The battle for the Fairfax Media just became even more interesting with today’s revelation that the industry regulator is conducting a review of independent director and key factional player David Evans that could see him forced to resign from the Board.
This has the potential to transform the battle for Fairfax.
At the moment three candidates are vying for just one board position. The candidates — former Australian Financial Review editor and current chair of Media Super, Gerard Noonan, former Age publisher Steve Harris and shareholder activist Stephen Mayne — must get more than 50% of the vote, in the face of a Board recommendation against them. Most commentators have dismissed their suit as a lost cause.
But at the same time as Evans’ position is thrown into doubt, candidate Gerard Noonan clearly has not given up. On his campaign website and on Twitter, Noonan is claiming to have had “very detailed and interesting discussions with some of Fairfax Media’s biggest shareholders”.
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He has also claimed that a multi-million dollar superannuation fund will be voting its shares in his favour. Noonan has declined to name names.
Noonan, it should be recalled, is on the board of the Australian Council of Superannuation Investors.
Noonan’s claims raise the possibility that while success remains unlikely, the Fairfax Board may be further embarrassed by Noonan and possibly Harris gaining what one observer called an “eyebrow raising” number of votes or abstentions.
But today’s big question — which nobody is answering — is why the Australian Communications and Media Authority is reviewing the situation of David Evans now, when his conflict has existed for at least two years.
ACMA’s spokesman, Donald Robertson, confirmed this morning that Evans’ position was under review, but would not say when the review began, what prompted it, or why it had apparently taken so long.
Is it too much of a conspiracy theory to suspect that one of Evan’s enemies on the board, or one of the candidates, might have suggested to ACMA that it was time for a closer look?
The situation arises because the Broadcasting Services Act prohibits a person from being a director of a company that controls more than two commercial radio broadcasting licences in the same market.
Evans is an independent director of Fairfax and also a board member at Village Roadshow, which controls Austereo. Between them these companies own a handful of radio stations in several cities. It seems a pretty clear conflict.
Evans was invited on to the Fairfax Board in 2005. He was seen as aligned to Rupert Murdoch, though he has a relatively catholic history in media. He has been involved in Crown Media Holdings, Channel Nine and News Corporation in the USA, and was President of Fox Television in the mid 1990s.
He joined the board of Village Roadshow in January 2007. His CV at the time is here.
Eleven months later, Fairfax Media bought Southern Cross’s radio division. It was this purchase that brought Evans into conflict with the Broadcasting Services Act. Yet no action was taken by either Board, nor, as far as we know, by ACMA.
Evans is a key player in the Fairfax Board factional wars. He was the first of the five independent directors to return fire to the Fairfax family after they launched public hostilities against then chairman Ron Walker. Evans accused the Fairfax family of having pledged Fairfax stock as security for a margin loan without disclosing this to the Board. The independent directors went on to back Walker’s desire to be replaced as Chairman by Roger Corbett, who pledged an orderly process of board renewal — something which is looking more difficult by the day.
The ACMA investigation may mean that Evans has to choose between Fairfax Media and Village Roadshow. At Fairfax he is in any case up for re-election next year, along with the two members of the Fairfax family and independent director Peter Savage.
One way or another, an interesting battle just became even more intriguing.
Declaration: Both Steve Harris and Gerard Noonan are on the board of the recently established Foundation for Public Interest Journalism, of which I am the Chair.