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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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occasion that promotional matter goes to air. It is sufficient, in the Panel’s view, that:

♦ there exists an agreement whereby the presenter is obliged, and receives valuable consideration, to provide on-air comment about that sponsor, its products or services, ♦ the matter, judged objectively, promotes or draws attention to that product or service and ♦ there is a sufficient causal link between the material that goes to air and the particular commercial agreement.

It matters not whether the obligation is expressed in the agreement as simply to make statements and comments on air, to recommend and endorse the services of the sponsor, or to read and embellish radio commercials live to air or other similar terms. Whether the material that goes to air is an advertisement is to be judged having regard to the objective test set out above. Whether there is a causal link between the material that goes to air and the particular commercial agreement is a matter of judgement based on the content of the broadcast. Analysis of particular broadcasts against Code 3 can be found in Schedules Thirteen and Fourteen.

Consideration Passing to Licensee

The 2UE submission suggests that matter can only be an advertisement if consideration passes to the licensee. The Panel does not agree. Paid advertisements include all advertisements where there is a causal link between payment of consideration and the advertisement being broadcast. Thus consideration passing to a presenter, producer or program maker does not stop the matter being an advertisement.

2UE Supplementary Submission: Alan Jones Broadcasts – Breach of Clause 2.2(d) of Code of Practice;

2UE Supplementary Submission: John Laws Broadcasts – Breach of Clause 2.2(d) of Code of Practice

PRESENTATION AND CONTEXT

In the broadcasts examined in this hearing, the Panel is of the view that the existence of a commercial agreement between either Messrs Jones or Laws and a third party may affect the presentation of a broadcast.

2UE made the following general submissions in relation to each broadcast:

This broadcast was not put to the announcer or any 2UE witness. Nor was evidence presented from listeners or experts. There is no evidence of the way in which the broadcast might have been received and interpreted by listeners. It is impossible to conclude, therefore, that the material was ‘presented’ in other than its true form.

No evidence has been adduced as to the context in which the broadcast was made. The material immediately preceding and succeeding the broadcast has not been put before the Panel. It is impossible to safely conclude that the broadcast was ‘presented’ in other than its true form without considering contextual detail.51 Matter may be classified as an advertisement if it is designed or calculated to draw public attention to a product. This is determined by objective reference to the nature of the broadcast: it is not necessary to receive evidence from listeners or experts. Further, matter which is, in truth, advertising may be presented as other program matter despite being placed within a broader context of unambiguously advertising programs. The Panel is of the view that the broadcast matter itself is sufficient context to determine whether the matter, ‘advertising’ in content, has assumed the form of ‘other program’ matter.

The comments made by the Panel in relation to the relevance of contextual detail in analysing Code 2 apply equally here.

Mr Jones made a submission in relation to interviews conducted with representatives of his sponsors. For example, in relation to an interview conducted with Mr Cousins, Mr Jones

submitted that:

It is clear from Mr Cousins’ presence on the program and from what he says that he is seeking to draw public attention to Optus, its business and its positions on various issues. The subjective content is obvious. In the second broadcast, the interview commences with the question ‘How will you persuade people they should change from Telstra to you?’ This question directly addresses the right identified by the Communications Law Centre in its submissions, namely, the listeners’ right to know by whom he or she is being persuaded.

The Panel does not accept this submission. While the interviewee’s position may be declared, Mr Jones’ interest is not. Mr Jones has a commercial agreement with the relevant sponsor, and there is no disclosure of it. The comments made by the Panel in relation to this matter in analysing Code 2 apply equally here.

2UE Supplementary Submission: Alan Jones Broadcasts – Breach of Clause 2.2(d) of Code of Practice;

2UE Supplementary Submission: John Laws Broadcasts – Breach of Clause 2.2(d) of Code of Practice 5 Mr Jones’ Agreements and His On-Air Conduct Mr Jones had a number of commercial agreements that were examined during the course of

the hearing, including:

♦ Optus Administration Pty Limited (Optus);

♦ QANTAS Airways Limited (QANTAS);

♦ State Bank of New South Wales (State Bank);

♦ Walsh Bay Finance Pty Limited (Walsh Bay); and ♦ Walker Corporation Limited (Walker Corporation).

