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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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Mr Laws was also to ‘be a user of Qantas services’, and warranted that he would not publicly or privately disparage Qantas services or make any statements which might adversely affect the image of Qantas.607 The 1995 Agreement Negotiation of the 1995 Agreement It appears that Qantas did not make extensive use of Mr Laws’ services under the 1993 Agreement between Mr Laws and Qantas, and by early 1995 Qantas regarded the Agreement as essentially dormant.608 However on 12 July 1995 there was a meeting between Mr Laws and Mr Dixon, Deputy Chief Executive Officer at Qantas, to discuss the renewal of the agreement.609 QAN.0001.0184; QAN.0001.0174; QAN.0001.0185; QAN.0001.0170 ; QAN.0001.0145.


Clauses 4 and 5 – QAN.0001.0098 QAN.0008.0046 Clauses 2.1 and 7.1 – QAN.0001.0098 Transcript, Mr Shirley, p. 361.


The 1995 Agreement The second agreement between Mr Laws and Qantas was formed by means of a letter dated 31 July 1995 from Smith Smyth & Jones Pty Limited to Mr Shirley, General Manager, Public Affairs, of Qantas.610 It was to run for three years commencing on 1 September 1995 and was to replace the first agreement.611 Mr Laws was required to provide ‘exclusive personal endorsement of the services of Qantas’ through the broadcasting and embellishment of radio commercials booked and paid for through Radio 2UE, and the provision of editorial commentary on issues submitted by Qantas based upon their news worthiness.612 Qantas was to pay Smith Smyth & Jones Pty Limited the sum of $200,000 per annum and to provide a maximum of four first class ‘firm space’ airline tickets per annum for the travel of persons nominated by Mr Laws.613 The 1998 Agreement Negotiation of the 1998 Agreement On 22 September 1997 Mr Fordham wrote to Mr Shirley at Qantas formally seeking his concurrence in extending the second Qantas-Laws agreement, which was then due to expire on 31 August 1998, to 31 August 2000.614 On 10 June 1998 Mr Shirley wrote to Hunt and Hunt, confirming an in-principle verbal agreement to extend Qantas’ endorsement arrangement.615 Two important changes from the Second Laws-Qantas Agreement were proposed – firstly the new agreement would only run for two years, and secondly it was attempted to specify a minimum frequency for editorial mentions of Qantas.616

The 1998 Agreement

On 31 August 1998 Mr Laws wrote to Mr Shirley ‘to confirm the agreement reached to extend the promotional agreement from September 1, 1998 to August 31, 2000’.617 In consideration of a cash fee of $200,000 per annum plus six firm space first class airfares for travel on Qantas by John Laws or his nominee, Smith Smyth & Jones Pty Limited agreed to provide various services of Mr Laws. These included the provision of Mr Laws’ personal endorsement to live radio commercials and the broadcast of information on Qantas related issues at the desired rate of one item per week but not less than one item every two weeks, provided that Mr Laws was given sufficient information to be fully informed and able to QAN.0002.0245.





QAN.0003.0566 ; JL.0002.0398 Transcript, Mr Shirley, p. 368.

JL.0002.0388. This document is clearly a draft and is not signed by either party. However, Mr Shirley accepted that the final agreement was in the terms of the document: Transcript, Mr Shirley p.369.

exercise his judgement as to whether the items were newsworthy, in the public interest and within the guidelines of Radio station 2UE.618 Although Qantas does not appear to have believed that it could oblige Mr Laws to provide favourable editorial comment when he did not consider it warranted,619 it is apparent that Mr Laws made favourable on-air comment sufficiently often that Qantas considered its investment in him to be justified. The arrangement with Mr Laws afforded improved ‘access’ so far as Qantas was concerned,620 and ensured that Qantas would be the primary source of information conveyed to Mr Laws’ audience on aviation matters.621 Attitude of QANTAS Airways Limited to the Performance of the Agreement In evidence Mr Shirley said that, one of the reasons Qantas entered into a commercial

relationship with Mr Laws was because:

we wanted to be able to call on him for a range of services, and we wanted also to be able to gain access, if you like, to bring to his attention those items which we thought were important, newsworthy and in the public interest.622 Mr Shirley gave evidence that, as many organisations were ‘bidding for the attention of a wide range of media’, ‘access’ to a presenter was helpful because it meant that ‘as one of the people with our hands up we were more likely to be noticed’.623 Mr Shirley gave evidence that the provision by Mr Laws of positive editorial comment was ‘very important for the agreement’.624 In relation to the renegotiated agreement, Mr Shirley said that editorial comment was, ‘in a sense’, ‘the nub of the agreement’.625


The Agreement On 19 April 1996 RAMS entered into an agreement with Smith Smyth & Jones Pty Limited and John Laws for a period of 3 years beginning on 1 April 1996.626 Under the Agreement RAMS was to pay Smith Smyth & Jones Pty Limited a fee of $250,000 per annum (CPI indexed).627 Mr Laws was required ‘to promote the image of RAMS and to promote applications for RAMS Home Loans’ by personal recommendation and endorsement including by reading and embellishing radio commercials from advertising scripts provided by RAMS. It was JL.0002.0388 Transcript, Mr Shirley, pp. 386, 393.

