Australia's Network Ten Loses Legal Bid Against Rival Seven West Media

1:06 AM PST 05/29/2014 by Pip Bulbeck
Network Ten chairman Hamish McLennan

The TV networks faced off in the New South Wales Supreme Court over Ten's poaching of programming veteran John Stephens from Seven.

SYDNEY – Australia’s third ranked commercial broadcaster, Network Ten failed in its legal attempt to stop veteran TV programmer John Stephens from continuing to work with rival the Seven Network. But the judge overseeing the case ruled that a contract  Stephens signed with Ten in April, as its new director of programming and acquisitions, is still valid -- and Ten could still try to enforce it.

NSW Supreme Court Justice James Stevenson on Wednesday dismissed Ten's application for an injunction to prevent Stephens continuing to work for Seven.

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Ten had taken Seven West Media and Stephens to court to stop him working for Seven for two years, following claims that Seven executives had induced Stephens to renege on an April deal to join Ten as director of programming and acquisitions. Ten had hired the programming guru, who has worked at all major Australian commercial networks over the course of his 40-year career, as part of its strategy to arrest a ratings and revenue decline at the network.

In the judgment, Justice Stevenson ruled that Ten’s contract with Stephens remains “on foot,” suggesting the two-year contact is binding.

But in the matter of the injunction Justice Stevenson said Ten “is not entitled to the relief it seeks. Its claim should otherwise be dismissed."

Both Seven and Ten claimed wins in the case.

A spokesman for Ten told THR that regarding any decision on whether to continue with action to enforce Stephens’ contract, "it's too soon to say," adding, "no decision has been made in that regard.” According to the contract, Stephens is due to start at Ten on June 9.

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However, Stephens said in a statement that he is “relieved that I can now concentrate more fully on my consultancy role with Seven.”

In his ruling, Justice Stevenson said communications between Seven executives and Stephens, as well as a new offer to stay with Seven, in the days after he signed with Ten were "a contributing cause" or a "significant factor" in his decision.

"In my opinion, Mr. Stephens would not have acted as he did, absent Seven's conduct," he said.

Justice Stevenson said that whether Ten’s contract with Stephens' is enforceable would be best considered "if and when Ten seeks to take further action under it."

Ten announced in March that it had signed Stephens to a contract as director of programming, but just days later Stephens said he preferred to stay at Seven, blaming painkilling medication after a hip operation for impaired judgment in signing the Ten deal.

In an extraordinary few days of testimony from both sides earlier this month, the Supreme Court  heard that Ten chairman Hamish McLennan was willing to pay Stephens hundreds of thousands of dollars not to work at Seven, even if he couldn’t work at Ten, and that Seven COO Nick Chan suggested that Stephens join the Nine Network’s nascent video streaming StreamCo to stop him working at Ten.

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Seven today said it welcomes the finding that Stephens “did not breach an agreement, and accordingly that Seven did not -- as Ten claimed -- induce Stephens to breach an agreement.”

“We are pleased that this annoying attempt at distraction by Ten is concluded. We are pleased that Mr. Stephens is able to continue to work for Seven and not take up the generous offer from Ten to be paid for two years to do nothing. This offer undoubtedly would have set a new precedent for our industry,” Seven’s statement said.

In his first public comments on the case Stephens said: "The past few weeks have been a chapter in my life I could have certainly lived without and perhaps both Ten and Seven feel the same way. It is disappointing the situation had to progress all the way to the Supreme Court, but I guess that is part of the competitive nature of our business. Regardless, I am relieved the legal stoush is now done and dusted and I can now concentrate more fully on my consultancy role with Seven. I have been a part of a great team and its success over the past decade and I am looking forward to continuing to be a part of this team."

While Ten lost the case today, McLennan said the company was vindicated by Justice Stevenson’s ruling.

“The ruling that Mr Stephens’ contract with Ten remains on foot vindicates our position. The court has found that our contract is valid and binding. We stated from the outset that our aim was to get to the truth of what happened after Mr Stephens signed a contract with our company,” he said.

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