The agreements examined in detail in this report are those which Mr Jones held with Optus and Walsh Bay, which most clearly illustrate a causal link between the existence of an Agreement and the on-air conduct of Mr Jones. The detail of all of Mr Jones’ agreements can be found at Schedules Eight and Seventeen.





OPTUS The 1993 Agreement On 4 May 1993 Optus entered into an agreement with Belford Productions Pty Limited52 and Mr Jones for a period of two years (commencing 1 April 1993), with a one-year extension at the option of Optus.53 Mr Jones’ fee was $100,000 per annum plus a performance-based fee based on increases in Optus’ market share.54 Mr Jones’ obligations included the promotion and enhancement of Optus long distance

communication services by:

♦ ‘personal recommendation’;

♦ reading live radio commercials; and making pre-recorded radio commercials.55 ♦ Mr Jones was also required not to promote products that competed with those of Optus, although the agreement was stated not to oblige Mr Jones to breach any of his obligations to 2UE.56 Belford Productions Pty Limited is a private company owned and controlled by Mr Jones, which is legally entitled to contract to provide the services of Mr Jones to third parties.

CWO.0003.0541 Clauses 4 and 5 – CWO.0003.0541 Clause 2.1 – CWO.0003.0541 Clauses 9.2, 9.3 – CWO.0003.0541

The 1995 Agreement

Between April and June of 1995 Mr Jones’ agent and manager, Mr Harry Miller, engaged in negotiations with Mr James Packer of Publishing and Broadcasting Limited (PBL) concerning a contractual arrangement between PBL, Optus, Optus Vision and Mr Jones.57 Key components of the relationship were to include product endorsement to generate sales, the influence of opinion ‘to counter Murdoch-dominated print media’ and the keeping of business from Telecom and Foxtel.58 On 29 August 1995 Optus entered into a new agreement with Belford Productions and Mr Jones for a period of three years, commencing 1 June 1995.59 Mr Jones’ fee was $500,000 per annum (plus CPI increases) and an additional fee of $20 for each new customer obtained by Optus through promotions involving Mr Jones.60

Mr Jones’ obligations included:

♦ the promotion of Optus Vision, Optus, PBL and their respective services and products by personal recommendation and endorsement;

♦ reading and embellishing radio commercials and press releases from advertising scripts and releases; and the making of pre-recorded radio commercials. 61 ♦ The agreement provided that endorsement by Mr Jones was to be primarily directed to promote Optus Vision Services and to distinguish between Optus Vision and its competitors (in particular Telstra, Foxtel and Australis).62 In the event that the Optus Group was criticised in the media for ‘mistakes or errors in judgement’, Mr Jones was not required to ‘cover for Optus Vision, Optus or PBL’ where this might ‘prejudice his integrity as an experienced and respected radio commentator’.

Mr Jones was however, expected to use ‘his best endeavours to assist the Optus Group in remedying public attitudes arising from any such event’.63 Mr Jones agreed not to endorse any ‘Competitor’ or any ‘Competitive Service’.64 This was subject to the proviso that nothing in the agreement was to require him to provide services which would detract from his standing and integrity as a professional broadcaster and media personality or require him to limit or breach his obligations to 2UE.65 Optus reserved the right to terminate the agreement if Mr Jones ceased to host his program on 2UE.

AJ.0008.1313-1314; Transcript, Mr Jones p. 1101; AJ.0008.1316; AJ.0008.1319; AJ.0008.1322-1324 CWO.0004.0706-707.

AJ.0006.1026-1038.

Clauses 4 and 5 (AJ.0006.1026).

Clause 2.1 (AJ.

0006.1026).

Clause 2.1(j) (AJ.

0006.1026).

Clause 6.2 (AJ.

0006.1026).

Clause 1.1 of the agreement (AJ.

