Escape from cattle class. Senior bureaucrats are supposed to be flying economy after Finance Minister Penny Wong issued an edict recently. But a person responsible for organising travel for senior management (called SES) in a Commonwealth department has been overheard saying they’ve been instructed to find savings elsewhere so that SES managers can continue to fly business class. Calling all bureaucrats — which class are your bosses flying? Drop us a line, and you can stay anonymous.

Defenceless. Speaking of budgets, Crikey took a look yesterday at how much the Defence Department is coughing up to send 127 bureaucrats to a fancy HR conference in Melbourne. Defence wouldn’t tell us, so we had a crack and came up with a figure of just over $400,000. Your taxes at work!

One insider was impressed the Air Force even had 64 HR people to send to the junket (that was their contribution to the Defence battalion). Another had this to share: “Judging from a previous experience with Defence, I would have to say that their expenditure is in direct relation to their incompetence.” Ouch. There are plenty of opinions out there about whether Defence is a well-oiled machine that could use some more dough (Tony Abbott thinks so), or whether it’s wasting money. Russell moles are more than welcome to share their tips in the interests of national fiscal prudence.

Schoolyard blue. The stoush over the sacking of Rosa Storelli, headmistress of Melbourne’s expensive Methodist Ladies’ College, has rivalled the AFL grand final for media coverage in Victoria. And it’s pitted two strong minds against each other — high-profile publisher Louise Adler from Melbourne University Publishing is the chair of the MLC board, which gave Storelli her marching orders. A well-informed tipster has highlighted the relative financial performance of MUP and the MLC: the publisher made a trading loss last year and more to the point, for the second year in a row, MUP wrote off millions. MLC made a $62 million profit last year.

It’s also interesting to reflect on the relationship between Tony Abbott and Adler. Abbott raised eyebrows when he took Adler’s side, saying the board was one of “high repute”. “It’s hard to imagine a board such as that acting precipitately or other than for good reason. I can’t comment on the details of this (situation) but I’m happy to speak up for Louise’s outstanding character and reputation,” Abbott said.

The surprise Abbott-ly intervention tells us how much two-way sucking up has surrounded him writing a book for Adler. And remember when, as president of the Australian Publishers Association, she invited him to give the speech at this year’s APA grand dinner, to a largely unsympathetic crowd — Adler’s introduction recognised the antipathy but remarked how in the future the government might change, hence listeners had to make connections, as it were.

SackWatch: Foxtel. More jobs go in media: a Crikey reader let us know that Foxtel had sacked eight people in its broadcasting division, including four editors, three presentation assistants and a manager. A Foxtel spokesperson wouldn’t confirm that number, but did say that a small number of people were made redundant, the “result of operational efficiencies achieved by technology improvements”.

Nine update: How times have changed. The inability of Bond Media to repay Kerry Packer the $200 million worth of preference shares issued in the original $1.055 billion 1987 purchase deal by Bond Media triggered Nine’s brief receivership in early 1990. It wasn’t the banks that triggered the sale, but the rights Packer held under the preferences shares.

This time it’s the huge debts held by the banks and others, such as hedge funds. By July of the same year, Packer had regained control of Nine for $200 million. Forty seven employees were terminated within days and another 100 went after cost accountants from Cooper’s and Lybrand were bought in to examine Nine’s cost structure and staffing levels. Kerry Packer famously told Nine management that they could find their savings or have Copper’s and Lybrand’s recommendation for a 25% cut in costs. Management chose to make their own deep cuts in people, programs and resources. At the time it was miserable with ordinary trade creditors stiffed or getting their money months or years later, or not at all. The financial collateral damage around Willoughby in Sydney’s lower north shore was extensive and left a lingering bitterness.

Today, it is being pointed out that the banks or other creditors could protect all the agreements with Nine by putting the holding company, Nine Entertainment, into administration or receivership, but not the subsidiaries that hold the TV licences and other investments. That’s in the event that all agreements are with the Nine Network and not with Nine Entertainment, or have Nine Entertainment as a guarantor in any way. That would complicate matters. The last thing anyone wants to do is to trigger a mass collapse of vital production and other deals. Many of those agreements are vital network assets (the recent rugby league broadcast deal for example) and have significant revenue and profit generating capacity.

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Peter Fray

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