At 10.15 am this morning, the
Seven network’s multi-million dollar court case against the rest of the
Australian commercial TV and media industry kicked off in the Federal
Court in Sydney before Justice Ronald Sackville.

Seven’s legal costs look certain to easily exceed $50
million while the costs of the 22 defendants will
collectively be in the tens of millions of dollars. If
Seven loses, its costs could escalate dramatically
(especially if any appeal fails) because it will be up for some or all of the 22 defendants’ costs.

The
stock market is wary of these costs: a loss could conceivably destroy the
company’s earnings in the year in which the bills fall due and some investors
have criticised the company for pursuing the case
and cutting profits. But
Kerry Stokes owns around 44% or so of Seven and he seems sanguine about the cost,
seeing as he’s bearing (or will bear) the largest
proportion.

It’s a
complex case revolving around claims by Seven that the network’s
fledgling pay TV business C7 was strangled by a conspiracy between the likes of
News Ltd, Nine Network, PBL, Foxtel, Ten Network,
Telstra and a host of others.

More than 50,000 documents have been discovered and well over 50
witnesses are down to appear, including former Telstra CEO, Ziggy
Switkowski, Ten boss (and former PBL CEO) Nick Falloon, NRL CEO, David
Gallop, former AFL CEO, Wayne Jackson, and Stokes himself. He’s
expected to be in court sometime next week as the first up witness for Seven.

Seven
spent $27 million in the year to June on this case and expects to spend a
similar amount this financial year, with most of it coming in the next three
months. Seven’s
preparation for the case has been extensive.

Media who have expressed interest in the case have received
a large folder with extensive background information including Seven’s
statement of claim, application, bios of the Seven’s barristers,
including the London whiz, Jonathon Sumption, and summaries of claims
and defences from the defendants.

Seven and the Federal Court have arranged for TV pool coverage from
ABC TV, still pool coverage from News Ltd, while a separate court room
near the hearing room (21a on the 21st Floor at Queens Square) has been
set aside for the first three weeks as a media room. A TV monitor will
show proceedings and media can tape the audio for transcription
purposes only and a “real time transcript” will be viewable and
searchable on this monitor, according to the court’s director of Public
Information, Bruce Phillips.

The
arrangements are the most detailed and the preparation most thorough for an
ordinary commercial law case: only the HIH Royal Commission comes close in
recent years to the level of access for the media and public to the case on a
day by day basis.