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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 24 ] --

Subject to Clauses 6.2 and 6.8, Jones must be free to appear or participate in any other media, public appearances, commercial endorsements and sporting activities provided such AJ.0003.0577 Statement, Mr Conde, para 25.9.

AJ.0008.1306 Statement, Mr Conde, para 25.9 appearances or participation does not adversely affect Jones’ ability to provide the Radio Services and to perform the obligations on his part to be observed under this agreement.

2UE acknowledge that the current activities in which Jones participates (including those relating to Optus, Optus Vision, and Channel Nine) do not adversely affect his ability to provide the Radio Services and to perform the obligations on his part to be observed under this agreement.

Mr Conde indicated that he was aware of the existence of an agreement between Mr Jones

and Optus in 1995:

I believe that I was aware that Mr Jones had a relationship with Optus from about the time that relationship came into existence. 657 On 11 September 1995, Ms O’Neil, Director of Corporate Affairs at Foxtel wrote to Mr Conde (sending a copy to Mr Brennan and Mr Jones) in relation to Mr Jones’ contractual relations with Optus Vision. Ms O’Neil complained about the treatment given to Foxtel by Mr Jones in an interview with Mr Geoffrey Cousins (CEO of Optus Vision). Ms O’Neil

said:

…we understand that Mr Jones is paid by Optus Vision to promote that company’s services. In those circumstances we would have thought it appropriate that he indicate his relationship with Mr Cousins prior to doing such an interview, or making editorial comment, lest his listeners were inadvertently led to believe that his views were given without the benefit of financial compensation. 658 Events in 1998 On 16 March 1998, the ABC TV program ‘Media Watch’ alleged the existence of ‘endorsement agreements’ between Mr Laws and Qantas, Foxtel, Toyota and RAMS. With

regard to the ‘Media Watch’ program, Mr Conde’s submission stated that:

Mr Jones and Mr Laws are independent contractors; not employees. They are perfectly entitled to, and do, establish commercial relationships. Before the events of March 1998, Mr Conde was aware that Mr Jones and Mr Laws had commercial relationships with various entities. 659

On 20 March 1998, Mr Conde wrote to Mr Laws about the Media Watch allegations:

I refer to the assertions on Monday night’s Media Watch programme that a company controlled by you has made several contracts with advertisers under which, in consideration of payment to that company rather than 2UE, you, among other services, promote the advertisers’ products while broadcasting on 2UE.

Please tell me whether any of these assertions are true and, if so, supply me with copies of those contracts which are in writing and a summary of the terms of those which are oral.

I ask that you respond on Monday or Tuesday next week, please. 660

On 22 April 1998, Mr Laws’ draft NRMA contract was provided to 2UE’s solicitors:

Statement, Mr Conde, para 25.2.

2UE.0025.0247.

Statement, Mr Conde, para 12.1.

2UE.0015.2751 We have modified several of the clauses to take into account the matters discussed at our meeting…661 On 27 July 1998, 2UE’s policy regarding promotional activity was circulated as a

memorandum:

2UE’s policy in relation to these matters is as follows:

So long as an announcer’s off-air promotional activities do not interfere with the performance of his or her contract with 2UE, or bring 2UE to disrepute, they are of no concern to 2UE;

An announcer shall not contract with third parties to receive remuneration for using 2UE’s facilities to broadcast promotional material or to embellish booked advertisements for such third parties;

3.An announcer shall not contract with third parties to receive remuneration for disguising and publishing as news or comment on 2UE what is really paid promotional material for that third party. 662

On 4 September 1998, Mr Conde wrote an e-mail to Mr Miller:

Am I supposed to know something about some Optus arrangement? … If Alan has some personal endorsement arrangement with Optus, then I refer you to me [sic] Circular Memorandum on that subject in July 1998. Have you advised me of any such Optus arrangement? 663 On 24 December 1998, Mr Moltzen wrote an e-mail to Mr Conde indicating that an arrangement was proposed between the Bankers’ Association and Mr Laws and that

Mr Moltzen had reservations about the arrangement:

John. I think this is something you would want to know about. I can see danger signs everywhere. I don’t want to drop our rates for anyone let alone ABA and Bob Miller. If we don’t we could lose the business and Laws could lose more than half a million. He will also see it as another example of me giving him trouble. What do you think? Tony. 664

In replying to Mr Moltzen’s e-mail (again on 24 December 1998), Mr Conde indicated that:

I think that we need a carefully written letter to him setting out the difficulty that we see.

