Harold Mitchell has been hit with a $90,000 fine for committing “serious” breaches of director’s duties while on the board of Tennis Australia.
- ASIC was looking to have former Tennis Australia directors Harold Mitchell and Stephen Healy banned from managing companies
- The Federal Court saw emails from Seven’s commercial director, including one that read, “Harold swears we are safe”
- Mr Mitchell is facing millions of dollars in legal costs
The Federal Court penalised the media-buying mogul for his conduct during negotiations in 2012 and 2013 for the Australian Open’s television broadcast rights.
Mr Mitchell acted inappropriately by feeding secret information about Tennis Australia to the Seven Network, which helped it win the rights over other bidders, Justice Jonathan Beach ruled.
The broadcast rights were awarded to Seven for five years in 2013, but there was never a competitive tender process.
Channel Nine finally won the rights to broadcast the Australian Open from 2020 in a new five-year, $300 million deal sealed with Tennis Australia in 2018, ending a 35-year partnership with Channel Seven.
The controversial lawsuit was brought by the Australian Securities Investments Commission (ASIC), which was partially successful.
ASIC also sued Tennis Australia president Stephen Healy but, earlier this year, the court dismissed the case against him in its entirety.
“I am satisfied that each of Mr Mitchell’s contraventions were serious,” Justice Beach wrote in his judgment.
“His conduct had the tendency to undermine the authority of [Tennis Australia chief executive Steve] Wood.
“His conduct in forwarding internal Tennis Australia communications to Seven was quite unusual and unacceptable.
“And his conduct generally was undisciplined and fell well short of what was expected of a director in his position given the centrality and significance to Tennis Australia of the negotiations with Seven.”
The Court decided not to ban Mr Mitchell from managing corporations, nor did it impose the maximum penalty of $600,000 for three breaches of director’s duties.
However, Mr Mitchell is up for millions of dollars in legal fees, as both sides were ordered to bear their costs.
For a long period, Mr Mitchell was the nation’s most powerful media buyer, running the company that books advertisements into TV, print, radio and online schedules.
The AFR Rich List estimated his wealth at $370 million in 2018, and the noted arts philanthropist was a confidant of Australia’s top media moguls, including the late Kerry Packer, his son James Packer, the Murdoch family and Kerry Stokes, as well as top politicians.