May 7, 2010
Dear Readers
There's nothing quite like a big court case between powerful media personalities so I've really enjoyed spending 9 hours over the last two days soaking up the damages action that sacked Herald Sun editor-in-chief Bruce Guthrie has brought against News Ltd in the Victorian Supreme Court.
Herald & Weekly Times managing director Peter Blunden spent all of Friday in the box and at the end of it Justice Stephen Kaye sent his legal team a very strong message to settle, warning that there was substantial contested facts and he would be making judgments on people's credit which could have implications well beyond the court.
Crikey's Andrew Crook and I sat together through most of the morning action which resulted in this long piece for today's edition. The key point of contention was explained as follows:
Blunden, under oath, flatly contradicted his former editor-in-chief Bruce Guthrie over a now-infamous front page that pilloried former police chief Christine Nixon for taking a junket to Los Angeles, claiming it “was a good front page” and that he “supported the story”.
It's at odds with Guthrie's version of events. Guthrie said Blunden had confronted him in his office before a lunch date to air objections to the story from Rupert Murdoch's sister, and then-News chairwoman, Janet Calvert-Jones. But Blunden denied ever uttering the phrases attributed to him by Guthrie that “Janet's not happy” and “Janet thinks we've been too hard on Christine”.
In a similar exchange two weeks later on a flight to Sydney, the News Limited hard man was equally blunt, denying all knowledge of the conversation. When asked by Will Houghton, SC, for News over whether they discussed the front page at any time on the trip, Blunden responded with a simple “nah”.
Blunden has admitted that he ran a sustained lobbying campaign with News Ltd executive chairman John Hartigan to get Guthrie sacked ever since a simultaneous blow-up in February 2008 over a Melbourne Storm trip to England and how circulation figures were reported in the paper.
However, Guthrie's counsel, Norman O'Bryan SC, produced a long list of emails during 2008 suggesting that Blunden was presenting a far more friendly and supportive picture when dealing directly with Guthrie.
He contended that Blunden at least had a moral duty to inform Blunden of his sacking campaign when he knew he was about to spend seven figures buying a house in Hawthorn.
Blunden shrugged this one off suggesting that his only concern was the direction of the newspaper and at that stage "Harto" was still backing Guthrie.
O'Bryan finished the day suggesting that these lines about other people being involved were just cover for the fact that he had run a deceitful campaign behind Guthrie's back.
And that is where the involvement of Rupert's younger sister gets messy. If Blunden has used her name inappropriately then he could be in strife with the Murdoch family. Equally, he could have been told to not have the family dragged into the court proceedings. The Herald Sun has been relentlessly slaughtering Christine Nixon over recent weeks so any apparent protection to be provided courtesy of a relationship with Janet Calvert Jones is clearly no more.
Blunden is effectively alleging the whole thing is a Guthrie concoction, but you then have to ask how Guthrie would have even known Nixon was tight with Calvert-Jones.
There is no doubt that Blunden was throwing everything into his campaign to have Guthrie sacked, but it was surprising that O'Bryan didn't ask precisely who were the mysterious other parties who also prevailed on John Hartigan to fire the final bullet. The obvious question is whether it was on Rupert's orders as well, especially given Melbourne is his home town and his father made his name building up The Herald.
Blunden admitted that his email to Guthrie on the morning after he was sacked was primarily motivated by this story byThe Age's Andrew Rule, especially the following two lines:
News Limited insiders said last night that their chief executive, John Hartigan, had privately expressed mixed feelings about the decision to replace Guthrie, but that his hand had been forced to end a difficult situation.
"You could say it's a personality issue," a News Limited executive told The Age.
Blunden tried hard to make a distinction between a personality clash and professional differences but now says he shouldn't have claimed in his email so strongly that others were involved in the sacking decision.
There were plenty of other contradictions in the evidence.
