Billionaires court media favours

by Michael West | Mar 5, 2012 | Business

Rupert Murdoch has never sued. He has never even complained about an article in the press.

It is true that Murdoch has a global media empire to defend his honour, and his interests. In this country alone he controls 70 per cent of the newspaper market and dominates pay TV.

Nonetheless, in his absence of legal assaults on the media and complaints, the press baron is peculiar. He stands apart from Australia’s other billionaires. When it comes to threatening and suing for defamation, Murdoch is the exception to the rule.

Treasurer Wayne Swan is right: billionaires do use their mammoth holdings to sway outcomes.

Wayne Swan is right. Billionaires – and not just billionaires but big companies too – deploy their wealth to swing political outcomes in their favour. That much is obvious.

The Minerals Council spent a mere $7 million or so in an advertising campaign against the government and its mooted mining tax and managed to depose an elected prime minister, Kevin Rudd, in the process.

Billionaires and billion-dollar companies don’t just have the wherewithal to buy the best-connected lobbyists in Canberra, or phalanxes of PR people to coax the media, they also have the muscle to shut down negative comment.

They can buy the good comment and they can stifle the negative stuff. And this holds them apart from ordinary Australians. The defamation laws suit the rich and famous. Describe the man in the street as a “boofhead”, no problem. Describe a billionaire as a boofhead? You are unlikely to see that story in the press.

Legal irony

The irony is clear: you can sue for defamation, and win money in a court judgment or a settlement, if you are already rich and famous. If you are poor and unknown, you might dearly love to be defamed and paid a large settlement, but you could never afford to sue the media outlet in the first place.

The mere spectre of a defamation writ conditions journalists and editors to go easy on billionaires. This is not to say of course, as Swan has pointed out, that billionaires should not be afforded the same rights to free speech as everyone else. They are. In spades.

Their comments are sought out by the press. They themselves are news. What they say is often news. But they – and their political and corporate agendas – get a rails run in the media. Look no further than James Packer’s latest Sydney casino campaign and the dearth of debate on the social ills of gambling.

Defamation row

Here’s a rough tally on billionaire defamation:

Iron ore magnate Andrew Forrest has a live writ against The Sydney Morning Herald relating to a story about his company Fortescue’s controversial Chinese contracts.

Forrest’s lawyers have stayed proceedings pending an outcome in the Australian Securities & Investments Commission’s action for misleading statements. That is now before the High Court.

The effect of Forrest’s suit is to make editors more cautious in any commentary about the billionaire.

The outspoken Clive Palmer has not sued the media for defamation but has spent millions suing governments and other parties to support his corporate agendas.

Palmer’s nemesis du jour, Frank Lowy, has had his run-ins too. The Football Federation Australia, of which Lowy is president, recently sued The Age for imputations in a story about Australia’s soccer peak body and its bid to host the World Cup.

Lowy is not a prolific suer yet his very power and wealth have media organisations constantly on edge as to what he might do. This is another aspect to the billionaire armoury.

It’s not just about influencing the press via lawsuits and the threat thereof, it is also about financial muscle and connections.

As with fellow billionaire Gerry Harvey, Lowy commands huge advertising dollars. The very scintilla of a suggestion that some of this advertising spend might be withheld, or might go elsewhere, is enough for editors to at least exercise caution.

And by caution, we mean particular care which would never be afforded to a commoner.

This goes not just for billionaires but for corporations, and especially large retailers who spend up big on advertising.

For his part, Harvey has pulled millions in advertising spending from one media organisation, citing negative coverage in its business pages as the reason. The stories were about Harvey’s whinging about the “unfair playing field” in retail, which encouraged consumers to shop online.

There is no suggestion that Frank Lowy has used his power in this way but he has enjoyed, at least in the case of the Fairfax organisation, the potential influence of his associates such as David Gonski and Dean Wills on the board of the Fairfax company.

Tenacity

Then there is Australia’s richest person, Gina Rinehart, who is an avid user of lawyers. Rinehart, who recently became the largest shareholder in Fairfax and has also built a substantial stake in Ten Network, has not sued for defamation.

The threat of constant correspondence from her lawyers, however, has put publishers and editors on notice.

“Unbelievable” is how one newspaper lawyer describes the tenacity of the correspondence.

Her lawyers have taken constant issue with the way press stories are written. For instance, they took issue with a recent report about the fight with her children, not because the facts of the court report were wrong – they simply detailed what had transpired in court – but because they wished to correct what had actually been said in court.

The effect of detailed and incessant legal henpecking is to deter coverage altogether as it is time-consuming and costly for media – particularly now that the mainstream media is suffering a life-threatening assault on its business model at the hands of the internet – to constantly defend.

PR budgets

Five years ago, reforms to the defamation laws stopped big companies from suing for defamation. After all, big companies had big PR budgets at their disposal to tell their side of the story.

Thankfully the incidence of corporate defamation suits has since dried up. But the laws don’t prevent companies funding actions by officers or directors.

James Packer is another billionaire to sue for defamation. He sued Fairfax over its coverage of OneTel a few years ago. Lawyers at Fairfax, News Ltd and the ABC are continually mindful of the potential threat from Packer family interests as the late Kerry Packer was a prolific suer who once sued Fairfax four times in a fortnight.

In each of those actions he joined the then chief executive Fred Hilmer as a co-defendant.

Straw man

The threat of defamation has tempered press coverage of billionaires for decades. Alan Bond once sued The Age for a business section opinion piece about Bond Corp being a house a straw. It was. And small shareholders lost money when it collapsed.

Whether true or not, press allegations about powerful corporate interests are often tempered and sometimes eliminated by the spectre of a possible defamation action.

This is merely another aspect of their power, which puts billionaires on another footing altogether compared with other Australians.

Virtually none of the actions mentioned here, nor the press apologies, settlements and so forth, which variously accompanied them, could have happened in the US or most other jurisdictions.

Draconian

This country has the most draconian defamation laws in the world. They constrain commentary, not just about billionaires but about the not-quite-so-rich who can afford to pay for defamation lawyers too.

It can reasonably be argued then that billionaires don’t merely enjoy the muscle to promote their interests and their agendas; they are also prone, as a class but not universally, to restraining free speech in the media.

Meanwhile, while billionaires in Australia enjoy the world’s best jurisdiction for defamation, the government is proposing a range of potential regulations for media, which may include an ombudsman.

At the risk of attracting a class action from billionaires claiming we have impugned them for being litigious, the rich do have a right under the law to prevent their reputations from being damaged. It’s the laws, not the billionaires, who need to change.

Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.

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