Reputation crises for Optus and AFL; TV landmarks; and a bloody day on the ASX
Welcome to Unmade, mostly written on an exceptionally pleasant spring Friday in Sisters Beach, Tasmania.
Happy National Ghost Hunting Day.
Today’s writing soundtrack: Autofiction, by Suede (thanks for the tip, Rich)
Unmade’s paying members got this email first. That could be you.
What with Monday’s night’s Royal funeral, and the end-of-week public holiday, it’s been an irregular few days. It was a week of challenged reputations (think Optus, AFL and Lachlan Murdoch) and of TV milestones (think Mad As Hell, funeral viewing figures and astonishing catchup numbers for SBS). So journey with me as I look back on the week that was…
The Hawks scandal
On Wednesday morning, the ABC published an article from its sports analyst Russell Jackson that got harder to read with every paragraph.
Written in precise, non-emotive language, the article detonated perhaps the biggest reputational bomb the AFL has experienced.
And that’s saying something for a sport that drove Adam Goodes out of the game because of his skin colour, saw systematic racism flourish inside Collingwood, produced the Adelaide Crows training camp scandal, delivered the Essendon doping saga, and before that the Carlton salary cap rort. At some point, observers might start to think the code has a cultural problem.
The story alleged that senior executives at Hawthorn deliberately separated young First nations players from their partners and pressured at least one couple to terminate a welcome pregnancy to prioritise the player’s career. It was impossible not to get angry reading it.
Reaction went well beyond the sports pages. If the scandal had broken three weeks earlier, in the late stages of the TV rights negotiation, it might have derailed the deal. Who could justify giving $4.5bn to that code?
Individual reputations are on the line.
Assuming the truth of allegations is accepted, it seems unlikely that some of the accused individuals will be allowed to work in senior roles in the AFL again. How could they when they were apparently so cavalier towards the young players in their care?
Consciously or otherwise, the establishment began to choose sides. Eddie McGuire, whose presidency at Collingwood ended early thanks to his tone deaf handling of his club’s institutional racism report last year - which he had tried to spin away as “a proud day” for the club - was one of the first on air on Nine’s Footy Classified that night.
McGuire had clearly been talking to sources within the club, and became their voice, asserting the ABC’s Jackson had failed to put the allegations properly ahead of publication. A furious Jackson demolished those claims on Twitter.
Footy on Nine @FootyonNine
"If these allegations are proven, Alastair Clarkson and Chris Fagan will not coach again." The Footy Classified panel discusses the Hawthorn report allegations. #9FootyClassified | Watch on @Channel9 https://t.co/4gzVCcFGryThe end of the season tends to be when sponsorship deals are renegotiated. I wonder how many sponsors will decide Hawthorn is too toxic, or at the very least reputationally risky, and take the opportunity to shift their marketing budgets elsewhere.
The scandal changes the trajectory of outgoing CEO Gil McLachlan’s final few months at the helm of the AFL. He almost walked out a winner. Instead of the victory lap of the TV rights deal and milking Tasmanian taxpayers for a billion dollars for the right to join the league, he’ll spend his last weeks dealing with the fallout. Rather than that $4.5bn, his reputation and legacy will be defined by how the Hawks scandal is handled.
The Optus data scandal
Meanwhile, Optus had the worst week in its 40 year history.
The telco revealed on Thursday that it had suffered a major data breach. It wasn’t the usual run-of-the-mill (but already pretty bad) loss of names and email addresses suffered elsewhere; it was much, much worse: it included security ID details such as dates of birth, driving licence and passport details. In other words, well over the 100 points of ID needed to open fraudulent bank accounts or hack customers across the web.
Australians now divide into two categories: those who wish they weren’t with Optus, and those who thank their lucky stars that they are not.
It doesn’t help perceptions that, as The Guardian reveals this morning, Optus has been lobbying against giving people the rights to erase their personal data as being too hard.
The breach now boosts the case for a GDPR-scale data and privacy protection law for Australia. That would mean onerous obligations for all brands, but perhaps it’s a necessity.
Just like that, Optus’s strong brand trajectory has completely changed. However, that careful brand building won’t go to waste. The previous investment in the brand in now Optus’s main resource in asking for the benefit of the doubt from the public in its system failure.
But for months and probably years, the company will be seeking to rebuild trust that it can look after customers’ data. The story will stay in the headlines. There will be class actions and fraudulent activity the brand will get the blame for.
Not that the team behind the brand will be helpless in this. There are expensive data protection services Optus can pay for its customers.
Optus communicated well during its 2018 “Floptus” World Cup streaming problems and won back the support of fans when the service became more reliable.
Finding the right tone for the inevitable full page ads (which I’m sure will start running tomorrow or Monday) will be trickier - this is, after all, much more serious.
This disaster didn’t start within the brand team, but that’s where the rescue will need to come from.
Crikey vs Murdoch
Meanwhile, the defamation case between Lachlan Murdoch and Crikey has been creeping up the news agenda. Murdoch alleges he was defamed in an opinion piece in Crikey criticising Fox News’s role in the January 6 Capitol insurrection.
