Too much talk: Telstra may not renew deal

Too much talk: Telstra may not renew deal, by Wendy Frew and
Cosima Marriner - 4th May 2004
(Credit: The Sydney Morning Herald)

xTelstra yesterday defended its $1.2 million sponsorship arrangement with 2GB's Alan Jones program, saying it was a commercially sound investment that did not impinge on the station's editorial comment about Telstra or its competitors.

However, the Herald has been told Telstra is unlikely to renew the agreement, which expires in June 2005, because of the negative publicity the deal has attracted.

There have also been renewed calls for further investigation of whether Telstra had hoped to influence public debate about its service levels in a manner not obvious to the listener.

Responding to questions from the ABC's Media Watch program, Telstra's group managing director of regulatory, corporate and human relations, Bill Scales, said yesterday the popularity and reach of talkback radio programs meant they were a cost-effective way for the company to advertise its products and services.

"The Telstra arrangements are transparent and we do not exercise any editorial control over what either Mr [John] Laws or Mr Jones say about Telstra, or about Telstra's competitors," he said.

Last month the Australian Broadcasting Authority cleared Jones and 2GB's owner, Macquarie Radio, of allegations Jones had not properly disclosed the agreement when mentioning Telstra on air. However, the authority noted that Jones's attitude to Telstra had shifted from being critical to positive after the deal was signed. The ABA also proposed tighter rules to ensure big advertisers did not influence how current affairs issues were dealt with on radio.

Media Watch last month revealed an initial draft of that report that differed dramatically from the final report and contained three preliminary findings that Jones's broadcast had breached broadcasting codes.

A draft marketing plan, also revealed on Media Watch last month, talked about building "on Jones's credibility and the trust that he has developed with his audience" and using the Jones deal to "counteract any negative perceptions about Telstra".

Corporate ethics consultant Kerrie Henderson, of Henderson Walton, said it was one thing to pay for a "live read" promoting a product but quite another to seek to influence issues, such as Telstra's service. "I'm not convinced [that is what they are doing], but that is what it appears to be and that is what should be explored . . . If they are, then you have to ask: what does this say about the ethics of this corporation?" said Ms Henderson, a former member of the ABA.

The Prime Minister, John Howard, is still seeking advice from his department about correspondence between the ABA chairman, David Flint, and Jones.

Last week Media Watch revealed that Professor Flint had written to Jones before the cash-for-comment scandal in 1999 praising the broadcaster's on-air performance.

Under the Broadcasting Services Act, the ABA chairman can be sacked only if he misbehaves, is physically or mentally incapacitated or is bankrupted. Unless Professor Flint resigns voluntarily, or is persuaded to quit by Mr Howard, he is likely to remain chairman until his term expires in October. Professor Flint did not return the Herald's calls.

The Communications Law Centre has written to the Communications Minister, Daryl Williams, asking him to use his ministerial powers to force the ABA to investigate the legal loophole that enables Jones to indirectly benefit from Telstra's program sponsorship.


Media websites

The Sydney Morning Herald

ABC Media Watch



Australian Broadcasting Authority

Macquarie Radio Network

Communications Law Centre


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