The decision of the Nine Entertainment board to host political fundraisers at the company’s Channel Nine studios in Sydney this week has brought into sharp relief the question of whether the company has enough credibility to claim it is “independent, always”.
For starters, having a partisan figure such as Peter Costello as chairman raises immediate questions about independence. This is even before considering the optics of helping the federal Liberal Party raise $700,000 at the $10,000-a-head fundraiser on Monday night.
How on earth can a media company possibly expect to be treated as impartial when it is chaired by a warrior like Costello, who remains active in Liberal politics — posing for pictures with Treasurer Josh Frydenberg last year and receiving support to continue what is now arguably an excessive 10-year run on the Future Fund board (with the last five years as chair). Indeed, such is the tightness of the relationship, Frydenberg and Scott Morrison gave Costello another five-year term as Future Fund chair commencing February 14 this year.
If Nine wanted to reassure sceptical journalists about its independent credentials it would bring forward the expected Nine chair transition from Costello to former Fairfax chairman Nick Falloon, who is waiting in the wings as deputy chairman. Costello has already chalked up six years on the seven-person Nine board, with more than three years as chair, so it would be nothing unusual from a tenure perspective to make the change in the near future.
If he doesn’t go voluntarily, the question will arise at the 2020 AGM when he is next up for election and will almost certainly have to vouch that any additional three year term would be his last.
Costello was always a strange fit for a company that owned the iconic Fairfax newspaper mastheads given that, like many Liberals, he has had a long-running antipathy for the papers courtesy of their alleged left-wing bias.
Indeed, that lack of respect is reflected in the fact that Costello delighted in leading Nine’s aggressive takeover push to pay a premium for Fairfax last year. He was able to assume the chair role and also dictate on questions such as the company name. The Fairfax brand was foolishly buried, which remains a bizarre decision given its reputation for quality and credibility was far stronger than Nine.
The board’s decision to push ahead with these fundraisers showed little respect to the tradition and culture of the old Fairfax newspapers journalist, so the backlash launched on Tuesday via journalists’ union the MEAA was hardly a surprise.
It is unclear why the MEAA chose to send their stern letter only to Nine CEO Hugh Marks and newspaper boss Chris Janz, rather than chairman Costello, given that he and the board must have given Marks the all clear to go ahead with the fundraiser.
While this may be enough to trigger a backlash against Costello’s position as chair, perhaps an even better move would be a constitutional amendment at the upcoming AGM to change the name of the company to Nine Fairfax Holdings. A constitutional ban on any company funds being provided to registered Australian political parties, or political candidates of any persuasion, would also make a lot of sense.
Sadly, Fairfax has a long history of partisan players climbing the ranks in its boardroom. Given that late former chairman Ron Walker had a controversial history as a property developer and was also the most successful Liberal Party fundraiser in history, he should never have been appointed to the board, let alone installed as chairman.
The same goes for former Woolworths CEO Roger Corbett, who kept his long-time Liberal Party membership quiet during most of his tenure on the Fairfax board but went on to slam Kevin Rudd on Lateline before later chairing Tony’s Abbott’s Federal Electorate Committee last year.
There have been several other questionable appointments to the Fairfax board. How David Gonski — the long-time Packer family adviser and now joint-executor of Kerry Packer’s estate — got on there is hard to fathom. Indeed, at one point, Fairfax shared three members with the board of Westfield: Gonski, Fred Hilmer and Dean Wills.
Another shocker was the appointment of long-time Murdoch family adviser Mark Burrows to the Fairfax board. Burrows left when it become apparent he was advising Lachlan Murdoch’s attempt to privatise the Packer family’s listed media rump, Consolidated Media Holdings, in a $3 billion deal back in January 2008.
The board blew it this week, shining a bright light on Peter Costello’s chairmanship in particular.
At the very least, we need a detailed public statement from Costello and the board explaining what their involvement was in the decision and what policy changes they are making to ensure it never happens again. They can’t just hide behind management on this one.
With a mining billionaire like Kerry Stokes controlling Seven and another billionaire in Rupert Murdoch trashing journalistic ethics on a daily basis through his gerrymandered control of News Corp, it is imperative that Nine’s governance and independence remains pristine.