Joe, John, Denis and Neill Wagner
No one will be more interested in last week’s defamation verdict against Alan Jones, 2GB and 4BC than Nine Entertainment — the company that is about to buy control of Jones’ ultimate employer, Fairfax Media, which controls just over 54% of Macquarie Media.
While the judgement in favour of the four Wagner brothers of Toowoomba and the enormous damages of more than $3.75 million (plus costs which are yet to be awarded) won’t derail the planned takeover of Fairfax, it has underlined the reputation and financial damage Nine faces in buying a company containing someone like Alan Jones.
Nine is up to its neck in this story with the network already being sued by the Wagners for defamation along with journalist Nick Cater (who emerged from the Jones case with claims against him dismissed). The Nine case involves similar allegations to those levelled by Jones, but which were aired on the 60 Minutes program in 2015 with Cater in the story (and the sixth respondent in the legal action).
WIN TV (Nine’s regional affiliate at the time, now with Ten), is also in the Wagners’ sights. The station’s owner Bruce Gordon has built a 25% stake (directly and through financial derivative) in Nine and will be the largest shareholder in the merged Nine-Fairfax company.
[Bruce Gordon grows stake in Nine to nearly 25%]
Gordon revealed the acquisition of an interest in more Nine shares in a filing with the ASX last Friday about his company’s holdings of what are called cash settled swaps (with Deutsche Bank). They are a financial derivative and a way of taking interest in shares above regulated limits without having to pay for them until some time in the future. This holding will be settled once Nine has issued shares to Fairfax shareholders under its takeover offer, increasing the number of shares on issue.
Gordon wants to maintain his holding in the combined company at around 14.9%. His ownership of WIN prevents him from moving to a direct 19.9% stake in Nine or the combined Nine-Fairfax company, hence his use of these swaps.
Now, Nine is preparing its bidder’s statement and Fairfax is preparing its target statement for its shareholders in the planned $2.4 billion takeover. What both documents say about Macquarie Media, Jones and the judgement will be of considerable interest; as will what Nine says about its defamation action from the Wagners. What’s the betting Nine tries to settle this case as quickly as possible, and on a confidential basis?
Fairfax will surely try and say as little as possible about this case and Jones’ part in it. Macquarie will likely lodge an appeal just to shut down any talk during the takeover period leading up to the meeting of Fairfax shareholders in November. Fairfax will have to include an independent experts report on the value of Fairfax Media and its investments in Domain (60%) and Macquarie Media (54.5%).
Keep an eye out to see whether Jones’ long string of defamation actions and losses are singled out in either document. As it is, Jones could be seen as a considerable contingent liability for the merged company, both actually (for the two defamation suits from the Wagners) and prospectively (for future claims).
Lawyers and corporate advisers for Fairfax Media and Nine Entertainment will not have to wait for any appeal by Macquarie Media to assess the financial impact. Macquarie made $3 million of provisions in its 2017-18 accounts on legal advice for outstanding defamation actions. Macquarie Media, like Fairfax, is a self-insurer when it comes to defamation cases. That means the $3.75 million (plus costs when allocated by the court) will be met from those Macquarie provisions, plus a top-up, with Fairfax Media having to account for around 54% of the extra costs in its books as an extraordinary or abnormal item.
Who cares?
As recently as today, Toby Ralph remarked on the relative effectiveness of government in Australia. A similar remark could be made in respect of the decision concerning this matter of slander. There is due process and laws of libel and slander. The story is not unrelated to the article on Australia’s double jeopardy laws (mentioned on Friday)
Until relatively recently (taking English Law as a whole) litigation was a wealthy man’s preserve. Only after the WWI did matters change so the man in the street could seek redress; Donoghue v Stevenson being, possibly, the most famous of the era. In the (so called) modern world communication and its effects are nothing like what they were even 30 years ago. Similarly, as an aside, for forensic endeavour.
It amounts to a commercial decision as to whether Jones, with his string of failed legal suits, will be a player in the new organisation despite the extent of his audience. It is also (just as) clear that irrespective of the size of a media group there are limits to the extent that it can manipulate the news or events and inflicting damage on 2nd and third parties is no a long term strategy for the reasons that Ralph outlines.
As to the remark by Bref, it is very much an event of significance because it literally defines your options in Australia; more so than anything else.
As a side point : the award, taken on the whole, is not that large but I digress.
Look, I’m happy the Wagners were wealthy enough to take on Jones and win. Another recent case is more common where a young defamed woman won her case, but lost her payout on appeal by a wealthier adversary. So who was the appeal court looking after? Same old, same old.
At the risk of appearing to be boring we would have to know the details of where the lower court erred and the the upper court prevailed. Having made that comment, since the Plantagenets, one has got the law that one has paid for (more or less).
I suggest that a number of heads will have been pulled in as a result of this decision and some of the more well known mouths on radio will have, by now, been privy to a quiet chat.
Never underestimate the gullibility of the public – they like the snake oil the gutter meeja provides and don’t care about the label on the tin.
That is why we have government of the same types – feed ’em crap and laugh all the way to the bank.
I’m glad Jones got a boot up the ass , Its about time . The mans a bully and a trouble maker , cronulla riots always spring to mind , To be honest I think everyone likes the idea of free speech, but there is a section of the Australian media that are like a pack of rabid dogs that need to be brought to heel . I have watched the same group of conservative media control the discourse for decades and its about time something was done to wrestle our democracy back from them its not dissimilar to the way Fox news in America is ruining the world with it’s fascist output , some of the witch hunts we have seen , the way they smashed poor old duncan storrier for asking a simple question and Yassmin Abdel-Magied getting all but chanced out of the country , for what they use the media as a political weapon to attack anyone who doesn’t share their world view , it is not fair , to defame people because they dont agree with you . I would like to see more law suits leveled at these people we need a change in the culture .
It would be refreshing to see Cater on the bones of his arse.