Costello Nine

What is it about Australia’s media company boards and former conservative pollies? It seems that, in Australia, every board needs to have at least one.

Nine has the Howard government’s former treasurer, Peter Costello, as board chair. Seven West Media has former Victorian Liberal premier Jeff Kennett as a board member. And News Corp has not one, but two — former New Hampshire Republican senator Kelly Ayotte and former Spanish prime minister José María Aznar.

That conservative political connection at the board level should ring alarm bells for journalists working within the company that these boards oversee.

Like all company board seats, they’re nice little earners for part-time work. As Nine chair, Costello earned about $340,000 in 2018 from his board salary, fees and superannuation; not much less than Scott Morrison would have earned in that same year for doing Costello’s old job as federal treasurer.

Ayotte and Aznar earned about the same for their News Corp gigs. Kennett picked up around $127,000 on the Seven West board.

The ABC has no former pollies on its board, and hasn’t since a single term for former South Australia Labor premier John Bannon in the 1990s. It has — particularly under the Howard Government — had its fair share of conservative political activists, such as recently resigned Victorian Liberal Party president Michael Kroger, and culture warriors such as Janet Albrechtsen and Keith Windschuttle.

Board seats — both public and private — have long been actively sought sinecures for once-were-politicians. As then-senator Gareth Evans is said to have quipped back when Qantas was still in public hands: “The Qantas board is what a government needs when it hasn’t got a House of Lords.”

It’s not all about the pay-off. Former politicians bring skills and experiences that are often lacking in the usual suspects you’ll find on boards of private companies: financial types, corporate lawyers and C-suite managers. The politicians, at least, understand how politics works, which was surely useful when Nine’s chair’s former policy adviser, Mitch Fifield, was responsible for steering through the changes to media ownership laws that subsequently permitted the Nine-Fairfax merger.

And as ministers, they have experience in managing large complex bureaucracies, even if, at times, it’s been the bureaucracy (*cough*, Treasury) managing the minister.

More disturbingly, as you’ll hear from any editor or journalist who’s been on the end of a politician’s phone call, politicians think they know how the media works — and know it better than the media itself.

So what happens when they end up on the board that’s overseeing those editors and journalists? Journalists may be more relaxed when the ex-pol is one (or even two) among many or when the company has a dominant (if not domineering) shareholder who actually runs the company.

But as chair of Australia’s largest media company — and one that lacks a dominant shareholder — Costello has become the most influential ex-pol in Australian media. Although Nine CEO Hugh Marks is clearly in charge of the company, Costello appears to be an active chair. He is reported to have been the one who formally approached Fairfax with the merger offer.

The jury is still out on the merger as, like all media stocks, Nine has significantly dropped in value since it was announced. Strip out the value attributable to the holding in Domain inherited from Fairfax (about one-third of Nine’s now market cap) and the new, larger Nine is worth significantly less than the former, smaller Nine was the day before the merger last July. So much for the $4 billion local champion that was going to take on Facebook and Google!

It is repeatedly speculated that Costello is interested in making a return to active politics as party leader (and, presumably, PM). Costello, himself, has never publicly indicated any interest, although he regularly comments on political affairs from a Liberal Party perspective.

Nine waives off concerns by pointing to its commitment to abide by the charters of editorial independence that have bound owners of the Sydney Morning Herald and The Age since 1988. The charters are an important guarantee (disclosure: I helped negotiate them). But the words rely on strong editors, supported by an ethically committed and industrially active journalist corps to uphold them.

Should ex-pollies be on media boards? Write to [email protected] with your full name and let us know your thoughts.

Peter Fray

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