Transcript, Mr Shirley, p. 362.

Transcript, Mr Laws, p. 755-756.

Transcript, Mr Shirley, p. 362.

Transcript, Mr Shirley, p. 362.

Transcript, Mr Shirley, p. 364.

Transcript, Mr Shirley, p. 368.

JL.0001.0096; RAMS.0004.0478.

Clause 4 – JL.0001.0096; RAMS.0004.0478 intended that through the scripts and embellishments Mr Laws would promote RAMS products and also the credibility of RAMS as ‘being the provider of competitive home loans’.628 RAMS sought to have its advertising presented by means of live reads by Laws because the format, together with Mr Laws’ skill, made it possible to ‘blur’ the boundary between advertising and comment.629 Mr Laws was not to disparage RAMS Home Loans or make any statements which might adversely affect the image of RAMS during or after the term of the agreement, in public or in private.

Attitude of RAMS Home Loans Pty Limited to the Performance of the Agreement Mr Greg Jones gave evidence that the value to RAMS of having Mr Laws read advertisements live to air was the ability of Mr Laws to make advertising sound like ‘chit chat’, and that Mr Laws was as ‘good as they get at blurring the the fact that it is an ad’.630


Negotiation of the Agreement On 1 July 1996, the Executive of the 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.631 Mr Kerr, Executive Director of the RCA and Ms 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 1996.632 The Agreement An agreement between the RCA, Smith Smyth & Jones Pty Ltd and Mr Laws was executed on 25 November 1996.633 It was expressed 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:

Clause 2.1 and 2.

2 – JL.0001.0096; RAMS.0004.0478 Transcript, Mr Greg Jones, pp. 688-689; Exhibit 41, paragraph 14.

Transcript, Mr Greg Jones, pp. 688-689.

RCA.0001.0130 RCA.0001.0121 RCA.0001.0159 ♦ ‘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.634 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.635 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.636 Forwarding this memorandum from Mr Fordham to another member of the RCA, Ms Wild noted ‘What does he call 200k pa!’.637 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’.638 Ms Wild gave evidence that ‘that is what we are paying for in any case’,639 and agreeing that she felt the RCA should be getting that anyway independent of advertising.640

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.641


Negotiation of the Agreement Discussions between Star City and Mr Fordham about Mr Laws’ promotion of Star City commenced in October 1997.642 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’.643 Clause 2.1 – RCA.

0001.0159 Transcript, Ms Wild, p. 242.

RCA.0001.0017 (Emphasis in original) 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 JL.0002.0286; SCH.0001.0138 JL.0002.0288; SCH.0001.0135-0136.

The Agreement

A formal, 3 year, endorsement agreement was executed on 24 December 1997.644 Mr Laws was to receive an annual fee of $250,000.00 (CPI indexed)645 and ‘VIP’ status at Star City’s theatres and restaurants including a monthly credit on food/beverage tickets and accommodation of $4000 per month.646

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.647 ♦ 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’.648 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’.649 Star City understood that Mr Laws had promised to avoid making comments discouraging gambling.650 Termination of the Agreement The agreement was terminated on 19 August 1999.651 Attitude of Star City Entertainment Pty Limited to the Performance of the Agreement Star City was generally satisfied with its implementation.652 JL.0001.0051; SCH.0001.0004; SCH.0001.0071; SCH.0001.0072.

Clause 4 – JL.0001.0051; SCH.0001.0004 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, pp 623.

Transcript, Mr Gamble, p 618.

Schedule 10: 2UE’s Knowledge Of Messrs Jones and Laws’ Agreements CHRONOLOGY Events in 1995 On 6 February 1995, Mr Conde wrote to Mr Jones asking whether Mr Jones had difficulty

presenting commercials on 2UE for Telecom:

… the facts are that in 1994 Optus spent less than a 1/3 of the money that they spent in 1993.

Indeed, in 1994 there was minimal usage by Optus of advertising in either the Breakfast or Morning programs. However, the company respected our past association with Optus and our concern for not putting any individual broadcaster’s credibility at risk caused us not to seek to take advertising material from a competitor in a ‘live read’ form.

However, for your confidential information, we are in receipt of a very considerable advertising expenditure proposal from Telecom and I would like to know what impediments there may be, if any, to our considering such advertising for ‘live read’ presentation in your program.653 Mr Conde stated654 that his understanding of the nature of the relationship between Mr Jones

and Optus was based on a letter to him from Mr Harry Miller in May 1995:

Alan in fact has made a commercial arrangement with Optus, which involves Alan doing some paid consultancy work for them and, of course, he will do whatever live reads are necessary to be done for the station. Optus are aware that any charges by 2UE for commercials are, of course, a matter between them and 2UE and their arrangements with Alan for his consultancy and promotional services are separate. 655 Mr Conde indicated that he was under the impression that Mr Jones’ agreement related to off-air activities (principally Mr Jones’ services for a subscription television broadcasting program).656 Indeed, the clear impression created in my mind about Mr Jones’ Optus agreement was that it related to off-air activities, principally Mr Jones’ services for a cable television programme.

In Mr Jones contract with 2UE (dated 16 October 1995), clause 5.9 refers to other activities

of Mr Jones:

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