Can Southern Cross clean up dodgy 2UE ethics?
The radio world is buzzing over the Southern Cross purchase of 2UE. Will they sack Jones and Laws? When will slasher Bell wield his famous axe?
Few people realise that Southern Cross has the Canadian controlled Ten Network as its largest shareholder with 15 per cent. It is therefore not surprising it runs Ten's regional Victorian, ACT, southern NSW and Tasmanian affiliates. Ten is widely known as running a low-cost, low quality outfit for its Canadian parent Canwest which openly flouted the foreign ownership restrictions and have so far made about $2 billion from its Ten investment.
But the 1998 purchase of Channel Nine Adelaide from the Lamb family for $96 million also put Southern Cross into the Packer camp. Since this deal was done, Southern Cross radio presenters such as 3AW's Neil Mitchell and 6PR's Paul Murray have signed contracts to contribute programming to Channel Nine. Southern Cross is also firmly entrenched with the News-PBL-Channel 10 consortium that has bought the AFL rights and will promote the bejeezers out of footy.
Increased concentration of ownership is unquestionably bad and Southern Cross has been willing to use its political power in the past. Company founder John Dahlsen was chairman of the Herald & Weekly Times when Hawke and Keating got sick of their right wing editorial policies and changed the law so Rupert Murdoch could buy it and control 70 per cent of Australia's newspapers.
Rupert was obviously grateful to his Labor mates for this and many of the old HWT conservatives then decamped down to 3AW which was unquestionably biased towards the Liberals under Jeff Kennett. Afterall, Southern Cross was chaired by former National Party Minister Peter Nixon until he retired last year.
Tracie Winch wrote a cover story for The Age's Green Guide section last week which said that 3AW's greatest challenge was "trying to convince others that the station is not what some call an unofficial arm of the state Liberal party".
Given that Liberal Party powerbroker and Peter Costello's best mate Michael Kroger said Alan Jones was responsible for the Libs winning the 1998 Federal election, Southern Cross might choose to keep him on and then punt John Laws who is a Labor man and due to retire soon anyway.
Channel Nine's news boss Peter Meakin would love to sack Alan Jones from the Today show but James Packer insists he is a useful influence pedaller for the empire and saves his bacon every time.
When Kennett was looking for someone to recommend the neutering of former Auditor General Ches Baragwanath, he called in Southern Cross founder John Dahlsen to be on the "independent" business committee that did the job for him.
The voters thoughts this was appalling and turfed Kennett out and then Steve Bracks cited the restoration of the Auditor's powers as his proudest achievement in the first 12 months under Labor. Naturally, John Dahlsen has never been mentioned in this context on 3AW. I would have thought an interview with him asking whether he regretted the neutering would be a good newsworthy story for the station which gloats it is the most "influential" in Melbourne.
With a NSW election due in March 2003, Bob Carr and his government might be very nervous about such a conservative company taking the reins of Sydney's most influential radio station.
However, the good thing about the Southern Cross purchase is that they might clean up those shockingly unethical presenters John Laws and Alan Jones at 2UE.
Neil Mitchell again described Jones as "appalling" last week and we look forward to both Jones and Laws being stripped of their remaining appalling sponsorship deals that brought Australia's broadcasting industry into disrepute in the cash for comment scandal.
3AW's on-air presenters refuse to cross-promote with Jones and Laws, instead doing their news crosses with John Stanley, who has just signed for another two years at 2UE. Neil Mitchell even refuses to do live reads which is a commendable stand. The 3AW web site is still under construction but we believe Mitchell doesn't even have a car sponsor. Compare that with Ernie Sigley who we hear is getting paid $250 a live read on 3AW and gets a free Audi.
Will slasher Bell take an axe to the staff?
Sydney radio sources advised Crikey that Southern Cross Broadcasting wasted no time sacking 12 staff at 2UE on Friday and were planning for more to go on Monday this week.
However, CEO Tony "slasher" Bell was quoted in The Sunday Telegraph denying this was the case.
"No one left last week, no one is leaving next week or the week after, or the week after," he told the Sunday Tele.
Slasher has already shown himself to be careful with his words when denying that station had been sold last just because the final documents had not been signed.
When Southern Cross butchered Nine in Adelaide, it happened a couple of months after the purchase so someone should ask Slasher just how many weeks it'll take him to size up his targets. No-one should resign from 2UE or 4BC. Hang around for the big redundo cheques coming your way.
