SEN radio war: Sacked drive stars David Schwarz and Mark Allen in legal demand for almost $1m
RADIO hosts David Schwarz and Mark Allen were treated with “disrespect” when Craig Hutchison sacked them from SEN, a former insider says, as new details come out about the motivations behind the station’s merger with Crocmedia.
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LATEST: David Schwarz and Mark Allen were treated with “disrespect” when Craig Hutchison sacked them from SEN, a former insider says.
The Run Home pair is threatening $1 million in legal action for lost wages after they were sacked minutes after their show in December.
“Marko and Ox were loved and respected at SEN. They were treated with no respect to their legacy,” the ex-staffer said.
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“Hutchy’s entitled to make whatever investments and decisions but he didn’t even call them, Cathy (Thomas) did it.
“If you’re going to do that, make the call yourself.”
It comes as new details about the motivations for the merger between SEN and Crocmedia, which will be voted upon on March 15, have been revealed.
The deal, if approved, would allow SEN to move out of its Richmond studios, which is owned by shareholder Ron Hall, and into the Crocmedia studios.
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Insiders said this was a key factor in the deal because the 2000sq m Swan St site would be worth tens of millions of dollars if it was developed into apartments.
Mr Hall declined to comment when contacted by the Herald Sun today.
Documents filed with the Australian Securities Exchange show SEN shareholders were told there was a risk of legal action from its staff ahead of a vote on a merger.
A company document detailing the proposed merger of SEN parent company Pacific Star Network and Craig Hutchison’s Crocmedia highlighted the risk.
“The enlarged (SEN) will be exposed to potential legal and other claims or disputes in the course of its business, including litigation from employees,” a February 1 document says.
The document also warns a change in morale was a risk in the merger.
“Any inability to attract retain and motivate key employees and contractors could impact on the enlarged (SEN) operations,” it says.
The Herald Sun understands Hutchison was prevented from talking directly to staff until further documents relating to the deal were signed after Christmas.
There remains a lease on SEN’s Richmond building, which cannot be reviewed until after the merger vote on March 15.
Hutchison declined to comment.
DUO THREATENS LEGAL ACTION
The Sunday Herald Sun this week revealed Craig Hutchison’s sports radio station SEN was slapped with an almost $1 million legal demand for lost wages and damages by two of its biggest former on-air stars.
Former Melbourne champion David Schwarz and his The Run Home co-host Mark Allen have sent letters of demand to station management.
The pair was axed as part of Crocmedia’s bloody takeover of the struggling station.
Lawyers for Schwarz and Allen claim station bosses had agreed in writing to a binding new two-year deal with the duo before SEN merged with Hutchison’s Crocmedia.
Schwarz has demanded $562,126.93 for the work he was slated to do on his afternoon radio show and commentating on games for the sports station.
Allen demanded $418,710.46, according to legal letters seen by the Sunday Herald Sun.
“SEN engaged in conduct that, at the very least, was likely to mislead or deceive our clients,” Schwarz’s legal demand says.
Schwarz argued that the company had agreed to terms in an email and had promised to provide a contract to sign.
But it was never delivered. When Hutchison, who is being paid $883,752 as SEN chief executive, took over, the pair were sacked.
The documents detail the turmoil inside SEN and the brutal nature of their December 8 sacking.
Former general manager Cathy Thomas “cried” when she told Schwarz and Allen they were not being renewed.
SEN’S DAVID SCHWARZ AND MARK ALLEN AXED FROM DRIVE SHOW
She told them the board had “decided to terminate” the contracts.
“Mr Schwarz stated to the effect that terms had already been agreed to. Mr Allen stated to the effect that they were only ‘waiting on signatures’ and that ‘it’s Christmas, you’ve given us no time’.
“Ms Thomas became visibly upset, and began to cry.
“Ms Thomas responded to the effect that ‘it’s not my call, I know how important you are to this station ... it’s a merger and things have changed’.’”
Allen met with Hutchison four days later to discuss the decision.
The documents claim that Mr Hutchison said “the decision to terminate Mr Schwarz and Mr Allen was his and it ‘wasn’t personal’.
“He knew that the decision was ‘unpopular’, but that it was purely his decision, and he was prepared to ‘wear’ it.”
Schwarz and Allen began negotiating a new contract for their drive show for 2018 and 2019 in October last year.
The pair’s accountant, Jason Cunningham, brokered the deal and emailed acceptance to SEN on November 16.
Former board member Peter Quattro confirmed the deal had been discussed at board level and that The Run Home was a priority for the station, according to Allen’s claim.
Schwarz, Allen and Hutchison have all declined to comment on the legal wrangle.
LEGAL DOCUMENTS REVEAL RADIO WAR
CRAIG Hutchison insisted it “wasn’t personal”. But the sackings of popular SEN radio drive hosts David Schwarz and Mark Allen were emotional.
They were so confronting, former general manager Cathy Thomas burst into tears when delivering the bombshell to them.
