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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 terms of the agreement between Mr Jones and Walsh Bay Finance are embodied in a letter signed by Mr Jones and representatives of Walsh Bay Finance dated 1 June 1998.122 Mr Jones was to be retained from 1 June 1998 to December 15, 2001 on the condition that the agreement was to cease if the Walsh Bay project did not proceed. The fee payable was $200,000 per annum.123 Mr Jones’ services were retained in order to assist ‘with the development of key media relationships and the general promotion of Walsh Bay and its scheme for redevelopment’.

Regular briefing sessions of Mr Jones were to be arranged by Mr Harry Miller.124 Mr Jones’ On-Air Conduct The day after signing the $200,000 contract with Walsh Bay (ie 2 June 1998) Mr Jones made a lengthy comment on-air in which he expressed agreement with statements in an article by Mr Piers Akerman in the Daily Telegraph rejecting criticism of the Walsh Bay development.

Mr Jones referred to the redevelopment of Walsh Bay as ‘[s]omething which I regret to say I’ve just stumbled upon’.125 In evidence, Mr Jones indicated that his on-air comments were not prompted by the contractual arrangement signed the previous day but, rather, were prompted by Mr Harry Miller bringing the detailed models and conceptual plans developed in relation to Walsh Bay to his attention.126 Mr Jones gave evidence that it was by chance that he had been given a briefing from Walsh Bay Finance, and arranged by Mr Harry Miller.127 Mr Jones gave evidence that while the chronology of events may indicate a direct correlation between his contract with Walsh Bay Finance, made on 1 June 1998, and his broadcast on 2 June 1998, he did not broadcast the statement on 2 June 1998 because of the agreement.128 Finding

–  –  –

AJ.0006.1144; Exhibit 78.

AJ.0006.1144; Exhibit 78.

AJ.0006.1144; Exhibit 78.

Part of Exhibit 76.

Transcript, Mr Jones, p. 1495.

Transcript, Mr Jones, p. 1497.

Transcript, Mr Jones, pp. 1494-1498.

Attitude of Walsh Bay Finance to the Performance of the Agreement Mr Mann of Mirvac gave evidence that he was content with Mr Jones’ performance under the agreement, and agreed that Mr Jones had behaved as Mr Mann had hoped he would.129

MR JONES’ EVIDENCE AND SUBMISSIONS

Mr Jones maintained that nothing that he said on-air was said in pursuance of his contracts as every view he expressed was a sincerely held belief. In Mr Jones’ written submissions to the

hearing it was said that:

It is not obvious that the existence or content of a commercial agreement between a presenter and a person mentioned on the presenter’s radio program is a ‘relevant available fact’ within the meaning of clause 2.2(d) whenever the presenter mentions that person on air. It will be necessary to look at individual broadcasts to decide whether such a fact is relevant.130

Mr Jones also submitted that:

In this case what is at issue is whether listeners were entitled to believe, from the manner in which particular material was broadcast, that there was no commercial arrangement between the presenter and the person who was the subject of the broadcast.131 Mr Jones submitted that the circumstances and content of each broadcast should be examined to determine whether a listener should be ‘entitled to expect that the existence of a relevant commercial arrangement would have been communicated’.132 In the absence of such a communication, Mr Jones also submitted that the Panel must determine whether the listener would form an erroneous assumption regarding the broadcast, thus categorising the broadcast as misleading.133 Mr Jones submitted that none of his broadcasts breached clause 2.2(d) of the Codes, as the manner in which the material was broadcast did not entitle listeners to be informed of the existence of the agreements. Mr Jones submitted that the presentation of the material was not misleading, despite the non-disclosure of the sponsorship agreements, and thus could not be in breach of clause 2.2(d) of the Codes.134 Mr Jones also gave evidence that he did not perform the on-air obligations that the contracts appeared to impose.135 This stands in contrast to the evidence of the sponsors, and to the fact that the sponsors renewed the agreements, generally for higher amounts. At the very least, it appears that the sponsors thought that Mr Jones was performing the on-air obligations imposed by his contracts.

Transcript, Mr Mann, p. 1473.

Submission, Mr Jones, para. 28.

Submission, Mr Jones, para. 45.

Submission, Mr Jones, para. 48.

Submission, Mr Jones, para. 48.