0006.1026) defines a Competitive Service as ‘each of telephony, subscription broadcasting and free to air broadcasting services other than those conducted by Optus Vision, Optus or PBL.’ The same clause also defines a Competitor as ‘Telstra Corporation Limited, Foxtel Management Pty Limited, News Corporation Limited; Vodafone Pty Limited, Australis Media Limited or any Related Body Corporate of any of them, all free to air broadcasters other than the Nine Network and any other party who conducts a Competitive Service.’ Clauses 9.1, 10.1 (AJ.0006.1026).

The 1998 Agreement

On 29 May 1998 Mr Max Suich (Marketing Director, Optus Communications) sent a fax to Mr Harry Miller outlining the ‘key points’ outstanding in the negotiation of a new contract.66 These included extended services including ‘advertorial endorsements for the press’, ‘advertising/advertorial assistance if there’s a float’ and ‘revised language on advocacy’.

On 18 September 1998, Optus entered into an agreement with Belford Productions and Mr Jones for a period commencing on 1 June 1998 and ending on 31 December 2001.67 The fee was $500,000 per annum (plus CPI increases).68

Mr Jones’ obligations included:

♦ regular personal endorsement of Optus services and products;

♦ personal endorsement of the ‘public policy aspects’ of competitive Optus services such as Optus cable and satellite services;

♦ reading and enhancing radio commercials through personal endorsement from advertising scripts;

♦ reading, publicising and endorsing Optus policy statements about its competitive commitment;

♦ recording radio and television commercials;

♦ the endorsement and participation in press advertisements and advertorial’ advising consumers of the quality and desirability of Optus Services;

♦ the provision of his marketing skills and creative ideas in developing advertisements;

and ♦ if required by Optus, the starring on an Optus Vision channel in an ‘Alan Jones Live’ program on a five nights per week basis.69 The agreement provided that Mr Jones’ endorsement was to be primarily directed to promote Optus Services and to distinguish between Optus and competitors (in particular Telstra, Vodafone, AAPT, Foxtel and Australis).70 Mr Jones’ obligations in the event that the Optus Group was criticised in the media for ‘mistakes or errors in judgement’ were identical to those in the 1995 agreement.71 The agreement also provided that nothing in the agreement was to require Mr Jones to provide services which would detract from his standing and integrity as a professional broadcaster and media personality or require him to limit or breach his obligations to 2UE.72

Subject to this proviso, Mr Jones was not to:

♦ ‘publicly or privately disparage the Optus Group or Optus Services;

♦ make any statements which may adversely affect their image;

CWO.0004.0719-0720; Transcript, Mr Suich pp. 420-422.

CWO.0003.0578-0591.

Clause 4 (CWO.0003.0578).

Clause 2.3 (CWO.

0003.0578).

Clause 2.3.

12 (CWO.0003.0578).

Clause 5.2 (CWO.

0003.0578).

Clause 9.1 (CWO.

0003.0578).

♦ ‘refer to any of them (directly or indirectly) adversely or in connection with any advertising of a Competitor or Competitive Service’; or endorse any Optus competitors or competitor services.73 ♦ On 24 March 1999, Mr Stephen Woodhill, National Media Manager of Optus, sent a fax to Mr James Thane of Harry M Miller & Company Management, providing ‘an overview of the way we [Optus] see the relationship’.74 Although not part of the written contract, Optus desired that Mr Jones would ‘continue regular mentions of CWO on air’ and would ‘take scripts/speaking notes up to three times each week from CWO on issues of concern to the company and use them on the program’.75 The provision of favourable on-air comment and the undertaking not to disparage Optus were ‘important’ aspects of the agreement from Optus’ point of view.76 Again, Optus reserved the right to terminate the agreement if Mr Jones ceased to host his program on 2UE.77

Mr Jones’ On-Air Conduct

Mr Jones made frequent mention of Optus on-air in circumstances where there is evidence that talking points or scripts were supplied to him by Optus (either directly, or through his secretary, Ms Micki Braithwaite or through Mr Miller and his staff). These items did not feature a phone number and may have appeared to the listener as if Mr Jones was offering disinterested editorial comment in support of Optus (see below).

Number Portability and Local Calls



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