Attached is my attempt at a draft! 665

–  –  –

I am writing to make sure that you are informed about the situation from our perspective on this proposed advertising schedule on 2UE and Network stations in 1999.





Paul Bowd has met with Chris Stewart from the ABA and Bob Miller on more than one occasion. The issue for us is that the ABA wants to pay a rate for the commercials less than our ‘live read’ rate because they are mumbling that they ‘do not feel that they should pay twice’.

They have said that for 2UE and the Network stations they ‘only had $500,000 left after coming to an arrangement with John’.

We have indicated to the ABA that 2UE is not party to any arrangement that they may form directly with you and that we need to discuss a schedule for the advertisements based on the ‘live read’ rates.

Clearly we do not want to upset any proposed arrangement that you may have in contemplation and 2UE does not want to lose the advertising schedule.

I am satisfied that we are handling the discussions with sensitivity and I am confident that we will find away forward. I just wanted you to be aware of the ABA’s perceptions with respect to their proposed arrangements with 2UE

–  –  –

On 29 December 1998, in a subsequent e-mail from Mr Moltzen to Mr Conde, Mr Moltzen informed Mr Conde that he was not going to send the letter drafted by Mr Conde.

Mr Conde’s response was:

I understand Tony.

In the cool light of day, the less one says in written form to Lawsie the better, because he is so much better with the ‘pen’ than I am! 667 Events in 1999 On 19 February 1999, Mr Laws sent a memo to Mr Brennan (with a copy to Mr Conde) referring to a memo by Mr Brennan concerning ‘McDonald’s commitment of $170,000 to 2UE’:

I would like to bring to your attention that the Australian Banking Association is about to spend $707,000 on 2UE and the Network due to some great work by me. I, however, don’t rejoice in the commission but somebody who didn’t sell, in sales, will.

Could I respectfully request, given the memo concerning McDonald’s, an assurance that Messrs Jones, Stanley, Carlton, Zemanek, et al, will not make any derogatory comments about the banks?

2UE.0025.0235 2UE.0025.0233

–  –  –

On 20 February 1999, Mr Brennan wrote in reply to Mr Laws:

I received your memo this morning concerning McDonalds and the Australian Banking Association. Congratulations having signed off a very attractive deal.669 On 22 February 1999, Mr Bowd (Agency Sales Manager for Sky Radio Sydney) wrote to Mr Laws confirming the arrangements for the Bankers’ Association live reads on Mr Laws’ program. Mr Bowd mentioned that he had been involved in negotiations since November 1998 and that Ms Clary would be handling the day-to-day running of the account.670 Some time after February 1999, the NRMA was informed by its advertising agency that Mr Laws could no longer record advertisements for it because of his new arrangement with the Bankers’ Association. This message appeared to Mr Williams (NRMA) to have come

from 2UE:

Our advertising agency Saatchi & Saatchi informed me that they had sent scripts to be recorded, they had been returned, and the reason that they had been returned was because there was now some kind of agreement with the Australian Bankers Association. 671 On 12 July 1999, the ABC Media Watch program revealed the existence of an agreement between Mr Laws and the Bankers’ Association.

2UE SUBMISSIONS

In its written submission, 2UE put the following points to the panel:

Mr Conde was in the witness box for nearly three days. He presented as an intelligent, articulate, thoughtful and honest man. As his witness statement, exhibit 69, makes clear, he relied from the time of the first Media Watch program on the advice of his senior counsel and solicitors.

Mr Conde has conceded that with the benefit of hindsight he should have been more vigilant and less trusting. But this does not equate to knowledge.

In the light of Mr Conde’s evidence, the worst that can be said (and this is not to be taken as an admission) is that he did not devote sufficient time to enforcing personally the policy he introduced in July 1998. He trusted others. However, devoting insufficient time to a task does not connote knowledge.

