Seven’s colourful boss David Leckie took the witness stand in the NSW Supreme Court this morning in an effort to set a new personal best by not saying “f-ck” before lunchtime.
The ex-Packer lieutenant sailed past his previous mark in a matter of minutes and cruised effortlessly to a new PB on the stroke of noon, without even a hint of the f-word or c-word, which normally comprise a significant proportion of his vocabulary.
But it was only five minutes before he told his own counsel, Tony Meagher QC, that a suggestion was “complete rubbish” and another two minutes before he followed that with an even more emphatic “absolute rubbish.”
Leckie was being asked whether he had assured Seven’s sales supremo, James Warburton, that it would be just fine for him to go off and be CEO at Network Ten.
“Why would I do that?” Leckie inquired.
“I am not very bright, but I’m not stupid.”
Indeed, Leckie is not stupid, or so says Seven in its legal action to stop Warburton starting his new job at Network Ten until late 2012.
And here’s how we know. Part of Warburton’s case is that he’s entitled to start work as Ten’s new CEO in July because Leckie repudiated his employment contract (which arguably ran till October) by giving him the bum’s rush from Seven’s Pyrmont offices on the second of March, when the popular sales chief announced his intention to leave.
Seven’s proof of this comes in the form of a classic syllogism: Repudiating the contract would have been a stupid thing to do; Leckie is not stupid; therefore the contract could not have been repudiated.
In support of this argument, Seven claims the following conversation took place between Leckie and Bruce McWilliam (Seven’s commercial director) that afternoon over the manner in which Leckie had barked ‘Home James’.
McWilliam: “Did you tell James to leave?”
Leckie: “Of course – I didn’t want him mixing with staff and being around whatever deals are done, it’s untenable.”
McWilliam: “You didn’t imply that he was terminated did you?”
Leckie: “Of course not – I’m not stupid. I said to him you have to go on gardening leave or whatever it’s called.”
McWilliam clearly feared otherwise, for he had been in Warburton’s offices moments earlier, assuring the sales director there was no need to go wishing him well in his new job at Ten. Warburton had replied that Leckie had told him to leave the building and said he was no longer with the network. Whereupon McWilliam had dashed, rushed or perhaps ambled round to Leckie’s office to make sure Seven’s boss hadn’t been … well, STUPID.
In court this morning, Leckie said he was extremely saddened Warburton has decided to leave.
“We have been through heaven and hell together for the last seven years. I was hugely upset.”
But he did not have him thrown from the building.
“We didn’t kick him out, there were no handcuffs, there were no security guards.”
Leckie nevertheless admitted asking Warburton to go. “Yes, I think I did. I told him, ‘We can’t have you hanging around talking to staff all the time’.”
Warburton’s reaction, according to Leckie, was “it would him a great time to have a good fish. He loves fishing.”
Whatever Leckie did or didn’t say — and however colourfully he said it — it’s hard to believe he could have done Seven irreparable damage. The next day its lawyers cleared up any possible misunderstanding by writing to Warburton to tell him he would be have to serve seven months and nine days notice and come into Seven’s Sydney offices every weekday between 9am and 5pm until October 13.
As to what Seven expected him to do there, apart from twiddle his thumbs and count his pay packet, it is not clear. But they did not want him running one of their main rivals, Network Ten.
And my hunch is that he’s not going to be doing that anytime soon. It may be October 2011, or it may be March 2012, or it may even be October 2012, if what Justice Pembroke calls Seven’s “best case” gets up. But July 2011 does not look likely to this untutored legal eye.
First, Warburton’s contract with Seven appears to require him to serve three months notice AFTER his three-year fixed term expires on 13 July 2011, unless both parties agree in writing to drop this requirement, which they haven’t.
Second, Warburton also appears to be bound by a 12-month non-compete agreement that stops him working for Seven’s TV rivals in Australia. He is bound by this — which is actually an agreement between Seven and its American private equity co-owner KKR to handcuff top talent to the network — because he signed a deed of adherence in December 2007 and because he was benefitting from an options scheme to reward these same top managers.
Or so says Seven.
If the non-compete agreement does apply to Warburton (and his employment contract is also enforced) he could be kicking his heels until October 2012.
But Justice Pembroke has suggested he has to decide whether such a long period of restraint would be “reasonable.” And he also wants to be satisfied that Warburton does possess valuable information, which he should be prevented from taking to a rival. And as a consequence, Seven probably won’t get to keep Warburton away from Ten for all of that 18 months.
It’s true that Warburton had the inside running on Seven’s bid for the 2012-2017 AFL TV rights, for which Ten is a joint bidder. But this hugely-important deal may be done and dusted within weeks — and certainly by the end of September — so this won’t shackle him for too long.
Warburton also has the dope on dealing with advertisers and knows what discounts Seven has been prepared to offer. And this could potentially prevent him going to Ten till March 2012, when the next round of TV ad deals is complete.
My advice to Ten would be to pencil that date in the diary and hope they get lucky.
And in the meantime, with Warburton following Leckie onto the stand, my advice to everybody else is that it could be the best show in town.