Alan Jones is proving to be a very expensive shock jock for Macquarie Media with another multimillion-dollar provision in the company’s accounts for unspecified legal costs.
Macquarie, which is 54 per cent owned by Nine Entertainment, this week reported its net profit was nearly halved to $7.6 million.
High legal costs were again an important part of the broadcaster’s problems.
The accounts for the past financial year include $4.816 million in “legal claims”, the largest of the company’s significant items.
That comes after the creation of a $3 million provision for unspecified legal costs in the previous financial year – a provision that seems to have been insufficient.
In September, Macquarie and Jones copped a $3.75 million defamation verdict over his repeated and very serious attacks on Toowoomba’s Wagner brothers.
Add a million or so for their own legal costs and it’s easy to run up some serious money.
But the 2018-19 accounts contain another hefty provision for “legal claims expense” – $3.2 million – which carries forward into this financial year.
One might wonder who else has been defamed lately.
The annual report explains: “Provision for claims totalling $3.2 million (2018: $3.0 million) relate to potential liabilities for defamation settlements. Given the nature of these claims, there is significant judgement and estimation required in determining the appropriate provision.
“The directors have obtained counsel’s opinion and extensive legal advice in connection with the significant proceedings and believe that the provision held is appropriate albeit they continue to dispute the claims.”
There is no sign in the accounts of any recoveries from insurers. Perhaps Macquarie has become uninsurable.
The directors’ report lists two material financial risks facing the company and how the group manages the risk.
The first is obvious for a commercial broadcaster – a significant decline in ratings – which is managed by “employing well-known and professional presenters in addition to the development of succession plans that capture and retain our target audience”.
The second risk is “non-compliance with media regulation”.
“This risk is addressed by conducting regular training and the provision of pre-publication advice,” say the directors.
Sounds like Macquarie needs regular training in defamation law and, most of all, fact checking.