For the second straight year, Seven West Media and Nine Entertainment Company managed to schedule their AGMs to overlap on the same day. What a coincidence from fierce rivals Seven and Nine. Thankfully, due to the benefit of online AGMs, it was possible to fire in a few written questions at both events.
The clash wasn’t the only thing they had in common yesterday, as both chairs were up for election. Nine boss Peter Costello received an emphatic 98.9% of the vote, while Seven West Media’s chairman Kerry Stokes was re-elected with a 95.5% mandate (although 619.7 million of his 903.4 million votes in favour were from the parent company he personally controls, Seven Group Holdings).
There were also some striking differences at these two big media companies. Nine has proudly remained off JobKeeper rather than being a media company dependent on the government.
Seven had no such qualms, revealing that it had received a total of $40 million in JobKeeper payments so far this year.
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While Seven didn’t use these funds to pay dividends or executive bonuses, is anyone else troubled by the fact that a company controlled by a man who the AFR recently valued at $6.3 billion had his hand out for so much welfare?
Seven West Media’s revenue only fell 14% to $1.42 billion in 2019-20 so how they qualified for JobKeeper is a mystery. Companies with revenues above $1 billion were supposed to suffer a revenue drop of more than 50% to qualify. Perhaps the wrinkle in this record-breaking boondoggle program was that you qualified just by forecasting a 50% revenue drop, even if it didn’t eventuate.
If you were wondering why Seven West Media hasn’t produced many stories about JobKeeper rorts, now you probably know why. Seven also failed to disclose how much JobKeeper it received in its 2019-20 accounts, despite ASIC issuing a guidance note to companies encouraging this practice.
Elsewhere, The Australian’s Margin Call column was predictably keen to use any morsels they could find from the Nine AGM to lob some grenades at their largest commercial rival. They latched onto the question about whether Nine CEO Hugh Marks was in a relationship with his executive assistant.
“It is correct that it was published. I don’t believe there is anything that has breached the company’s policies or its code and I don’t believe it warrants any further engagement.”
The Australian commercial media is always full of internecine battles. Kerry Stokes was asked yesterday why he is personally funding the defamation action Ben Roberts-Smith is taking against Nine.
The answer drew interest from the AFR today as Stokes lauded Roberts-Smith as a “very valued executive” who had “performed excellently” as general manager of the Seven West Media business in Queensland. What an SAS solider knows about media is not exactly clear but Stokes has demonstrated enormous loyalty to the Victoria Cross winner.
The big “war hero” from Perth might be very good at eliminating the opposition but does he play fair? This might become clearer with the release of the long-awaited Brereton war crimes report next week.
Seven and Nine are quite starkly contrasting businesses these days. Nine has the benefit of a diversified portfolio taking in radio, Domain, Stan, the television network and the old Fairfax newspapers.
Seven has been paring back rapidly and is down to a seven-day-a-week newspaper business in WA and the television network after this year’s sale of its struggling magazine business.
As the SMH noted today, Stokes defended a range of associates at yesterday’s AGM, including one of his Seven West Media independent directors, the former Crown Resorts executive chairman John Alexander, along with media buyer Harold Mitchell, who was criticised in a recent Federal Court case brought by ASIC for cosying up to Seven during the Tennis Australia TV rights negotiations in 2012-13.
As Crikey reported last month, Seven has controversially brought Mitchell in to be an independent valuer in its current dispute with Cricket Australia over their TV rights deal.
And speaking of the cricket, both Stokes and his Seven CEO James Warburton made strong comments defending their recent attacks on Cricket Australia yesterday for serving up disappointing content — but they were keen to stress the concern related to the administration rather than the players themselves.
After Seven Group Holdings spent almost $800 million on a 20% stake in Boral this year, Stokes is clearly a billionaire who has more than enough money to keep supporting Seven West Media without ruthlessly breaking commercial contracts.
Yet for some strange reason he refuses to lead a recapitalisation of Seven West Media that would reduce its crippling $425 million net debt. Maybe it’s all about crying poor when attempting to renegotiate sporting rights deal.