Ten offered to pay John Stephens ‘hundreds of thousands of dollars’ to work for no-one



Network Ten offered to pay prized programmer John Stephens hundreds of thousands of dollars to not work for rivals Seven or Nine after he refused their job offer, the network’s CEO Hamish McLennan told the NSW Supreme Court this morning.

On his second day on the witness stand McLennan, whose network is seeking a two-year injunction to stop the 67-year-old from working with current employers Seven Network or former employer Nine, admitted he had offered to pay Stephens his full salary at Ten even if he did nothing for the network.

During cross-examination this morning McLennan also failed to recall the names of programming executives at the ABC and SBS, while the network’s head of human resources admitted they had tried to keep their approach for Stephens a secret from current programming head Beverley McGarvey.

Andrew Bell, SC, representing Seven, put to McLennan the network had made an offer to pay the programmer the full salary of his contract with Ten without any requirement to work for the network, and he agreed.

Bell went on: “Let’s be clear about this. Ten is a network under considerable commercial pressure and I take it you have been addressed by the board to pay very significant sums of money to Mr Stephens for doing nothing for two years? That just emphasises how desperate your application is.

“You are prepared to pay hundreds of thousands of dollars to Mr Stephens for doing nothing, as long as he is prevented from working for the only two networks he has worked for in the last 40 years.”

McLennan replied: “I believe we had a contract with him and I felt it was the right thing to do to honour the contract. I can’t force him, but if he had a change of mind he could still work for us.

“I’m honouring the contract that John signed and he still has the opportunity to work for Ten at some point if he had a change of mind and he could still work for other companies in the media industry.”

When Bell commented that was “an extremely high price to pay to secure a competitive advantage,” McLennan said; “I think it is appropriate in the circumstances.”

Bell went on to question McLennan about his knowledge of schedulers and programmers in the local industry, after McLennan admitted he had done a review of the business when he took the job as CEO last year.

However, the network chief executive was unable to recall the names of the head of programming at the ABC or at SBS, and was unable to confidently assert whether the head of programming at the ABC was a man or a woman.

“It’s not a commercial network so to me it wasn’t really relevant to Ten,” McLennan said. In regards to SBS, he added: “SBS is very niched and different from mainstream networks.”

McLennan did name Brian Walsh, executive director of television, as the person in charge of programming at Foxtel, and when asked about who his senior staff were McLennan said Foxtel has a “very good scheduler”, Brendon Moo, general manager of Foxtel’s entertainment channels.

McLennan was also quizzed about his knowledge of the television industry in New Zealand, and when asked whether he had explored potential in that market he commented that New Zealand was a “very different market” but he had spoken to an individual with experience at a New Zealand television network a year ago, and no one else. He also said he spoke to someone from the UK who had worked in Hong Kong.

However, he restated his confidence in Ten’s chief programming officer Beverley McGarvey, who had previously worked in New Zealand, and joined the network five years ago.

He explained the limitations of Ten’s long-term contracts with US content, and he said: “There have been some poor local production decisions made over the years and we haven’t been successful in getting certain sports and I think a commitment to news and current affairs so it’s a range of programming decisions over many years.”

McLennan also reinforced his point that US content does not make up all of Ten’s schedule and a good scheduler can balance local content and sport with the US imports. And as the network fills its channels “365 days a year”, McLennan said programming is “an area where Ten can improve its performance”.

He said Ten has a team of programming and production staff of around five including McGarvey.

When Ten’s HR manager Graham Kethel then took the stand, he admitted that he and McLennan wanted to keep Stephens’ potential appointment a secret from McGarvey and were keen to sign him as quickly as possible.

Kethel said he called Stephens six to ten times and was not aware McLennan had also contacted him during that period. McLennan admitted yesterday he had called and texted Stephens several times during the contract negotiations as he was keen to sign him with the network.

“It was an executive contract negotiation,” Kethel said. “In instances of these types quite clearly the less people who know the easier and better it is.”

Kethel said he did not explicitly advise Stephens to not speak to executives at Seven about the offer, but suggested he speak to a lawyer, which Stephens said he would do.

The case continues.

Megan Reynolds


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