By all accounts James Warburton is a lovely guy who will make a fabulous CEO at Network Ten. So why on earth did the boys at Seven let him go?
As soon as news broke on February 23 that Lachlan Murdoch and the Ten board had sacked Grant Blackley, Seven went into overdrive to ensure its sales supremo and CEO-in-waiting didn’t defect to the rival network. That same afternoon, Warburton was called into Leckie’s office and offered the world — or most of it.
“David said he was turning 60 and he wouldn’t be around for ever, and that the role or the opportunity [of running Seven] was mine,” Warburton told the NSW Supreme Court in Sydney yesterday. Or, as he put it more bluntly in his affidavit, released by the court this morning: “This is yours, James, all yours.”
Three days later, Warburton met with Seven’s chairman, Kerry Stokes, at his house in Vaucluse and was told he could run Seven’s TV business from July 2011 and be promoted to CEO 12 months after that. Leckie would become boss of the new Seven-West group, (which came into being yesterday via Seven’s merger with West Australian Newspapers) until then.
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The next day, Warburton had breakfast with the guys from KKR, who paid $2 billion for a 50% share in Seven Media Group in late 2006, and the offer was confirmed. So the stage was set for Warburton — who was liked and valued by Seven — to be elevated to the top TV job and to stay with the network.
But the next day, the crown prince went to see the king, and the succession plan was torn up. Clearly, it was not the first time they had discussed the matter of Leckie moving aside. In fact, they had been arguing over it for months.
According to Warburton, Leckie ushered the pretender into his office with the words: “Here comes Mr Ambitious. I’ve been kicked into touch. I’ve been retired. How sad.”
Leckie yesterday denied using these words and insisted the succession plan was his idea. But Warburton’s affidavit suggests Leckie was under great pressure from Stokes to give way. And Warburton clearly doubted Leckie would actually let him rule.
“There’s no point,” he told Seven’s colourful boss, “Unless I have your honest support — which I didn’t think I had and now know I don’t, I’ll just piss off.”
Leckie agreed yesterday that Warburton may well have said this to him, but claimed his only condition had been that Warburton should allow him a little time to effect the change.
However, when news broke two days later that Warburton had signed on with Ten, chairman Stokes was extremely angry, and not just with his departing salesman. Leckie told Warburton over a glass of wine: “The chairman has lost his temper with me. He blames me. He reckons it’s all my fault. He’s had two cracks at me already. He’s just phoned back.” Leckie agreed in court yesterday that he had indeed said something along these lines.
And so Warburton walked out the door to Ten, despite Stokes promising him a $2 million base salary, a 100% bonus, $900,000 in shares and a further $479,000 in cash from an incentive scheme. On his way out he told Leckie not to worry any more: “Now you can stay as long as you like.”
If Warburton’s affidavit is to be believed, Seven saw all this coming. The sales director claims to have made his ambition clear to several Seven directors as far back as November last year. And just before the Ten job came free in February, he told Kerry Stokes he wouldn’t wait 18 months to get Leckie’s job: “It’s too long Kerry, it’s killing me. I’m bored and it’s just not a great role. Reporting to David is embarrassing. You see the good side, we see the rest.”
Warburton also took the stand yesterday. Young, clean-cut and fresh-faced, he cut a very different figure from Leckie, who was grey, pale and somewhat distracted. A key point in his evidence was that Leckie had told him at the beginning of this saga: “You know me, if you want to go to Ten, go and there’ll be no dramas. Go ahead and leave, we’ll just let you go, no dramas.”
Leckie has already rejected this allegation as “absolute rubbish”, “complete rubbish” and “stupid”. But with his own job at stake one can see why he might have said it.
However, Warburton is relying on this supposed release to escape from the terms of his 12-month non-compete clause, which seems a bit of a stretch. Asked whether he had taken legal advice about this agreement, Warburton said he hadn’t done so because he believed Leckie’s advice that he was “free to go”.
To my untrained legal eye, that would appear to be a tenuous legal argument.
And why on earth didn’t Ten check that its new man was free to leave? Lachlan Murdoch for one should know that such restraint-of-trade agreements are common. After all, he was subject to a two-year non-compete clause when he took $US7 million and jumped ship from News Ltd in 2005.
Meanwhile, old king Leckie was in great form in his court and in no need of a jester. Perhaps the highlight in his performance yesterday was an exchange with Warburton’s QC John West, who was suggesting Leckie had referred to Seven’s media buyers as “f-ckwits”. (He also allegedly referred to the directors of West Australian newspapers as “dopes” and “idiots”).
“Language, please, Mr West,” Leckie admonished him, despite being famously foul-mouthed himself. “This is getting out of control.” Even the judge laughed at that one.
“We love media buyers, they give us all this money,” Leckie continued, “It’s mostly terms of endearment.”
Shortly afterwards he had them rolling in the aisles again when asked whether he recalled (in relation to a meeting on March 2) that “the conversation came to an end and they left”.
“Well, I assume so,” Leckie replied, “as far as I know they’re not still there.”
His final shot as he left the witness stand, having destroyed the microphone by pulling it off its stand, was to call over his shoulder to the judge, “Sue me.”