Submission, Mr Jones, para. 163.

Transcript, Mr Jones pp. 1055-1057, 1080-1181; Submission, Mr Jones, paras 3, 59, 136.

Finding

–  –  –

Mr Jones also insisted in evidence that he:

♦ did not read the contracts carefully;

♦ did not appreciate that the contracts contained provisions which related to on-air editorial conduct;

♦ did not and would not alter the content of his broadcasts at the bidding of a sponsor; and never broadcast facts he did not believe, or opinions he did not hold.136 ♦ Mr Jones declared that he was beholden to no one.137 He supported this position by saying that he did not know that the agreements related to on-air editorial conduct, and that he would not have been prepared to give effect to such provisions.138 He stated that he had not in fact performed the obligations apparently imposed on him by the agreements.





Mr Jones made the point several times that his agreements are subject to his overriding obligations to 2UE.139 Those obligations are set out in the agreement between Radio 2UE Sydney Pty Limited, Belford Productions Pty Limited and Mr Jones (the Service Agreement) dated 16 October 1995.

Under clauses 4.2 and 4.3 of the Service Agreement, 2UE is entitled to require Mr Jones to

perform recorded and live read advertisements on his program, subject to the following:

2UE must not require (and nothing in this Agreement requires) Jones to record a commercial or read a commercial live as part of the Program if to do so would detract from the standing and integrity of Jones as a professional broadcaster and national media personality or detract from his standing in the community generally.

Clause 6.3 of the Service Agreement provides:

The Company [Belford Productions] must procure that Jones must:

–  –  –

Submission Mr Jones (Exhibit 62) para. 23, para. 45-48; Transcript, Mr Jones pp. 1059-1061 Transcript, Mr Jones p. 1060 Mr Jones submitted that he had not denied that he knew his agreements related to on-air conduct, but that he thought that the conduct they related to was recorded advertisements and live reads, rather than to editorial conduct. Submission, Mr Jones, para. 69.

Transcript, Mr Jones para. 1137; Submission, Mr Jones para.3.

provided that the Company’s obligations under this Clause 6.3 are subject to Jones and the Company having the right to retain full artistic control of the Program.

In the absence of the policy direction of 27 July 1998,140 clause 6.3 of the Service Agreement does not prevent Mr Jones from complying with the on-air editorial conduct specified in his sponsorship agreements. Further, to the extent that the policy direction relates to the obligation of a presenter to provide favourable comment, Mr Jones is still entitled to provide editorial support for a sponsor at his discretion.

Clause 6.4 of the Service Agreement provides:

The Company must use its best endeavours to procure that all material provided by it and its staff (including Jones) for broadcast in the provision of the Radio Services will comply with the Broadcasting Act [1942] and the laws of the Commonwealth and the States relating thereto and, notwithstanding Clause 6.3, that the Company and its staff (including Jones) will follow any reasonable direction, restriction or procedure as may be given by 2UE from time to time to ensure such compliance.

Clause 6.4 does not apply to a breach of the Codes because compliance with industry codes cannot properly be said to be compliance with the ‘Broadcasting Act 1942 [or] the laws of the Commonwealth or the States relating thereto’.

Finding

–  –  –

Mr Jones stated that he did not read his contracts with sufficient care to appreciate that they related to on-air editorial conduct, and also stated that his on-air conduct was not in any way affected by the existence of the agreements.

While some of the agreements are complex and legalistic, several of them were quite straightforward,141 and the summaries of several others were readily understood.142 Moreover, Mr Jones sought the advice of Mr Harry Miller on the terms of his agreements on at least one occasion. For example, on 14 October 1994 Mr Jones sent a fax to Mr Harry

Miller which said, in part:

What are my contractual commitments to Optus. Please find enclosed a letter that I have sent to Bob Mansfield. I have subsequently spoken to him and he knows I am not happy. I need to talk to you early next week.143 On 17 August 1998, Mr Jones received from Mr Harry Miller a letter summarising the terms

of Mr Jones’ recent agreement with Optus. It said in part:

See JL.0003.0506.

Walsh Bay: Exhibit 78; Walker Corporation: Exhibit 79; Qantas QAN.0004.0697.