Paragraph 33 of the written submissions of Counsel Assisting is erroneous: the March 1998 Media Watch Program did not of itself make Mr Conde aware of the content of contracts between presenters and sponsors relating to on-air behaviour. Further, it omits to say that on being alerted to the possibility that there might be such contracts he took timely steps to enquire about them. We now deal with this subject.

Counsel Assisting relies upon three major matters to attack Mr Conde’s evidence that he was not aware of the detailed terms of the presenters’ promotional arrangements regarding on-air

–  –  –

conduct until after the Media Watch program of 12 July 1999. We turn to these three matters under the sub-headings below.

The March 1998 Media Watch Program did not of itself make Mr Conde aware of the content of contracts between presenters and sponsors relating to on-air behaviour.

–  –  –

In order to put the evidence of the NRMA draft into proper context it is necessary to look in some detail at the steps which preceded it. These are set out in paragraphs 13.4 to 13.12 of Mr Conde’s statement, Ex 69. Mr Conde went to considerable lengths to try to find out the terms of Mr Laws’ endorsement agreements. He was met with the claim of confidentiality referred to in the letter from Hunt & Hunt of 24 March 1998. He was told in the 24 March letter and at the meeting of 1 April 1998 and in the notes from Mr Laws provided on 9 April 1998, quite inaccurately, that the allegations in the Media Watch programme of 16 March 1998 were untrue. The thrust of what he was told in the meetings of 1 April and 20 April 1998, and in the 9 April 1998 notes, was that the Agreements provided for off-air services (See Conde Statement para 13.7 – 13.24 and Ex 55 and 56).

At the meeting of 20 April 1998 a partial answer to the confidentiality provisions was arrived at. Mr Laws was in the process of negotiating an agreement with the NRMA. Since the agreement was not yet concluded the view was taken that the terms of that agreement were not protected by a confidentiality clause.

Mr Conde’s evidence was that from the time when he received the first draft of the NRMA agreement shortly after 22 April 1998, he believed that it was likely that Mr Laws had other endorsement agreements on foot which were unacceptable to 2UE (T1350). However, it is quite wrong to suggest that a belief formed by way of inference from the NRMA draft amounts to knowledge of the detailed terms of other agreements. Clearly it does not. Moreover, it is wrong to say that Mr Conde showed no concern; see Mr Laws’ note of 9 April 1998 (exhibit 55): ‘I am disturbed (a) that he (Mr Conde) was shocked and (b) that he simply accepted as being the fact that the inferences, snide as they were, made on a program on the ABC…’. Nor is it correct to say that, apart from writing memos, 2UE did nothing to address the problem.

Mr Conde’s letter of 14 May 1998 to Mr Laws and Mr Laws’ assurance to Mr Conde that he accepted absolutely the two points of principle were significant steps. The Authority should accept without hesitation Mr Conde’s evidence of the conversation in which Mr Laws gave such an assurance (T1318). He was not challenged on this evidence and it is supported by the contemporaneous fax to Mr Foster (reproduced at para 13.16 of exhibit 69). Compare Mr Laws’ unsatisfactory evidence on this issue at T861-2. Furthermore, Mr Laws offered to amend his other endorsement agreements to ensure that the two matters of principle addressed in the 14 May 1998 letter would be addressed (see Mr Foster’s letter to Mr Boyce of 3 June 1998). Mr Conde was therefore justified in his expectation that none of Mr Laws’ agreements would continue to contain provisions which would entitle him to receive remuneration from sponsors for any on-air activities not authorised by the 2UE policy.

Although Mr Boyce said in his letter of 10 June 1998 (part of which is reproduced in para

13.22 of exhibit 69) that he would discuss with his client the issue of amendments to contracts noting current agreements would be amended when they came up for extension or review, this was explained in Mr Conde’s evidence at T1320. He said that in view of the assurances given to him, he expected that the amendments would occur when the policy statement issued.

Mr Foster had already told Mr Boyce in his letter of 3 June 1998 that 2UE intended to issue a policy statement which would address the two matters of principle set out in the 14 May 1998 letter (see the reference to this in the excerpt from the letter reproduced in para 13.21 of exhibit 69).

It was reasonable for Mr Conde to suppose that the projected policy statement was to be the equivalent of the drawing of a line in the sand.



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