of live reads’ and ‘broadcasting of editorial material supplied by Foxtel that he considers meets the news/information criteria of his program’.558 In addition, Mr Laws would consider ‘on-air promotional opportunities that will enhance Foxtel’s image’.559

The Agreement

On 29 May 1997 a 3-year agreement (commencing 1 May 1997) was entered into between Foxtel, Smith Smyth & Jones Pty Limited and Mr Laws.560 The fee was $300,000 per annum (CPI indexed) and Foxtel also agreed to install and maintain receiving devices for the reception of the Foxtel television service at two specified addresses (apparently properties owned by Mr Laws).561

The key services to be provided by Mr Laws during the term of the agreement were:

♦ the reading, embellishing and endorsement of radio commercials from advertising scripts provided by Foxtel;

♦ the use of Mr Laws’ best endeavours to promote Foxtel by ad lib comment from materials to be provided;



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