Regulator declines to call on top Seven execs in Australian Open rights case

The Australian Securities and Investments Commission has reportedly declined to ask senior executives from commercial broadcaster Seven to give evidence against two former Tennis Australia directors in a court case concerning the awarding of rights to the Australian Open tennis tournament in 2013.

Australian newspaper The Age said ASIC will not call on the testimony of Tim Worner, who retired as Seven chief executive on Friday, and Bruce McWilliam, the broadcaster’s commercial director, despite subjecting them to compulsory interviews as part of its investigation.

The case concerns the actions of former Tennis Australia directors Harold Mitchell and Steve Healy. ASIC in November issued civil penalty proceedings in the Federal Court of Australia against the duo in relation to their role in the 2013 decision that led the governing body to extend its rights deal with Seven without launching a tender process.

The Tennis Australia board made the controversial decision to extend its contract with long-time partner Seven for the Australian Open grand slam and other tournaments for a five-year period spanning 2015 to 2019.

That move has since come under scrutiny and ASIC has alleged that both Mitchell and Healy withheld material information from the Tennis Australia board when it made its decision to award the domestic broadcast rights.

The duo are also said to have failed to ensure that the board was fully informed about the value of the rights, the interest of parties other than Seven, reportedly fellow commercial broadcaster Ten and the IMG Media agency, in acquiring those rights and the best method of marketing them.

Mitchell and Healy are alleged to have failed to advise the board that Tennis Australia was likely to obtain better terms by putting the rights out to competitive tender, as well as failing to ensure that a sub-committee, that had been appointed by the board to advise it about the granting of the rights, carried out its functions.

Healy served as president of Tennis Australia from October 2010 to April 2017, when he also resigned as a director of the organisation. Mitchell retired from the Tennis Australia board on October 29. He served as the body’s vice-president from December 2015 until his retirement.

Both men have strongly denied any wrongdoing and The Age said legal letters between lawyers for Mitchell and ASIC do not explain why the regulator has decided against calling Worner and McWilliam as witnesses.

The Age and the Herald last week reported that ASIC had struck an immunity agreement with former Tennis Australia chief executive Steve Wood as part of its action against Mitchell and Healy.

In June 2018, Nine reached an agreement to commence its coverage of the Australian Open a year early, with the deal coming a week after it said it had exited talks with the rights-holder, Seven. Nine’s deal with Seven and Tennis Australia meant its contract started in January 2019 and runs for six years, until the end of 2024.

Nine initially took the domestic rights to the Australian Open from Seven in a five-year deal signed in March 2018.