Killing C7
We have been following the Seven Network Limited v News Limited, or  "Seven versus the world", since the case begun with a whole area of the Cox Media web site devoted to the case (Killing C7 in left hand column).

This included a parody on High Noon for Kerry Stokes where I described Kerry like the marshall " a man too proud to run". Some may argue that he was a "rich litigant trying to acieve through the courts what he could not achieve commercially". Further I warned in the article of the judge questioning whether the Seven witnesses supported the claims for relief and that the range of outcomes did not necessarily constitute a win for any or at least most of the parties

Justice Sackville passed down a decision that rejected nearly every single claim of Seven. The judge's comments will be widely reported in the press so I will not restate them here but provide a link to his summary and to his full finding. However, a few basic conclusions are worth highlighting from the 1100 page finding

Seven had not made out that  News, Foxtel or PBL had the objective of destroying C7 and thereby substantially lessening competition.

Seven had not demonstrated that the parties crossed the boundary that distinguishes legitimate, albeit  aggressive and even ruthless competitive conduct from anti-competitive behaviour under ss 45(2) and 46(1) of the Trade Practices Act.

Foxtel , in refusing to negotiate with C7, did not take advantage of its market power.
He proposes in due course to make orders dismissing Seven's claims for relief and will direct Optus to bring in Short Minutes of its Cross-Claim.

Finally, he is deferring making final orders until the parties make submissions on costs. The judge still is seeking the parties to negotiate a mutual agreement to avoid the costs and uncertainties of the appellate process. The judge estimated the legal costs at $200 million which ended up being not much less that the damages being sought.

Stokes has to make a decision whether to "throw his tin star in the dirt" and pay out the small fortune. Perhaps, he also may reconsider bringing in hired guns from overseas for his next gunfight.

After attending the early days and getting the transcripts each day I gained the impression that the Seven case was like a train wreck in slow motion. The management of the case by Stokes, the board and the legal team is definately open to question.

As fate would have it Seven is in a far sounder financial and market position now than when it started the case seven years ago. Seven was the consistent bridesmaid in the ratings with an EBIT of about $50 million, now it is king of the ratings and likely to make over $300 million EBIT. Winning the rights back to the AFL has certainly improved Seven's market profile and though it should not be relevent to the case it probably did not help Seven's arguments.

Seven have written off most of their $100 million in costs and say they get total costs of $100 million against them taxed down to perhaps $80 million. If they win the agument on tax deductibility with the tax office as a cost of business rather than protection of capital then the additional cost may reduce to about $50 million. This is relatively small peanuts as a one off expense to Seven, its 50% private equity shareholder KKR and to the the highly successfull and wealthy Stokes.

Lets hope he will dust off his Marshalls star and move on to the next opportunity.
For media coverage, radio interviews and TV stories the Cox Media website at www.coxmedia.com.au

The Power of Seven
Have a look at a seperate story that examines the Power Ratio that Seven now has in the television market.

PBL and Dead Man Walking

I have given a number of interviews on the PBL split and correctly forecast that Eddie Macguire would not survive as CEO. 
I tried to contact McGuire in his early days and again Adrian McKenzie of CVC to offer advice but neither even bothered to return my emails. 

This may sound like sour grapes but my experience goes back to being Business manager for Michael Willesee and Trans Media Productions located at Channel Seven where Willesee at Seven contributed to Seven winning the ratings for the only three years (not incl Olympic Games) in its history from 1977-79.

When Kerry Packer and Sam Chisholm took Nine to the top for the next 28 years both were difficult and tough men but both took my calls and gave me meetings on very short notice. Further, I wrote the report in the late 1980s that accurately forecast that the Seven and TEN networks would go into receivership. These were the days of highly successful entrepreneurs in Skase, Bond and Lowy with no television experience who bought the networks and thought they could run them like any other business until the networks were brought to their knees. Its really deja vue now as the private equity groups buy into the media with their bankers attitude on how to cut costs and we see Nine being destroyed again. One only has to look at the Power Ratio story to see how much the market has changed against Nine in a short period. A contributor to the advertising/ratings success has been the amazing performance of Simon Francis running the PR function at Seven where he absolutely destroys Nine.

Turning around the momentum of a large media ship is very difficult and even Kerry Stokes with a history in the media has had a tough 10 years trying to turn Seven round again. Nine and its current management is busy shuffling the chairs on the deck as the ship tilts. The question is will the ship sink and will the gamble on the casinos succeed. This we will address another day.

Media Interviews

I have given over 50 media interviews this year so far without ever approaching the media or using a PR firm. This I do for free to contribute my independent analysis and expertise to increase public understanding of the media environment in which we live and work. In my experience of doing literally hundreds of interviews over the last 20 years is to be honest and open. I believe this approach should be employed by senior executives to present their company's policies and political demands rather than hiding behind PR spinners or directly pressuring ministers and the PM. The public will give far more credibility to the executives and their companies rather than the PR disasters we see each time a company goes into crisis management such as the Qantas fiasco. 

Interviews this year alone include  ABC and commercial radio stations all over Australia, the Australian, SMH, The Age, Telegraph, Canberra Times, Western Australian Newspapers, B&T, AdNews, AAP, Seven, Nine, ABC and SBS News, Today Tonight. The international market has also taken an interest with interviews with the Financial Times in London, French Press and Dow Joes in the US. Subjects vary from political debates and performance, social and technological trends to media issues, ownership and personalities like Eddie McGuire, James Packer and Rupert Murdoch.