While Amber Harrison will look to how she will pick up the pieces of her life after yesterday’s court ruling against her, Seven West Media will go back to fighting another battle — how to survive in an industry increasingly difficult to navigate.
When Harrison first appeared in the media with her claims about her affair with Seven CEO Tim Worner last December, Seven’s shares were trading around 78 to 82 cents. Yesterday when Seven’s crushing judgment was confirmed by the NSW Supreme Court, they ended at 79.5 cents. But they had risen more than 14% from their most recent low a month ago of 69.5 cents.
Harrison and Worner had a consensual affair while she was working as an executive assistant to Nick Chan, then-CEO of Seven’s Pacific Magazines, which ended about mid-2014. In July 2014, Seven began an investigation into her credit card usage, finding she had misused it. In November that year, she left the company after signing two deeds promising not to talk about her affair with Worner or disclose confidential information, among other things, in return for a payout. Harrison has said she only breached this agreement when Seven stopped paying her.
Seven took her to court to enforce those deeds in February after Harrison joined Twitter to publish detail of the affair. Harrison had fought the gag order but last week said she would agree to it. Justice John Sackar ordered yesterday that she pay Seven’s costs in the NSW Supreme Court, which she said in a statement she could not pay, saying Seven knew the order would bankrupt her.
Sackar said Harrison had breached the deed numerous times, “and these breaches have been persistent and flagrant”. Seven had offered to settle in February, but Harrison didn’t take the offer. The court did not accept her claims she had been manipulated by Seven and that the company had deliberately used its deep pockets to increase her legal costs.
Harrison told the ABC’s Peter Ryan she expected Seven would pursue costs against her, and that the legal process had been difficult:
“Oh, litigation is your life, whether you do it in public or you do it in private. Mine, obviously, has been extremely public. The last week: bruising. You know, I think that they won in court by bankrupting me, but the court of public opinion is very different and I’ve had overwhelming support. So now they have control of mine and my child’s future and I have to figure out how we’re going to live and raise, and how I’m going to raise him under this.”
Seven’s share price is up 14% in the past month as the messy court case came to a close yesterday, with legal costs awarded to Seven.
The increased share price has added about $170 million to the company’s value — a big return on investment for the hardline legal attack.
A year ago this week, Seven’s shares were trading around $1.14. Yesterday they closed at 79.5 cents, having hitting a low of 64 cents earlier in the year as the combination of publicity from Harrison’s claims and growing concerns about the slump in media ad spend undermined the value of Kerry Stokes’ key media company. While the Harrison case and her campaign against Seven and CEO Tim Worner have taken a toll, the financial impact has been less than many analysts claim. The moral impact is very different.
The campaign to crush Harrison has certainly helped steady the slide in the share price and rebuild it because the company has not produced a trading update to influence the share price and has been noticeably silent in the wake of the collapse of the Ten network and some analysts’ questions about Seven’s performance. Rival Nine and even Ten (plus the regionals like Prime) have produced updates to the market in the wake of the federal government’s one-year abolition (by regulation) of TV licence fees. Seven was silent, and some investor wondered why.
Seven said in February it expected full-year underlying earnings to be down approximately 20% — deeper than the outlook from its AGM, when it indicated the fall in underlying earnings would be at the lower end of a 15% to 20%. That is what Seven will be judged by among investors, and what it says about 2017-18. Seven is expected to produce its results in the second last week of August, if past timing is followed. One thing to watch for is how Seven treats the costs it has won from Harrison and whether there are any write-offs. If there are it will be recognition that the win over her was an illusion — a very expensive way of shutting her down. If there are no write-downs, you can bet they will come when Harrison becomes bankrupt.
Norman Mailer was spot on: you don’t know a woman until you’ve met her in court.
It also applies to a man.
Harrison took an expensive gamble and lost. I have no sympathy for her after learning the size of her initial payout and subsequent offers.
You mean the one they never actually paid her?
I don’t know what her initial payout was, but have to admit that she is correct in pointing out that corporate behemoths use the courts not for justice but for punishment.
Whatever else, I can’t respect an organisation where disrespect and vengeance are clearly part of the culture. Noted that another uppity woman has been brought down, well done, you dragon slayers of Channel 7 blokedom.
I’ll bet the judge and lawyers had a good chuckle over drinks at the club later
The legal profession is the 3rd oldest, utterly meretricious.