“It’s not my call, I know how important you are to this station … it’s a merger and things have changed,” Thomas said, according to legal letters seen by the Sunday Herald Sun.
She then “became visibly upset and began to cry”. They weren’t the only tears shed at the sports station.
Ms Thomas was then to sack more staff members, including commentator Matt Granland and evenings presenter Mark Fine.
Hutchison, chief executive of SEN, loaded the gun. Thomas fired the bullets.
But after doing all the dirty work, the gun was turned on Thomas and she too was shown the door.
RADIO LISTENERS REACT TO THE SHOCK SACKINGS OF DAVID SCHWARZ AND MARK ALLEN
Details of the bloodbath at SEN over December have been revealed in a legal claim by Schwarz for $562,126.93 in lost wages and damage to his reputation.
Allen’s separate claim, which hit SEN late on Friday, demands $418,710.46 in lost wages, including a missed payment in January.
“SEN engaged in conduct that, at the very least, was likely to mislead or deceive our clients,” Schwarz’s legal demand says.
Schwarz and Allen were sacked on December 8, just minutes after their final show of the year. The pair were stunned.
They had already agreed in emails between their accountant Jason Cunningham and Thomas to a new two-year deal. Both argued initially on wages, but after being told the board would not like “push back”, Schwarz accepted a $242,000-a-year deal and Allen signed on for $155,000. They had met their new producer, Jay Mueller, who had previously worked on Eddie McGuire’s Hot Breakfast show on Triple M.
They had even recorded Christmas greetings and “promos” for 2018.
Allen told Thomas: “It’s Christmas, you’ve given us no time” (to find a spot at a different radio station). But the decision was final.
Hutchison, who is being paid $883,752 a year at SEN, agreed to meet Allen four days later.
He told Allen that the “decision to terminate” the duo “was his” and “it wasn’t personal”.
“He wanted to take the show in a different direction to achieve what he wanted to achieve,” the legal letter alleged.
“He knew the decision was ‘unpopular’, but that it was purely his decision, and he was prepared to ‘wear’ the decision.”
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The duo’s The Run Home program had been a stalwart of SEN for a decade. Schwarz was a cornerstone of the small but much- loved station, and Allen was widely regarded on the show and for his golf knowledge.
The depth of connection with the SEN audience was evident when Schwarz was drafted in to cover the breakfast slot in 2016 because it had been struggling with ratings.
Schwarz, or Ox as he was known to listeners, initially rejected the offer because of the impact the early mornings would have on his family, and the commute from his home in Barwon Heads.
But Schwarz finally agreed and a new three-year breakfast contract was signed, as well as a deal for commentating on AFL games that would run until 2019.
The switch worked. “Ratings for SEN’s breakfast show improved to the highest in five years,” the legal claim says.
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But in a decision at first curious and later disastrous, SEN moved Schwarz back to The Run Home in the afternoons and replaced him at breakfast with fallen AFL star Garry Lyon, Essendon legend Tim Watson and Channel Seven personality and Sunday Herald Sun columnist Hamish McLachlan.
The new early-morning team was paid more than $1.5 million between them. It was Lyon’s first major gig after he left Channel Nine’s The Footy Show, following news of his affair with co-presenter Billy Brownless’s wife Nicky. It didn’t work.
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In July last year ratings were down to 2.6 and barely picked up.
McLachlan did not return this year, preferring to focus on his TV commitments.
Meanwhile, The Run Home was being pumped full of advertisements, leaving less airtime for Schwarz and Allen — or Marko, as the former pro golfer was known.
Both complained when renegotiating their deals. They also moaned to Mueller in a coffee meeting in Richmond on November 20, who said it would be his first priority “as soon as he was in the building”.
According to the legal letters, Allen and Schwarz had no inkling they would be sacked.
SEN announced a merger with Crocmedia on November 22, but staff were told it was “business as usual”.
What happened next at SEN showed it was anything but. Schwarz and Allen went.
Kevin Bartlett was moved from mornings to afternoons with “Dr Turf” John Rothfield, who is also a new owner of the station.
Gerard Whateley came across from the ABC, with Mueller kept on as his producer. Crocmedia has declined to answer questions about whether Whateley was given a share in the station as part of his pay deal.
If Schwarz and Allen’s case goes to court, as they have threatened, legal costs could double the claim.
It’s a headache for Hutchison as he comes down off the high of taking his station to the NFL Super Bowl for its first broadcast of the game, led by Whateley.
But it’s not the first time he has been embroiled in a pay dispute.
The Fair Work Ombudsman took Hutchison to court in 2013 for underpayment, including of one young journalist who was not paid for seven months of her employment at Crocmedia.
Two staff members were underpaid a total of $22,168, which Hutchison repaid and apologised for.
The Sunday Herald Sun contacted Schwarz and Allen but both declined to comment.
Hutchinson also declined to comment.
At 9.30am on Tuesday March 13, there will be plenty of people having a close look at the first ratings results under Hutchison’s reign.
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