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May 20, 2013

News Limited exec offers up to $100k in secret legal payment

The war over real estate advertising in Geelong is hotting up, with a News Limited executive offering to help pay the legal fees of an estate agent to defend himself against claims made by a publication part-owned by Fairfax.

Andrew Crook — Former <em>Crikey</em> Senior Journalist

Andrew Crook

Former Crikey Senior Journalist

A senior News Limited executive offered to pay up to $100,000 in legal fees to a Geelong real estate agent embroiled in a legal brawl with a part-Fairfax-owned rival.

A “private and confidential” email sent by News’ national real estate czar Tom Panos to Hayeswinckle managing director Danny Hayes in March, obtained by Crikey, states that under the “strictly confidential” deal News would pay 50% of his legal fees to defend himself against Metro Media Publishing, which is half owned by Fairfax.

Metro Media is suing Hayeswinckle and related entity Team 3216 in the Victorian County Court for at least $1.4 million in contract breaches and damages, alleging that it reneged on the terms of an advertising agreement with the MMP-owned Weekly Review Greater Geelong and moved its ads to News’ Geelong Advertiser instead.

Panos writes that “to assist you in your defence of the legal action brought against you by MMP we are prepared to reimburse you 50% of the legal fees that you incur … up to a total aggregate payment by us under this arrangement of $100,000”. Hayes replies that he “will talk about payment tomorrow”. It is not known whether any cash changed hands.

The other half of The Weekly Review is controlled by local agents, including, originally, Hayeswinckle. At its launch last November, the glossy masthead overseen by former Age property reporter Antony Catalano cleaved about $9 million from News’ revenue base.

A updated 19-page statement of claim, also obtained by Crikey, was lodged by MMP in court on Friday. It alleges Hayes received $215,000 in rebates, free ads and cash from the Addy in exchange for moving his ads across to News.

It is understood Hayes denies the allegations, however he declined to comment when contacted by Crikey today (although he did mention he’d enlisted a “QC” to his defence — top-line QCs charge around $5000 a day). Tom Panos did not return a message left on his voicemail, and a spokesman for News also declined to comment.

Crikey first revealed in February that Hayes had been slapped by MMP with a $1.4 million writ alleging Hayes had accepted rebates, secret commissions and a diamond ring from the News-owned Geelong Advertiser to transfer his ads. At the time, Hayes dismissed the claims as “like something out of a Steven Spielberg movie”. “The bottom line is simply this … we offer both print mediums to the Geelong public … we let the public decide which medium they want to promote their property in. We just want what’s best for our vendor,” he said at the time.

Last October, Hayeswinckle entered into an agreement with MMP — alongside 25 other leading Geelong real estate agents — to take an ownership stake in the local masthead, spend $500,000 annually on marketing with The Weekly Review and plug the title among its client base. In return, Hayeswinckle would share alongside Fairfax in the Weekly Review‘s profits. However, by December, MMP alleges that Hayes, who previously advertised with the Advertiser, had entered into a covert sponsorship agreement with News instead.

Under Victorian law, real estate agents are banned from retaining a rebate or inducements from media companies – agents that fail to pass on the “benefit” to sellers and the media companies that pay them may be liable for prosecution if the benefit is proven to relate directly to vendor spend.

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3 thoughts on “News Limited exec offers up to $100k in secret legal payment

  1. klewso

    How much is that gutter real estate worth?

  2. C R

    Is it possible Murdoch and one his “Senior” execs have been caught possibly doing something illegal? Quelle surprise. The man who micro-manages his media empire but tells anyone who will listen that nothing that goes wrong is his fault – well, none of the illegal stuff anyway.
    Oh, when will we get rid of the abcess on the australian media landscape?

  3. klewso

    In the interests of an enlightened electorate?
    To almost quote Henry II?
    “Who will rid us of this troublesome pest!”?