What is
it about the owners of the Melbourne AM station situated at 1116 on the
dial? Mark Day has called for an inquiry into the station in this column in The Australian’s Media section today – but we’ve got some much juicier detail.

The
former 3AK is now broadcasting as the Sports Entertainment Network
(SEN), after its licence was leased out by the old Data & Commerce
Ltd (DCL), which is now the ASX-listed Pacific Star Network and still
controlled by controversial retailer Ron “Pots ‘n Pans” Hall.

SEN
went into administration this week despite making a good fist of its
all-sports format which utilised former AFL stars like Bill Brownless,
Tim Watson and Dermot Brereton. But there is plenty of bad blood
between SEN, Hall and, to a lesser extent, Hall’s Pacific Star
side-kick Peter Quattro, who has been pleading ignorance about SEN’s
financial woes.

After the lease between Pacific Star and SEN was
signed, Hall assured the SEN board that he would personally assist in
raising the additional capital required by the sports station. And so
he did. Hall’s mates Peter de Rauch and Meyer Herzberg invested in SEN.
Herzberg, who owns the Rentamobile business, became SEN’s largest
shareholder and Peter de Rauch became its chairman. Herzberg also
underwrote PSN’s $5.4 million rights issue in 2004.

And the PSN board is very cosy, comprising Ron Hall, Andrew Moffat
(Hall and Herzberg’s financial adviser), Richard Szental (Hall and
Herzberg’s solicitor) and Peter Quattro.

SEN’s
board approached Hall and Quattro on three occasions in 2004-05 to
propose a merger between the two businesses, which would have generated
about $1 million in savings because PSN is also in the radio game
through its ownership of 3MP. But Hall rejected this proposal, telling
a number of people that he would “wait for SEN to fall over and then
pick it up for nothing.”

From there, it gets really interesting.
As rumours circulated that SEN was in trouble, Mark Rothfield (another
SEN shareholder with links to Ron Hall) put a proposal to the SEN board
acquire control of the business for $2 million. This was accepted, but
then Mark and John Rothfield called a meeting with SEN which Ron Hall
also attended. The Rothfield family then withdrew its offer, saying
they’d had a change of heart.

Ron Hall has allegedly told two
SEN directors and another SEN shareholder that he has repaid Peter de
Rauch and Meyer Herzberg’s investment in SEN, although this is news to
the full SEN board.

The ASX froze PSN’s shares on Monday as its
future without SEN cannot be guaranteed, although the licence remains
of value, with the likes of John Singleton and even the AFL rumoured to
be interested in buying it. Until today, all lease repayments to PSN
($91,000 per month) have been paid on time. In excess of $1.5 million
has been paid by SEN to PSN, which has forecast a profit of just
$100,000 in 2004-05.

Meanwhile, Ron Hall has already struck a
deal with Craig Kelly’s Elite Sport Properties regarding securing the
on-air personalities represented by that company. The deal is for two
months. Ron Hall was a regular critic of SEN’s selection of on-air
personalities, and has frequently been heard saying that much cheaper
“talent” is available. But now he’s scooped up the very people that SEN
used in a secret deal. Has Craig Kelly, a former Collingwood defender
and close mate of Eddie McGuire, played both sides of the street?

It
looks like Ron Hall and his cronies have decided they can run the
all-sports format more successfully than SEN. But they sure haven’t
been very helpful to their lessee in recent times. And they are a public company.