How Plot To Get Alan Jones Backfired

On Sunday morning Macquarie Media, owners of Sydney’s popular and powerful radio station 2GB, announced former night time presenter Steve Price would be hosting a new show on weekdays from midday to 3pm.

“The program is designed for listeners who want more — more news, more interviews, more opinion, more entertainment and more of the unpredictability, fun and passion that comes from a show where the open line for callers is always front and centre,” the statement by Macquarie CEO Adam Lang read. What 2GB and Macquarie didn’t want more of was drama, but after a horror week it seems inevitable.

Price was put in the slot by management at the expense of long-serving host Chris Smith. The decision sparked long-running internal feuds that many within the radio station believe have brought 2GB and owner Macquarie Media to a point that could result either in the clean-out of management or the departure of more hosts.

The Australian has spoken to present and past employees for this story about the increasing tensions at the station. Last Friday, Lang sent a note around to staff warning about leaking to media and threatening News Corp (publisher of The Australian) with legal action over a series of stories in this week’s Daily Telegraph. Lang claimed the reported allegations against him were unverified, inaccurate and farcical. The Australian is not suggesting those allegations are true.

To understand last week’s attempt to have Smith move from his midday timeslot after more than 15 years, after his contract was terminated and paid out, you need to rewind to November last year. At that time the Macquarie Media board made a decision to do the previously unthinkable: dump star presenter and winner of 15 years’ worth of radio surveys for the station, Alan Jones.

While Jones couldn’t (and still can’t) be beaten in the ratings, his record in defamation actions is less stellar. In September Jones had just lost a defamation case to the Wagner family after the court found he had defamed them over the damage and lives lost in the 2011 Grantham floods, and ordered him to pay a record $3.75 million.

In October there was another blow to Jones, who was forced to apologise for comments made to the Sydney Opera House boss Louise Herron after he called for her to be sacked during an interview on air after a dispute about a racing billboard on the Opera House sail. In November last year its understood Lang came to Jones with a bullying claim and numerous legal letters over what was broadly described as a curt but reasonable demand by Jones to a newsreader that he be credited with an exclusive after he broke the news that Mark Latham was about to switch to One Nation.

A push began to remove the ageing, $4-million-a-year Jones from his prime position as breakfast host and replace him with Ray Hadley.

While many view the decision as madness, others will defend Lang’s decision as being made by someone who was looking out for the good of the company.

Jones’ defamation actions were too costly and the insurance premiums were such that Jones couldn’t be covered under the station’s policy.

Others asked why Hadley was not a liability, given the well-documented bullying problems, including a court case.

Nonetheless, there had been a view the ratings had held up when Hadley replaced Jones on breakfast for a period and it could allow 2GB to transition to a life beyond Jones.

This defamation loss is also understood to have turned 2GB’s 30 per cent shareholder John Singleton against Jones, to the point he was badmouthing his star presenter publicly.

According to senior sources at the station, there had been concerns in Macquarie management about the direction of the station and its failure to attract younger, less conservative, viewers.

How this marries with putting an arch-conservative like Hadley in the top spot is not apparent, but it was clear the move against Jones was on.

Fightback and Nine takeover

You don’t become Alan Jones by getting outmanoeuvred at work, and he had more than a few big allies to fall back on.

One was Russell Tate, Macquarie Media chair and former executive chair, who took over Jones’ contract negotiations and went back on an earlier view that Jones should go.

Another major factor that worked in Jones’ favour was the Nine takeover of Fairfax in December 2019. Nine took a 54.5 per cent stake in Macquarie with an eye to buying the remaining shares quickly.

“I don’t want to be dragging these things out for months or years on end,” Nine CEO Hugh Marks said at the time when asked about a full buyout.

Peter Costello, a Jones ally and chairman of Nine Entertainment Co, wanted Jones to stay and made representations on Jones’ behalf to Macquarie management. Hugh Marks had another problem in the form of poor ratings for his once all-conquering Today show following the departure of star host Karl Stefanovic.

Did Nine really want to risk two ratings disasters on their two most valuable morning programs after benching their two biggest TV and radio stars?

As it became increasingly clear it would be too hard to shift Jones, odd ideas started to be floated by programming managers.

One was that Jones would do roving editorials throughout the day and host a podcast. Jones is understood to have found the suggestion insulting and ludicrous.

In May, as the June deadline approached, the coalition of Marks, Tate and Costello became too much for Lang to deal with and there was a directive to get the Jones deal done.

Tate oversaw the final negotiations and by the end of the month The Australian reported Jones would be on another $4 million a year deal for two more years.

Budget problems

In early May, as it became clear Jones would be re-signed, Macquarie Media released a trading update to the ASX advising that 2019 earnings guidance had fallen from $29-$32 million to $27-$29m due to “trading conditions”.

Trading conditions aside, the loss was an eerily similar amount (from original highest estimate to the revised lowest estimate) to the $4m they found for Jones.

The problem of retaining Jones had a knock-on effect through the company in terms of budget and programming.

As compensation for not getting the breakfast slot, Ray Hadley would still need to be paid an extra $1.7m bonus to bring him up to $4m a year.

Compounding this was the scheduling disaster which now meant Steve Price was not going to get Hadley’s mornings spot from 9am to midday.

Price was then promised Chris Smith’s midday to 3pm shift as compensation for the loss of mornings, making good on a long-term promise to get off of nights.

Lang called Smith into a meeting on June 25, explaining his decision. Smith blew up and stormed out of the Macquarie building, at one point in tears, over the decision to drop him from a spot he’d been in for than 15 years, which he was still winning ratings wise.

To add insult to injury for Smith, he was on a contract worth a (mere) $300,000, peanuts compared to Jones’ and Hadley’s combined $8m a year, and said he couldn’t do nights with two small children. Those who would defend Lang’s decision point to the fact Smith wasn’t a great advertising draw card (despite winning his spot), had limited ability to go to other cities (unlike Price) and had had his own problems in the past.

Either by accident or design, Smith is now gone, costing the station another $500,000 to pay out 18 months of his contract while staff increasingly complain of cutbacks and are fearful of more.

Some claim the Macquarie Sports Radio, which most recently had an 0.8 per cent share, is also costing the station dearly. The station came on the back of the failure of “Talking Lifestyle” which lost around $6 million and closed in April 2018 after just two years.

Deals with wires service AAP have been scrapped, and there is an increasing expectation that its newsroom will be merged with the Nine operations.

And where does this leave Marks’ bid for full control of Macquarie? Those unhappy with the current regime are agitating for full control as soon as possible.

Contrary to the talk after the Nine/Fairfax takeover, Hugh Marks seems less keen on an immediate takeover of the station, telling the Nine-owned Sydney Morning Herald in June a takeover would “depend on what the business looks like, its profitability, its viability and what a deal might look like”.

Right now it doesn’t “look” very good at all.