Under cross examination from lawyers for Mr Healy on Friday, former Tennis Australia chief executive Steve Wood told the Federal Court that during negotiations with Seven in October 2012 he sent a copy of Seven’s offer to IMG’s Asia Pacific head, Chris Guinness.
“You sought his advice in those circumstances. You sent the most recent Channel 7 offer to Guinness? Asked Mr Healy’s counsel, Neil Young, QC.
Mr Wood – whose memory of events seven years ago was patchy – said he didn’t recall if it was the most recent offer. “I did send an offer,” he said.
Mr Wood said he asked Mr Guinness for advice because he did other deals with Tennis Australia on behalf of IMG and knew a lot about sports rights bidding processes.
“We could calibrate what was best practice,” Mr Wood said in explaining his actions.
Only three weeks later, on November 12, IMG drafted its own offer for the rights. It is not clear whether it disclosed its receipt of information about a rival bidder in its offer.
Mr Wood was quizzed on whether he had asked IMG to bid to encourage Seven to increase its offer.
“Did you invite him to put together an offer because it might provide Tennis Australia some leverage in its discussion with Channel 7?” Dr Young asked.
Mr Wood replied: “I don’t recall.”
Justice Jonathan Beach asked Mr Wood to clarify whether Mr Wood using IMG as leverage would be likely “or does it jar?”.
“I just don’t recall”, Mr Wood said, before adding: “Because IMG was holding our international rights it could make sense to have someone who could do the lot worldwide.”
While he could not recall if he had encouraged IMG to bid, Mr Wood said he did use IMG’s offer when negotiating with Seven.
“You intended to use that offer in your discussion with Channel 7, did you not?” Dr Young asked.
“Yes”, Mr Wood replied.
Earlier this week the court heard that emails between Seven executives showed Mr Mitchell was helping Seven in its offer and that Mr Wood had complained to Mr Healy about Mr Mitchell “hijacking” the negotiations to favour Seven.
The court also heard this week that IMG’s offer was indicative and non-binding and would also not give Tennis Australia a key element that the organisation wanted – the right to become the host broadcaster using Seven’s old contractors – and that Tennis Australia had a report underlining the financial issues affecting the other bidder, Network 10. Network 10 went into administration in 2017.
Tennis Australia awarded Seven the Australian Open domestic broadcast rights for five years in 2013 for $195 million.
Ten had indicated it was prepared to offer up to $250 million, while IMG made two separate offers. Nine, the owner of this newspaper, currently holds the rights to the Australian Open.
ASIC is seeking declarations Mr Mitchell and Mr Healy breached the Corporations Act and orders disqualifying both men from being company directors.
The case continues.
Sarah Danckert is a business reporter.