The two sides had their first in-court skirmish yesterday after filing their statements of claim.
There’s a lot that’s unusual about the case, not least of which is that the Murdochs, and Rupert Murdoch in particular, don’t usually turn to the defamation laws to defend their reputations. Lachlan Murdoch clearly sees things differently to his father.
Then there’s the fact that Crikey’s CEO Will Hayward has become the masthead’s face in the battle, rather than proprietor Eric Beecher or editor-in-chief Peter Fray.
For Crikey, although there’s significant financial risk, it’s also a battle which matches its challenger brand values. Going on the front foot publicly may be its best move.
I was wrong about the case though. I predicted a few weeks back that it would be quickly settled. I don’t unfderstand why Murdoch would want a court case that would put Fox News’s inflammatory coverage of the 2020 US election in the spotlight, particularly if the legal discovery process allows for further exploration of what went on behind the scenes. Legal vindication might come at a high price.
Having previously wrongly predicted it would be quickly settled, I now find it hard to see how this one doesn’t go all the way to a full court confrontation.
TV milestones
Plenty went down in television this week.
Most remarkable was the lift in SBS’s catchup viewing for The Handmaid’s Tale. Credit to TV Tonight, which spotted that having delivered SBS an overnight metro audience of just 94,000 for the first episode of the fifth season last Thursday, Handmaid’s Tale jumped to a massive 619,000 via timeshifted and on-demand viewing over the subsequent seven days.
The overnight number rose from 94,000 to 143,000 via time shifted metro viewing (people who’d recorded the episode). Then it added another 42,000 overnight regional viewers, plus a further 38,000 regional viewers who time shifted (I was one of them. Best way to fast forward through the ads, innit?).
On top of that, 254,000 metro viewers and 48,000 regional viewers watched via video on demand.
In total that amounted to a 355% viewing uplift for the episode. I suspect that’s the largest of all time.
This week also marked the final episode of Shaun Micallef’s Mad As Hell. It drew an overnight audience of 455,000 for the ABC on Wednesday night.
Not many programs go out while still at the top of what they do, particularly not after delivering 15 series.
One of the sad truths about Australian television is that not much of it is world class (although having spend a few months watching British breakfast television last year, it should be acknowledged that ABC News Breakfast, Sunrise and Today all do it better than the BBC and ITV).
However, Mad As Hell was one of the few prime time satire shows that was up there with anything produced globally. I’ll miss it terribly.
Earlier in the week, the Queen’s funeral was a good reminder of the continuing power of television. There was a good attempt by Karl Quinn in The Sydney Morning Herald to understand what the real, global ratings were. Is it true that four billion were watching globally (on top of the 5.2m viewing peak in Australia)? Honestly, nobody quite knows.
And we also saw one more set of TV numbers this week. The Hollywood Reporter revealed data from a report by Media Partners Asia into Australian streaming service subscribers.
According to the report - which is based in best estimates as the individual services don’t publish their numbers - Netflix has a 30% share of the Australian market, followed by Disney+ and Amazon Prime on 17% each. Then comes Foxtel on a 12% share via Kayo, Binge and Foxtel Now. Stan languishes in fifth, with 11%.
The report also estimates that Stan’s share of streaming minutes has shrunk from 18% to 8%.
My prediction is that Stan has become a timebomb for the Nine share price. When the company eventually informs shareholders that the number of paying Stan subscribers is now falling (as I believe it is), it will take a hit.
Index: A sea of red (as Sean Aylmer would say)
It was a brutal Friday on the Unmade index, with Thursday’s public holiday leaving the ASX with two days of plunging global markets to catch up on.
And while the wider ASX All Ordinaries fell by 1.9% yesterday, the Unmade Index of listed media and marketing companies fared far worse, falling by 4.9%.
Several media businesses crossed negative thresholds.
Southern Cross Austereo’s share price briefly dropped to 90c, the lowest point in the company’s history. It finished the day on 92c, giving the company a market capitalisation of less than $240m. The company’s share price has dropped by 53% so far this year.
Seven West Media’s fall of 6.6% was enough to drag its market cap back below $700m. The SWM price is 32.5% down for the year to date.
Meanwhile, HT&E this week drifted below a $400m market cap and is 43% down for the year to date.
Nine, which fell by 5.3% yesterday, is drifting close to its lowest point this year, with a market cap of $3.3bn. The company has lost 33.9% of its value for the year to date.
The Nine-aligned real estate platform Domain is also trading close to its low for the year, this week falling back below a $2bn market cap. It’s down 46.4% for the YTD.
The Unmade Index’s current 651.5-point level is not the lowest for the year. That occurred in June when it briefly dipped to 587 points - down more than 40% on the 1000-point opening for the year.
Time to let you go about your weekend. With a few hours to go, I’m still undecided whether to pop out to my local bar to watch the AFL grand final. I’m not sure the code deserves much love this weekend.
Nonetheless, have a fantastic weekend whatever you do with it.
Toodlepip…
Tim Burrowes
tim@unmade.media
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