Seven accuses Ten of trying to buy ‘anticompetitive result’ in Stephens case

Ten 2sevenLawyers for the Network Seven have accused free-to-air TV rival Network Ten of trying “buy an anticompetitive result” by seeking to stop prized programmer John Stephens from working for them or Nine for two years.

Both networks must now wait for a decision in the case with NSW Supreme Court Justice James Stevenson adjourning the hearing to make his ruling, with Ten claiming Stephens was induced by Seven executives to walk away from a signed deal with them two months ago.

In his closing David Studdy SC, legal counsel for Network Ten, rejected claims from Seven an injunction would leave the 67-year-old open to “idleness, destitution or sterilisation”, as well as Seven’s claim Stephens’ contract period did not comence until June, his official start date.    

Ten CEO and chairman Hamish McLennan had negotiated a contract with Stephens to join the network for two years as director of programming and acquisitions, working three days a week, with one from home, with the support of Beverley McGarvey, chief  programming officer at Ten, and her team of programmers and producers.

However after Stephens agreed to the deal, said to have included a large remuneration package, he backed out, and Studdy argued this was a result of his communication with executives at Seven about his resignation from the network and decision to move to Network Ten.

He argued Seven executives were aware Stephens had entered into a contract with Ten and that it was a “highly incentitive offer” as Stephens had said in his email communication with them that it was a very generous package as well as providing details of the part-time nature of the role.

Seven executives acknowledged, internally, that Stephens should not go to Ten, he said, and this was demonstrated in an email from COO Nick Chan proposing to offer Stephens “the same money” to take a job with Stream Co, Nine’s new online streaming venture, Studdy said.

In the email sent on March 6 to Seven CEO Tim Worner, Chan also said Stephens “wouldn’t be the first person to walk away from a contract,” Studdy said.

As Stephens wavered about his decision, Seven executives told Stephens they would provide legal support if needed and lawyer Bruce McWilliam emailed him an attachment he instructed for him to send on to McLennan at Ten, effectively taking the decision not to work for Ten. At that point Stephens asked for time to think about his decision over the weekend, the court heard.

He said: “Seven adopted a concerted coordinated campaign by its most senior executives to launch a two pronged approach to prevent Mr Stephens from performing his agreement or at least engaging in that strategy that would incur a breach of contract.”

However Andrew Bell SC, representing Seven, argued Ten had applied more pressure than Seven on Stephens that weekend. He said that by responding to McWilliam that he was leaning towards his resignation but wanted to have the weekend to clear his head and think before making his decision showed he had made up his own mind.

Worner had then replied to him, calling him “old dog” in an email that acknowledge he needed time to think and said he did not want to stress him out and was available if he wanted to talk.

On the same weekend Ten’s HR manager Graham Kethel turned up at Stephens’ house with a bottle of champagne, Bell said.

He highlighted the covert nature of Ten’s negotiations, the speed at which they sought to secure the contract, and persistence, with McLennan and Kethel calling him several times over a seven or eight day period, including the time he was in hospital and in recovery, as indicative of Ten applying some pressure for a deal.

Seven’s counsel also argued the turning point for Stephens occurred when he realised he would not be able to do his job unless he was there full time and told McLennan as much.

“That’s a real insight into the evolvement of Mr Stephens’ thought process, an insight into what caused the change of heart,” he said. “Put that message with the fact that he put to Seven that he would be the one making decisions and he needed the time to do this.”

As he sought an injunction preventing Stephens from working for Seven or Nine, Studdy said Ten would pay Stephens the salary agreed for the two year contract in terms of injunctive relief, as he would not be able to work for the other free to air networks.

Studdy dismissed concerns Stephens would be left at risk of “idleness, destitution or sterilisation” as the programmer had made clear to McLennan in their early contract negotiations that he had been intending to retire at the end of 2014, and that he had sold his vineyard and was interested in spending more time with his family.

And he argued he was not “buying an injunction” as it was a normal procedure exercised in cases such as that of Spice Girl Mel B, who last year was prevented from breaking her contract with Seven to move to Nine to present Australia’s Got Talent.

He also submitted that Stephens would have job opportunities beyond programming as his skill set, outlined in an email to McLennan that noted the range of experience he had gained over the last 38 years, including as a TV presenter, was broad.

However Bell said Ten gave no evidence of other opportunities out there other than theoretical opportunities at networks other than Seven and Nine and argued Ten was seeking to buy an injunction and an anticompetitive result.

“You can’t buy an anticompetitive result secured by injunction,” he said. “The offer is not as you understand it – an offer to Mr Stephens – it’s an offer in the nature of the undertaking of the court to condition relief in terms that he be restrained from working for Seven or Nine. The presence of Nine in there is really the proof of the pudding of the anticompetitive relief.”

Bell also argued Ten had failed to prove Seven executives knew Stephens had signed a fixed term contract with Ten, not terminable with reasonable notice.

He said: “You have to know that what you are doing will necessarily entail or bring about a breach of contract, and not only has Ten not proved that, it’s not enough to know that there is another contract, otherwise every head hunter who approaches someone who is employed with another opportunity would breach it.”

However Seven’s counsel laid his main argument on a point that there could ultimately be no breach of contract as the contract as it was not brought into force until Stephens started the job on June 9.

Ten however argued the contract was “afoot” and effective from the time it was first agreed by Stephens.

A decision is expected in the coming weeks.

Megan Reynolds


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