The Herald’s View:Peter Costello had to go. And thank goodness he has
Peter Costello had to go. And thank goodness he has

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The Sydney Morning Herald

The Sydney Morning Herald

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Editorial

Peter Costello had to go. And thank goodness he has

Everyone with half a grip on reality knew Peter Costello’s tenure as Nine Entertainment chair was over the moment footage emerged of the former federal treasurer dropping his shoulder and barging into a reporter at Canberra Airport last Thursday. Everyone,that is,except for Costello himself.

Costello spent much of that night downplaying his encounter with Liam Mendes,a reporter from The Australian who dared ask questions about a workplace culture scandal at Nine. Costello could barely keep a straight face as he explained away the incident as nothing more than an over-enthusiastic reporter tripping over an “advertising placard” in the airport arrivals hall. The footage very much suggested otherwise.

The encounter followed a fortnight of intense pressure over whether Nine had done enough to deal with the“open secret” of how Nine’s former television news and current affairs director Darren Wick behaved towards female colleagues. Costello might have avoided the exchange with Mendes altogether had he responded to the many written questions theHerald and other media outlets have asked him this month.

Quizzed after the airport incident about whether his eight-year reign as chair of Nine,which has owned theHerald since a merger in late 2018,could be at risk,Costello replied:“Rubbish”.

What was rubbish was Costello’s belief that he could hold on to his job. It was simply untenable for the chair of a media company that employs hundreds of journalists to seemingly shove a reporter to the ground,laugh,walk off and carry on in the boardroom as if nothing happened. He clung on to the top job until Sunday afternoon,when an announcement about his resignation as chair and from the board was made to the Australian Securities Exchange.

Costello will not be mourned by the majority of those who work at Nine. Indeed,theHerald believes his tenure is a case study in why ex-politicians often do not make good company directors. As one example,Costello’s public criticism of Labor Treasurer Jim Chalmers sat awkwardly with the need for a chair of a major media organisation to have a constructive relationship with such an important external stakeholder.

Costello was not a particularly strong champion of journalists – so much so that his Sunday afternoon resignation statement concluded with a complaint about them:“I will not be doing any interviews or commenting further on any issues this weekend,so no need to maintain vigil outside my home.”

His presence on the Nine board was also a source of concern for loyal subscribers suspicious of the influence a former Liberal treasurer would have over the company’s mastheads,and source of frustration for editorial staff who had to frequently reassure readers and stakeholders that our independence remained a guiding principle of how we operate.

A recent damning report by theHerald’s chief investigative reporter Kate McClymont,which examined how Wick allegedly treated women,is proof our independence remained unaffected by Costello or other board members and executives. And while News Corp has done some solid reporting on the Wick affair,it’s impossible to imagine Rupert Murdoch’s company covering its own cultural problems in such a forthright and honest manner.

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That criticism of News Corp aside,theHerald is concerned that the union representing journalists,the Media,Entertainment and Arts Alliance,offered a half-hearted condemnation of the Canberra Airport incident because it involved a journalist fromThe Australian.

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Over recent months,the MEAA has published press releases on its website criticising the ABC’s sacking of Antoinette Lattouf,the ongoing detention of Julian Assange and the jailing of whistleblower David McBride,but failed to do the same when a working journalist ended up sprawled on the ground after an encounter with the head of a major media organisation.

The best the MEAA could come up with was a tweet 24 hours after the incident which said Costello “should know that a journalist asking him questions is just doing their job,and like any other worker in this country deserves to be treated with respect and to be safe”. It was a limp response which failed to meet the gravity of the moment. Had the journalist forced to the tiles of the Canberra Airport arrivals hall been from the ABC,the union’s response would have been very,very different.

But back to Costello. It must be acknowledged that the 66-year-old presided over some important milestones at Nine – particularly the creation and development of streaming giant Stan and the board’s willingness to fund theHerald’s defence in a defamation case waged by war criminal Ben Roberts-Smith.As senior business columnist Stephen Bartholomeusz points out,Nine was actually in the hands of distressed debt funds when Costello joined the board 11 years ago.

“Nine has fared better than most,” Bartholomeusz observes. “It is the number one TV network. Its broadcast video-on-demand service is also the leader in its category. The Fairfax mastheads –The Sydney Morning Herald,The Age and theFinancial Review – are profitable and have built significant digital subscription bases. More than 60 per cent of the publishing division’s revenue flows from its digital offerings.

“It has,however,been a difficult time for all traditional media. The big social media platforms and technology companies continue to gut traditional media of its advertising revenues and fragment their audiences. Free-to-air networks are battling the giant streaming services for audiences and revenues. The current economic environment isn’t helping.”

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A declining share price over the course of this calendar year has also been a concern for investors,executives and staff. Nine is not entering this period of instability for commercial broadcasters on its own;Seven West Media is down 35 per cent so far this year,and the Ten Network is operating at a near-permanent risk of collapse. International players face the same challenges.

Nine’s new chair,Catherine West,has a huge job ahead on multiple fronts. A former Sky UK executive and current chair of the National Institute of Dramatic Art,West has been on the board since 2016 and served as deputy chair since last September.

She and other board members will remain under pressure to explain whether they did enough to deal with Wick and the company’s broader treatment of women. In addition to quelling the justified concerns of shareholders,she will also have to regain the trust of staff,particularly women. An independent review into Wick and broader cultural issues at the network will be a crucial test for how determined the Nine board is to tackle the problem.

We also trust the revised board will continue to observe the Charter of Editorial Independence under which theHerald and its sister publicationsThe Age andThe Australian Financial Review operate.

West takes over at a time when corporate Australia is under unprecedented scrutiny from their customers and the broader public – as Costello now knows all too well. Business as usual on culture and governance no longer cuts it. Transparency and action are the order of the day. Nine’s many journalists demand that of others. It’s only right for Nine to hold itself to the same standard.

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