The Kerry Stokes controlled Seven West Media would have to be near bankrupt and I believe they are trading while insolvent, and Seven and their advisors Grant Samuel are refusing to deny it, which is a criminal offence for the CEO and directors. They also want taxpayers to bail them out of the hole that chairman Kerry Stokes dug for them and are now having a second attempt for further taxpayer support.
It is well-known they have huge bank debts of at least $541 million, with total debt estimates as high as $859 million, but the company is only valued at $125 million and their revenue has dropped by at least 50% during the Coronavirus crisis.
Seven have not disclosed exactly how much their revenue has dropped but it is at least 50% because that is one of the requirements, for companies with revenue above $1 billion, for their application for the government assistance via the JobKeeper program.
Looking at the drop in revenue and massive debt Seven seem to be in the same position as Virgin Australia who went into voluntary administration this week. I Tweeted the below on Tuesday 21/4/20:
Two days later, on the 23/4/20, I emailed Seven West Media’s lawyers, chairman Kerry Stokes and CEO James Warburton the below email. I also sent the email to Seven’s advisors Grant Samuel.
They failed to respond and deny they are trading while insolvent, failed to disclose to the market exactly how much their revenue has dropped and failed to be transparent with shareholders and staff.
One of the issues that have likely stopped Kerry Stokes walking away so far is that is he knows the new owners and public will see how badly he has run the company. When Virgin Australia went into voluntary administration on Tuesday it was reported they had “close to $5 billion in debts“. New figures that have now been filed in court by the administrators show that “Virgin Australia owes thousands of creditors nearly $7 billion.” I suspect if administrators were appointed to Seven they would also have a similar blow out revealing the true debt and Kerry Stokes’ gross mismanagement.
On Friday 24/4/20 it was leaked to the SMH that Seven West Media have applied for the JobKeeper program and from the leak we could work out that Seven had dropped revenue by at least 50%. Is that how Seven now complies with its continuous disclosure obligations? By leaking to the opposition.
The failure of Seven to disclose publicly how much their revenue has dropped is almost certainly a breach of ASX continuous disclosure obligations which requires that any matter that can have a material effect on the share price be made public. Breaching continuous disclosure obligations is punishable by up to 2 years jail.
Government aid for Kerry Stokes and Seven West Media
The federal government has already forked out $50 million of taxpayer’s money for failing Australian media:
“The Morrison government has suspended a raft of local content obligations and tipped an extra $54m into Australia’s television, radio and regional publishers in an attempt to shore up news outlets struggling with the economic impacts of Covid-19.”
The federal government will also provide a 12-month waiver of spectrum tax for commercial television and radio broadcasters, at a cost of $41m, and invest $50m in regional journalism, of which $13.4m is new money. (Click here to read more)
Seven West Media will get their fair share of the government grants as per above as Seven also own regional papers. Seven would have been part of the lobby group who pushed the government for the financial aid and now they are also sticking their hand out for government assistance via the JobKeeper program.
So, what’s the difference between the ABC and Seven West Media? Not much as they are both now government funded.
Government orders the ACCC to design profit-sharing rules for Google, Facebook and Australian media – Draft rules to be released by July 2020
This week the government ordered the ACCC to develop a mandatory code to govern bargaining between Australian news media businesses and each of Facebook and Google. The bottom line is the federal government will be forcing Google and Facebook to start paying Australian media companies because links to their articles show up in search results on Google and links to the articles are shared on Facebook.
Seven West Media have been part of the group lobbying government for this and will be hoping that it helps save the company. But I doubt it will for numerous reasons.
Firstly, Seven are in so much trouble they only have a matter of weeks if not days before they fold so they can’t wait until July at the earliest to start getting paid by Google and Facebook.
Secondly, the amount Seven West Media receive from Facebook and Google is highly unlikely to be enough to solve Seven’s financial problems.
Thirdly, one of the biggest issues facing Seven West Media is that they serve up garbage to viewers and the viewers aren’t buying anymore because they have so many more options and any deal with Google and Facebook won’t solve that.
As a side note, I wrote to the ACCC on Monday and asked them “Will the ACCC’s mandatory code of conduct also cover Google and Facebook paying small independent journalists and bloggers and if not, why not?”
They didn’t answer my question but did respond saying that they will be in contact soon to arrange a meeting so I can be part of the consultation process. I’ll be arguing the case that independent journalists and bloggers should also be paid not just old media companies like News Corp, Seven West Media and Nine Entertainment etc.
