Tennis directors ‘shafted’ after pushing for probe on Seven deal, court hears
Tennis Australia directors who pushed for a probe into an alleged improper broadcasting deal with Seven were “shafted” after attempts to have the deal scrutinised were blocked, a court has heard.
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Tennis Australia directors who pushed to probe why the code gave Seven a broadcast deal which cost the governing body “millions” were “shafted” in a “shameful episode”, the corporate cop has told Melbourne’s Federal Court.
The court was told TA directors Janet Young, Kerryn Pratt and Peter Armstrong all quit the board in January 2016, after efforts to investigate the Seven deal were frustrated.
The corporate regulator, the Australian Securities and Investments Commission, is taking civil action against former Tennis Australia director Harold Mitchell and the organisation’s former president, Steve Healy, saying they improperly helped Seven West Media win broadcast rights.
Both Mr Mitchell and Mr Healy deny wrongdoing and are vigorously defending the allegations.
On Wednesday, ASIC’s barrister Michael Pearce, SC, told the court the rebel directors who wanted to investigate why the deal was signed were blocked in attempts to scrutinise it and then faced a no-confidence motion against them for their efforts.
“These directors sought to have it exposed and were shafted for that in quiet — a shameful episode,” Mr Pearce said.
Seven won the domestic Australian Open broadcast rights in a five-year deal worth $195 million in 2013.
This was despite higher offers, including one from the Ten Network for $250 million.
The court yesterday heard Dr Young feared the compromised Seven deal “cost Tennis Australia millions” and raised questions about why Mr Mitchell was pushing Seven’s interests.
But the court heard how over 2015 Mr Healy sought to assuage those fears by saying Mr Mitchell would leave the board at the end of the year.
Mr Mitchell quit in October that year but at a December board meeting Mr Healy again nominated Mr Mitchell for another year.
This followed pressure from TA’s member associations, who supported Mr Mitchell.
At the same December 7 board meeting, the rebel directors demanded an investigation of the broadcast deal.
The court heard an independent internal report ran over eight days in December examining the deal and found no conflict of interest for Mr Mitchell. But questions were raised over the report as no one doing the review spoke to Mr Mitchell or Seven.
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The court heard another TA director, Scott Tanner — who had issues with the broadcast deal and Mr Mitchell’s behaviour — quit before the independent report was delivered because he believed it would be ineffective.
“Mr Tanner saw this as coming. He said he knows where this report is going,” Mr Pearce told the court.
The rebel directors then faced a motion of no confidence, lodged by one of the member associations supporting Mr Mitchell.
They all resigned on January 15, 2016, the day before the start of that year’s Australian Open.