ASIC launches action against ex-Tennis Australia directors Harold Mitchell and Steve Healy over 2013 tennis rights
The Australian Securities and Investments Commission (ASIC) has launched federal court action against the former directors of Tennis Australia, Harold Mitchell and Steve Healy, for allegedly withholding information from the Tennis Australia board when it was deciding on the sport’s broadcasting rights in 2013.
ASIC’s case against Mitchell and Healy relates to the decision made in 2013, which saw the Seven Network retain the broadcasting rights to the tennis for a further five years.
ASIC has issued civil penalty proceedings in the Federal Court of Australia against former Tennis Australia directors Harold Mitchell and Steve Healy
The deal was thought to be worth around $30m a year and saw Seven continue to broadcast the Australian Open, despite strong interest from rival network Ten.
At the time, then CEO of Ten Hamish McLennan told the Mumbrella360 conference: “Tennis Australia are in exclusive negotiations with Channel Seven at the moment but I think they would be mad not to put it to the open market.
“If you look at what happened with cricket the rights went up… [by 118 percent] so unless they test the market they don’t know how monetiseable it is.”
The action launched against Mitchell and Healy in the Federal Court of Australia claims the pair “withheld material information from the Tennis Australia board when it made its decision to award the domestic broadcast rights.”
ASIC claims the two directors also “failed to ensure that the board was fully informed about the value of the rights”.
The investment and securities watchdog alleges Mitchell and Healy also failed to mention the potential benefit of putting the broadcasting rights out to a competitive tender.
ASIC also alleges that Mitchell alone gave the Seven Network “confidential information about the interest of its competitors in acquiring the rights”.
It alleges Mitchell “passed on to Seven Network confidential information about the views and negotiating position of Tennis Australia’s management and board about the granting of the rights” and “downplayed to the Tennis Australia board the interests of parties other than the Seven Network in acquiring the rights.”
ASIC also claims that Mitchell “encouraged” the Tennis Australia board to “conclude an agreement” with the Seven Network instead of putting the broadcasting rights out to tender.
Mitchell was once the most significant player in Australia’s media agency world, setting up independent media agency Mitchell Communication Group in 1976. Mitchell Communication Group was later sold to Aegis Media, making Mitchell one of the global group’s biggest individual shareholders.
Dentsu bought Aegis in early 2013, creating the Dentsu Aegis Network. Mitchell stepped down from the media agency group in June 2013.
Healy was the president of Tennis Australia until March last year when he stepped down after being appointed for the third time.
Seven West Media said it was disappointed in ASIC’s decision. “Seven has co-operated fully with ASIC during this long and drawn out investigation,” a spokesperson said.
“As a bidder for the rights Seven, which had an exclusive negotiating period under its contract, complied with the process dictated by Tennis Australia.
“In Seven’s experience Harold Mitchell and Stephen Healy always acted in a highly professional and proper manner, and are of the highest character and reputation.
“As the matter is before the court Seven is unable to comment further.”
In a statement to Mumbrella, Tennis Australia said: “This matter does not relate to our current operations. As this is a legal matter and we are not a party to the proceedings we are unable to offer further comment at this time.”
Abigail Dawson was Mumbrella's senior content journalist covering event content. She left Mumbrella to move into an agency role in 2020.
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Anyone who knows – or has had the misfortune of working with or for Harold Mitchell – knows exactly what’s going on here. He’s guilty as sin. Greasing the palms of his mates. What a vile man.
This couldn’t happen to a nicer person.
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