On Thursday Julian Clarke described 2007-08, Guthrie's only full financial year as editor-in-chief, as "a very lean year" because "the relationship was damaging the business". Clarke claimed 2006-07 and 2008-09 - immediately before and after the Guthrie reign - were both much better financially for the company than 2007-08.
Today's Herald Sun coverage (see tear out in Crikey long piece) really drove this point, but then Blunden completely contradicted it today when talking about a difficult week of trading in August 2008 when he was $1 million down on budget.
"It turned out to be an aberration. It was one bad week. We had just reported a record year."
If that's the case, why on earth would you sack the editor-in-chief three months later?
Both Julian Clarke and Peter Blunden made a big deal about Guthrie not getting behind a $2 million promotion for the 14-part National Geographic DVD giveaway in October 2008. This was described as "the last straw", although Blunden happily admitted that it ended up being a fantastic promotion - but only because he intervened aggressively to force Guthrie to give it much more editorial attention than was being planned.
Guthrie strongly contested this view and claimed that his deputy editor Damon Johnson, now editor of The Sunday Herald Sun, was in charge of liaising with marketing.
If I'm to make a prediction it is that the parties will heed the judge's advice and reach a confidential settlement over the weekend. News will pick up Guthrie's legals and give him a useful six figure sum to make the whole messy saga go away.
If not, we'll be back in court on Monday for the summing up with the case certain to finish some time on Tuesday.
Heaven forbid, a paying advertiser
Shock horror, we've actually got someone who might yet become a paying advertiser in The Mayne Report. Kumar Advani is the tailor who has kept me looking sharp for almost 10 years at everything from council meetings to Tuesday night's appearance on Channel Ten's national prime time program The 7pm Project.
Several times a year, Kumar & Vinesh Advani visit the capital cities of Australia and New Zealand to provide personal fittings for Ladies and Gentlemen. I love his gear so why not make an appointment to view the exclusive range during the next showing in your city.
A much smoother council meeting
Things look like they're getting back on track at Manningham after a much better council meeting on Tuesday night. The only issue which wasn't unanimously supported was a contentious proposal from Optus and Vodafone to build a mobile phone tower as part of a new light tower for Warrandyte Football Club. There was no sign of either factional or even ward-based voting on this one as it got over the line 5-3 after a strong debate.
The meeting also included the unveiling of our budget with a proposed 4.9% rate rise for 2010-11, which is slightly up from last year's lowest-in-ten-years effort of 3.7%, but still well below the average across metropolitan Melbourne.
Anyway, here are the edited highlights from the meeting:
Moving the Warrandyte tower motion and summing up
Full debate on Warrandyte tower
Proposing 57 apartment development on Doncaster Hill
Templestowe Village special rates schemes
Calling for better care of Currawong Bush Park
Introducing the March quarter performance report
Speaking in favour of the budget and modest 4.9% rate rise
Answering question on Warrandyte phone tower
Warrandyte to go pokies free
Great news on the pokies front at Manningham with the Warrandyte Hotel, in conjunction with the Warrandyte Football Club, declaring that it will be surrendering its 43 machines under the current backroom auction process.
Check out the splash in the The Manningham Leader this week, along with the comments at the bottom.
Also, check out our collection of videos covering all other pokies stories, along with Paul Bendat's Pokieact website and this package
The Cornwall collection
Former Fairfax and Crikey cartoonist Mark Cornwall has been contributing his satirical commentary to The Mayne Report since March. Here is a collection of his best cartoons and there are now also some amusing animations.
Cornwall 
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The Mayne Report costs almost $100,000 a year to run (assuming I don't get paid a salary) and we moved to a free model in June, after struggling along seeking subscriptions for the first 21 months as we racked up almost $200,000 in losses.
However, it has been nice to receive almost $4000 worth of donations over the past four months and we're hoping this new model can help cover some of the start-up losses and ongoing operating expenses.
