Costello goes, but the cultural problems at Nine Entertainment remain

Peter Costello has long had an uneasy relationship with journalistic truth-telling.

In 2005 he dined with three journalists from the Canberra press gallery, during which he told them the Coalition government led by John Howard, and of which he was treasurer, could not win the election due in 2007 with Howard as leader.

Next morning, a member of his staff induced the three journalists to treat the conversation as off the record – that is, in confidence.

In what was to become known in the press gallery as “Costellogate”, a few months before the 2007 election, one of the journalists wrote that Costello had said he did not believe the Coalition could win under Howard. The subtext was that it could win under him.

Asked about this at a press conference, Costello said he didn’t know where journalists got this kind of information from, and that they made it up half the time.

Outraged by this slur on their colleague, the other two journalists then corroborated the report.

The episode added to the Coalition’s instability going into that election, which it subsequently lost.

Last Thursday there was the spectacle of Costello being confronted at Canberra airport by a reporter from News Corporation, Liam Mendes, asking him pointed but pertinent questions about the sex scandal engulfing the Nine Entertainment Company, of which he was chair.

The scandal follows the departure in March of Nine’s director of news and current affairs, Darren Wick, in the aftermath of which several women staff members have come forward with allegations of sexual misconduct against him.

So, Mendes asks Costello, did he support the way Nine’s chief executive Mike Sneesby was handling the Wick saga? Had Costello been aware of the allegations against Wick? Why would he not support Sneesby publicly?

Getting no answers, he says, “You have to answer the questions, Mr Costello.”

At this point Costello’s face fills the camera viewfinder, there is a jolting motion and the reporter falls on his back, saying, “You’ve just assaulted me”. Costello looks down at him and walks off.

Although Costello denied assaulting the journalist, at that point his position as chair of Nine, a company that employs hundreds of journalists who ask questions like this every day, became untenable. Three days later he was gone.

“Culture” and “renewal” have figured heavily in the Nine Entertainment Company’s public-relations efforts over the weekend to contain the damage.

On the extensive evidence published by The Australian newspaper and by the company’s own major newspapers, The Sydney Morning Herald, The Age and the Australian Financial Review in recent weeks, the need for cultural renewal is well overdue.

The announcement of Wick’s resignation in March was replete with references to long beach walks, longer conversations and his need for a rest after 13 years in the director’s chair.

There was no mention of the fact that his abrupt departure came after a formal complaint from a staff member about his behaviour.

Then in late May, with Wick gone, women began to speak out.

The Australian, Sky News and Nine’s own mastheads began carrying extensive accounts of his alleged predations.

Kate McClymont, the Sydney Morning Herald’s chief investigative reporter, wrote:

Darren Wick, the recently departed head of Channel Nine’s news and current affairs division, has been accused of engaging in drunken, lecherous behaviour in what furious staff say was “an open secret” for more than a decade.

Three women have now alleged to this masthead that Wick, the powerful news and current affairs chief for the past 13 years, brazenly groped them in public view of their colleagues.

A few days later, Wick’s successor, Fiona Dear, confronting a staff revolt, admitted there was a culture of power games at the network, telling the staff she “knows what it’s like” to encounter inappropriate behaviour in the workplace, and promised them “the power games stop today”.

Nine Entertainment subsequently admitted in a letter to staff that it realised they had experienced “trauma” following allegations of “misuse of power and inappropriate behaviour” among leadership in its newsrooms. “We recognise we need to do more.” The letter was co-signed by Costello, the chief people officer Vanessa Morley and Sneesby.

So it should have come as no surprise to someone as experienced in public life as Costello that he should be confronted by a journalist in a public space and asked difficult questions about these matters.

Yet instead of a dignified “no comment” there is an encounter that ends with the reporter flat on his back and Costello saying he fell over an advertising placard. The Nine board met the next day and by Sunday Costello was gone.

The circumstances of his departure, and that of Wick, indicate a culture of arrogance and entitlement at the top of Nine, and invites a question about whether such a culture can be changed while the chief executive, Sneesby, remains.

Reputational considerations affect share prices, and Nine Entertainment’s share price has fallen to $1.40, down 30% this calendar year. It fell 2% on Friday alone.

Former Nine Network chief executive Jeff Browne, who at one time was a candidate for the Nine board, was reported on the weekend as saying, “Not only has the business failed to achieve a culture of mutual trust and respect, it has failed to deliver any incremental value to shareholders.”

A larger question, which is ethical rather than financial, is whether it was right to have a former politician – and a federal treasurer at that – chairing the board of a media company in the first place.

No doubt Costello’s connections to the Coalition were an attractive attribute for Nine when he was appointed to the board in 2013, and particularly when he was appointed chair eight years ago.

It is a tribute to the integrity of the company’s journalists, especially on the newspapers, that their coverage of federal politics over that time has, on the whole, been fair.

But the point of principle remains. One of the crucial functions of the media in a democracy is to hold governments to account. The public’s trust in their ability to do so without fear or favour is central to the workings of democracy.

No law prevents a politician becoming chair of a media company, yet democracies work successfully only if their institutions respect not just the law but conventions – the guardrails of democracy. One such convention is that the media should be, and be seen to be, independent of party politics. For this reason, if for no other, the departure of Costello from the chair of Nine is welcome.

It is difficult at such close range to get a perspective on his legacy. Significant events occurred on his watch, in particular the acquisition by Nine of the old Fairfax newspapers, the SMH, The Age and the Australian Financial Review. We may learn more about the inner workings of the company when the cultural review commissioned by Nine from an external consultancy, Intersection, presents its report, and any vaunted “renewal” occurs.