That was the game plan when they bought Nine in Adelaide. Southern Cross paid $96 million for it and then spent an additional and pre-planned $4 million in redundancy costs which were added to the cost of the acquisition in the balance sheet rather than expensed through the profit line. In this case, much of the programming gap was filled by east cost material from Nine. Expect 3AW to start providing much of the 2UE content after Slasher is finished.
Speaking after the 1998 Southern Cross AGM, company founder John Dahlsen told Crikey that Bell was a particularly talented cost-cutter. If you read the full Stock Exchange announcement, it is blatantly obvious that he is poised to strike again.
Slasher is already demonstrating that he's the man in charge. We hear that he was in Sydney taking control of his latest acquisition on Thursday and sent a message to Laws to go and see him after the show.
Laws did his usual trick of "tell him I'll see him in MY office". But the Bell boy wasn't having any of that so Laws had to go to see him. When he came back he said to his staff "well the new bloke's tough, I'll give him that".
But Laws is already publicly letting it be known that he won't tolerate a cut to his annual salary and cash for comment deals which total about $5 million a year.
The Sunday Telegraph, which axed a column Laws had last year, reported that the man with the golden tonsils vowed he will not take a pay cut when he signs his anniversary contract with Southern Cross at the end of the year.
Whilst he quit his lucrative Foxtel show last year, Laws wants to notch up 50 years in radio in 2003.
But he told his cash for comment manager John Fordham over dinner on Thursday night that "I'm not prepared to take even a 10c pay cut. However, I may entertain a 10c increase."
Compare that with Steve Price in Melbourne on 3AW who has the two hour Drive time shift and is program director. Rather than getting the two salaries he deserves, Price told his listeners on Friday that he earns less than the $250,000 a year that the PM gets. We understood that Price was on about $350,000 but clearly he must have taken a pay cut from that level as he would not mislead his listeners.
So Laws has gone public saying no pay cut and Slasher Bell has already gone public saying that there will be no pay cut.
Slasher told the Sunday Telegraph: "It's (a pay cut) never been considered. John Laws is the superstar of Australian radio. His show is broadcast all over the country."
"We hope to see him at 2UE way beyond his 50th anniversary on radio."
When assessing whether the unethical practices of Laws and Jones will be cleaned up, you cannot ignore the fact that Southern Cross appears to have lowered its ethical standards in relation to the contra deals that its presenters do.
Remember how they sacked evening presenter Bruce Mansfield in December 1999 after his former contra for comment manager Rash Ash Long leaked all manner of dirt to The Age. Well this is what 3AW general manager Graham Mott said at the time:
"Now I hate to say this, but the fact is that the station's integrity, the business of 3AW and Southern Cross is greater than the individual. And if an individual makes a choice to breach their contract and policy, then as sad as it may be, they can't be here."
And he went further in explaining this rationale to The Age:
"The difference is that in this case, it's not a cash-for-comment case ... the case is someone who's used 3AW air time in order for personal gain. That is strictly prohibited under our policy and the terms of contracts."
Mott went on to describe Mansfield as a 'disgrace' and a 'liar'.
But Mott put a positive spin on things by claiming of Mansfield's dismissal: "I think something happening like this clearly shows that the station is serious about the integrity of our business."
Rash Ash later reported that Steve Price even used the word "theft" on air to describe a broadcaster using a station's air time to promote businesses, without the station's authorisation. Isn't that the sort of thing that John Laws and Alan Jones did.
But after this holier-than-thou stuff about ethics, 3AW then turns around and rehires Mansfield when Derryn Hinch's ratings were not up to scratch.
This has damaged 3AW's reputation and Mansfield's rating are now about half what he did before his sacking so it is backfiring commercially as well.
Slasher has quickly laid the groundwork for not taking an ethical approach to Jones and Laws by telling Neil Mitchell last week that cash for comment was "beaten up" and "nothing illegal" had happened. Boy, are we looking forward to standing a candidate for the Southern Cross board on an anti-cash for comment platform in November. We've done this before and will do it at again at the NRMA and the Commonwealth Bank AGMs if they are still paying Jones or Laws by November.
We'll be writing to both the ABA and the ACCC this week expressing concern about the further concentration of media influence in Australia and the inability of the ABA to eleminate cash or contra for comment deals on commercial radio.