Two former Tennis Australia board members face civil penalty proceedings following an Australian Securities and Investments Commission investigation into the awarding of the domestic TV broadcast rights for the Australian Open.
Harold Mitchell and Stephen Healy were both on the board of Tennis Australia in 2013 when the rights to broadcast the tournament were given to long-term media partner Channel 7 for five years.
ASIC alleges that Mr. Mitchell and Mr Healy:
- withheld material information from the Tennis Australia board when it made its decision to award the domestic broadcast rights;
- failed to ensure the board was fully informed about the value of the rights, the interest of parties other than the Seven Network in acquiring the rights and the best way to market them;
- failed to advise the board that Tennis Australia was likely to obtain better terms by putting the rights out to competitive tender;
- failed to ensure that a sub-committee, appointed by the board to advise it about the granting of the rights, carried out its functions.
Further, in Mr Mitchell’s case, the regulator claims that he:
- passed on to the Seven Network confidential information about the interest of its competitors in acquiring the rights;
- 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;
- downplayed to the Tennis Australia board the interests of parties other than the Seven Network in acquiring the rights;
- failed to inform the board of the concerns the Seven Network had about Network Ten’s interest in acquiring the rights; and
- encouraged the Tennis Australia board to conclude an agreement with the Seven Network instead of putting the rights out to competitive tender.
ASIC is seeking a fine for the two men, and that they be disqualified from managing corporations.
The penalties for both men could be severe. Under the law, the maximum fine per contravention is $200,000.
Under the Corporations Act, the Federal Court has the power to disqualify a person from managing a corporation for any length of period it considers appropriate.
There is no ongoing investigation in relation to Channel 7’s role in awarding broadcast rights for the Australian Open.
On Monday, Mr Mitchell told The New Daily : “I’ve always acted in the best interests of Tennis Australia, and the matter is with my lawyers.”
Tennis Australia refused to comment in detail.
“This matter does not relate to our current operations,” it said in a statement. “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.”
Mr Mitchell is one of Australian media’s big hitters. He is the chairman of Aegis Media Media Pacific and has sat on the board of many of Australia’s most prestigious arts organisations, including Opera Australia, the Melbourne Symphony Orchestra and the Melbourne International Arts Festival.
Mr Healy was president of the Tennis Australia board from 2010 until he stepped down in April 2017. He is chairman of partners at global law firm Dentons.
The matter is set down for a hearing in the Federal Court in Melbourne on November 30.
Mr Healy was contacted for comment.