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The Mayne Report Rich List
BRW magazine does a great job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1400 names with those who've fallen back below $10 million now italicised. Below are our latest new or updated entries:
Nic De Luca: is the founder and Managing Director of the property development specialists, De Luca Corporation. His first project was an apartment block for the Queensland Governmentand since that time, Nic has overseen the growth of De Luca Corporation into one of the State's most successful construction and development companies.
Ray Frost: the founder of Ray's Outdoors, Australia's largest outdoor entertainment and camping leisure retailer, has grown the small family run disposal store in Geelong, to manufacturing tents locally by hand and then gradually expanding to importing from overseas. In 50 years, Ray's Outdoors has grown to 38 stores in 5 states.
Government Bonds
This list tracks all bond and treasury note issues by the Rudd Government since it was elected in November 2007. There has now been more than $40 billion raised since the second stimulus package was unveiled on February 3 and we got a sense of the coming campaign on debt and deficit from Tony Abbott last week.
Indeed, Barnaby Joyce rattled off figures to Barrie Cassidy on Insiders this morning claiming federal debt has hit $115 billion and the states owe $170 billion. Throw in more than $100 billion of government guaranteed bank borrowings and total public sector liabilities are now north of $300 billion.
The latest federal bond issues are as follows and you'll note that interest rates are still north of the 4% assumed in the budget papers. Sky-rocketing public debt is a worry and here is the detail from Canberra's latest efforts:
Friday, April 30, 2010: $1.2b tender of 3 year bonds expiring in December 2013 were sold for an average yield of 5.39% and was over-subscribed 4 times.
Friday, April 23, 2010: $500m tender of 9 year bonds expiring in March 2019 were sold for an average yield of 5.77% and was over-subscribed 2.9 times. 
From the press room: Crikey, ABC radio, Lateline, The 7PM Project
Radio
774 ABC Melbourne - discussing Greece's financial crisis and Rupert Murdoch.
Crikey
Why the $47 billion media giant can handle Storm's losses
Tuesday, April 27
Lateline
April 27, 2010
The 7PM Project
Sign up for Mayne Report Tweets
We have only been twittering for a few months, but now have 1258 followers and are regularly dropping out the latest developments from AGMs, capital raising plays and even Manningham Council. Sign up below to get the latest updates from all our activity and check out some of the latest tweets:
1.30pm Apr 29: Had the pleasure of sitting next to Andrew Bolt in make-up before 7PM project appearance last night. Watch here: http://www.maynereport.com/
6.30pm Apr 28: 774 ABC discussing Greece's financial crisis http://video.maynereport.com/audio/774_280410.mp3 . Appearing on The 7PM Project tonight.
12.30am Apr 28: Warrandyte phone tower approved 5-3. Copped some flak. Good meeting. Check out Lateline appearance re Storm: http://www.maynereport.com/
4.46pm Apr 27: Heading up to council shortly. Proposed 4.9% rate rise to be debated. Biggest issue phone tower in Warrandyte. Just lobbied by local Lib MP.
3.46pm Apr 27: Just had Lateline crew at home so tune in to ABC1 tonight at 10.30pm for some snappy quotes on yarn involving media moguls and sports fiasco
2.45pm Apr 26: Judge approved Seven deal with some mentions of our issues. Also MAP board tilt confirmed. See notice of meet: http://www.maynereport.com/
12.59pm Apr 26: Truck smash on Western Ring Rd so missed flight to Sydney for Seven court action. Dam. Knocking up a Crikey story on Storm scandal instead.
5.55pm Apr 25: Complaints Christine Nixon was at 37 on top women directors list, so now 45: http://www.maynereport.com/articles/2009/12/23-0835-6640.html
6.51am Apr 25: Big slog to finally get bumper email edition out at 1.45am. Lots of juicy material. Check it out here: http://www.maynereport.com/
That's all for now.
Do ya best, Stephen Mayne
www.maynereport.com
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