One thing is for certain and that is there will be a lot of media coverage of the issue as it will affect all media. If it turns out it is just government looking after old media again, which the old media will be pushing for, then social media will explode attacking the government and the old media and it will be a relentless attack day in, day out.
Reading the above you can see how the government helps support the likes of Kerry Stokes and why Stokes directs his media to support the government. Stokes gets his share of the $50 million government hand-out, he’s applied for millions via the JobKeeker program and he has the Government and ACCC doing his bidding for him to negotiate with Facebook and Google.
Obviously other media companies benefit from some of the government assistance as well but compare Seven to Nine Entertainment which is run professionally and doesn’t have the huge self-inflicted debt problems that Seven has. Nine hasn’t applied for JobKeeper assistance and they already have a deal with Google, via their papers, worth a rumoured $20 million a year so they aren’t as reliant on the taxpayer as Seven is.
Kerry’s gross incompetence as manager of Seven West Media
Kerry Stokes and Seven West Media are on their last legs like a drunken bum outside the local pub but the knockout punch won’t come from me, unfortunately, it will come from them falling over on their faces.
Kerry’s above the law
Kerry Stokes is someone who has always believed he is above the law and only this week it was revealed that two weeks ago Kerry and his wife were “exempted from strict quarantine rules after arriving in Perth from Aspen by private jet” and were allowed to self-isolate at home. And when that was finished they jumped on the private jet to head to Canberra for Anzac Day and then off to Sydney. One rule for the rich and one for everyone else.
Kerry Stokes abandoned children
It should be no surprise that Kerry Stokes deserted his first two children long ago, treats them like dirt and rarely acknowledges them. This is important to understand who and what Kerry Stokes is and why he has never been a fit and proper person to run a media company and how he has badly mismanaged Seven West Media to the point it is on the edge of bankruptcy.
I’ve done 2 interviews with Kerry Stokes abandoned son Russell and the titles of the articles say it all. The links are below
Kerry Stokes approaches his staff and the Australian public the same way he approaches his first two children. He doesn’t care, it’s all about him.
And Stokes has run Seven West Media the same way, it is all about the power being a media baron gives him. But he forgets about the shareholders, the company and staff and that is why it has been run head-first into the ground.
A prime example is the sex, drug and fraud scandal involving former CEO Tim Worner and Amber Harrison. It was all over the media that Tim Worner was using his position to groom female staff and other females in the industry for sex, using drugs at work and using shareholder’s money to help facilitate and cover-up the affairs.
And what did Kerry Stokes do when it hit the media? He spent $millions more of shareholders money on legal action against Amber Harrison, me for reporting it and others to cover-up the true extent of what was happening.
Kerry Stokes took a hands-on role in covering it up which was revealed by evidence given, in the Jane Doe matter against me, in court by Seven’s lawyer Richard Keegan who said he had regular phone and email contact with Kerry Stokes in relation to the matter.
It is very unusual for a chairman of a major company to be ringing a junior lawyer in a court matter but it shows what a control freak Kerry Stokes is and that most of the poor decision making at Seven is Kerry’s fault because he gave management very little say.
Everything from paying way too much for sport to running half-cocked legal cases that achieved nothing leads back to Kerry. Seven have already written down their recent investment in cricket by $50 million and if you go back to 2006 to 2008 Stokes ran the infamous C7 legal case which cost Seven $200 million in legal fees which they are possibly still paying off today. To rub salt into the wound Kerry Stokes also hopped into the witness stand in the C7 matter and Justice Sackville said Stokes “gave evidence that he knew was not true” and evidence that was “deliberately false” which is the definition of perjury.
I have come to know Stokes well since he first started suing me in 2014, had me jailed in 2017 for reporting on the corruption at Seven and is still trying to jail me against via the Seven West Media v Shane Dowling matter which is another time waster and cost Seven can’t afford. My interviews with his son Russell have also given me further insight into who and what Kerry Stokes is. There’s nothing to admire about Kerry.
It’s time for the bankers to move in and install real management at Seven.
There is a line of thought that Kerry Stokes or SWM’s parent company, Seven Group who currently own about 40% of SWM, might take it over but that would be throwing good money after bad and Kerry Stokes best days as a media mogul are long past. Even Rupert Murdoch who is regarded as the best media executive in the world is struggling to keep News Corp viable so someone like Stokes has no chance of reversing Seven’s fortunes.
But who knows, Stokes’ ego might force him to stick his hand in his pocket to keep control of Seven but all he would do is damage the company further.
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