Walker Corporation deal memo Transcript, Mr Jones p. 1490-1491; Optus summary in letter from Mr Miller dated 17 August 1998 (AJ.0001.0090).

AJ.0003.0575.

I know you’ll read the contract when we send it over but in the meantime I just want to

point out what your obligations are:

1. Personal recommendation and endorsement on 2UE:

• supporting Optus and its products and services including support for progress being made by Optus in developing products and services,

• supporting important public policy aspects of Optus services,

• reading and enhancing Optus radio commercials and recording them,

• reading publicising and endorsing policy statements.144 This letter from Mr Harry Miller, which summarised the new Optus agreement,145 came less than three weeks after Mr Conde’s policy memorandum of 27 July 1998,146 which expressed concerns about such obligations.147 The Panel does not accept Mr Jones’ evidence that he did not understand his obligations pursuant to the Optus contract. The Panel finds it difficult to accept that the simple explanation of Mr Jones’ obligations arising out of the 1998 Optus agreement prepared by Mr Miller was not read and clearly understood by Mr Jones.

Mr Miller’s letter to Mr Jones of 17 August 1998 suggests that Mr Jones read his contracts and it is reasonable to expect that Mr Jones read the short clear summary prepared by Mr Miller. His appearance on-air and in giving evidence to the Panel in a quick and articulate manner, together with the quantum of the consideration payable to Mr Jones under the Optus agreement, suggests that Mr Jones read enough (if not all) of the Optus agreement so as to be aware of his obligations under the contract.

The Panel considers the coincidence, timing contents and purpose between Mr Jones’ agreements, the material supplied to him pursuant to those agreements, and his broadcasts based on that material was not accidental. These broadcasts were made in fulfilment of his contractual obligations.

Findings

–  –  –

AJ.0001.0090.

AJ.0001.0090.

JL.0003.0506.

For Mr Jones’ evidence about the letter, the Optus contract, and the policy memorandum, see Transcript, Mr Jones p. 1082-1087.

10. The provision of information to Mr Jones by his sponsors, and the broadcast by him of editorial comments based upon that material, was a matter of contract rather than of coincidence.

11. The existence of the agreements was a material fact that was not disclosed, and the broadcasts listed in Part A of Schedule 4 were misleading as a consequence.

12. The existence of a commercial agreement between Mr Jones and another party should be disclosed on-air.

6 Mr Laws’ Agreements and His On-Air Conduct Mr Laws also had a number of commercial agreements that were examined during the course

of the hearing, including those with:

♦ the Australian Bankers’ Association (Bankers’ Association);

♦ the Australian Trucking Association (formerly the Road Transport Forum);

♦ Foxtel Management Pty Limited (Foxtel);

♦ NRMA Limited (NRMA);

♦ Optus Administration Pty Limited (Optus);

♦ QANTAS Airways Limited (QANTAS);

♦ RAMS Home Loans Pty Limited (RAMS);

♦ the Registered Clubs Association of NSW (Registered Clubs); and ♦ Star City Entertainment Pty Limited (Star City).

The agreements examined in detail in this report are those which Mr Laws held with the Bankers’ Association, the Road Transport Forum, Registered Clubs, and Star City, all of which clearly illustrate a causal link between the existence of an agreement and the on-air conduct of Mr Laws. The detail of all of Mr Laws’ agreements can be found at Schedules Nine and Seventeen.

AUSTRALIAN BANKERS’ ASSOCIATION (BANKERS’

ASSOCIATION) The Agreement On 13 May 1998 Mr Tony Aveling, Chief Executive of the Bankers’ Association, appeared on ‘The John Laws Morning Show’. The interview went better than Mr Aveling had feared it might,148 given that the Bankers’ Association regarded Mr Laws as one the banks’ harshest critics.149 On 22 May 1998, Mr Christopher Stewart (who had recently commenced working for the Bankers’ Association), wrote to Mr Laws suggesting that he may have a potential sponsor for a series of short radio scripts on Australian historical topics which Mr Stewart had written (and in which he had endeavoured to interest Mr Laws and 2UE earlier in the year).150 Transcript, Mr Aveling, pp. 55, 74.

Transcript, Mr Stewart, p. 107.

JL.0003.0607; JL.0003.0608; JL.0003.0615; JL.0003.0617; JL.0003.0621; Exhibit 6 para. 2.



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