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Seven pursues legal action on James Warburton contract

UPDATED: It's war-burton..... Seven initiates legal action to enforce a contract with James Warburton but denies it is suing anybody.

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UPDATED: It’s war behind the scenes at Seven and TEN with news today that the Seven Network is taking legal action to enforce a contract it has with  James Warburton.

Warburton, who has been Seven’s head of digital media and sales, is due to become CEO in mid-July, but Seven is fuming over what it views as poaching and the timing of his exit.

Warburton was brought to the table at TEN by Acting CEO Lachlan Murdoch, said to have lead to a rift with James Packer who has since stepped down from the Board.

Warburton’s contract was up for renewal with Seven but his contract has a post-employment restraint that prevents him from working for a competitor for 3 months.

While TEN has announced he will begin work on July 14th, Seven’s clause would mean he could not start until October 14th.

Earlier today TEN issued a statement saying it had received court documents indicating that Seven had initiated proceedings against both parties.

“TEN considers that it has acted properly and in a way that is consistent with Mr. Warburton’s employment obligations and will be defending any proceedings accordingly,” it said.

Seven has since denied it is suing any party, a headline that was circulating in media this morning. The legal stoush is over enforcing a contract between employer and employee.

Seven said in a statement this afternoon, “In response to Network Ten’s statement to ASX this morning, Seven Media Group (“Seven”) advises that in instituting proceedings, it is only seeking to uphold the notice provisions of Mr Warburton’s employment agreement and the restraint provisions under the Management Equity Plan which if honoured would mean that Mr Warburton could not work for a competitor until 14 October 2012.

“Seven does not think it is appropriate to comment further but is concerned that the Ten public statement remain uncorrected.”

The matter will appear in the Sydney Supreme Court tomorrow.

As one of Seven’s inner circle, losing Warburton to TEN is a significant blow to the network. He is no longer working within Seven while he awaits a start-up with TEN.

Both networks are also to make a joint bid for AFL rights soon.

Meanwhile there is also a highly damaging affadavit published by The Australian which claims Warburton was offered a chief executive’s role at Seven Media Group by Kerry Stokes four days before defecting to TEN …..an eye-popping read!

Source: The Age, The Australian

  • Tagged with AFL

25 Responses

  2. I’m not saying he is smug (I’ve never met the guy). I’m just saying it wouldn’t kill him to smile. Even the link above to the article in The Australian has another one. That’s five different photos and not one smile. I just think it’s weird.

  4. Phoenix: The earliest date which on which Warburton’s employ could cease according to Seven is October 14 2011. Under the Seven contract system a new contract would roll over to 2012 with the same conditions if it had not been renegotiated or terminated in writing. Complicated!

  5. I agree with Steve. I stated in an earlier article: Seven should just take it on the chin and move on. They are just postponing the inevitable and wasting time and money for all involved. They are going really well in the ratings at the moment and shouldn’t delve into distractions.

    Honestly, for me it sends a pretty bad message from an employment perspective for Seven. They are acting like “Once you join us, if you try to leave we will make it as hard as possible for you.” Not a good attitude.

  6. “He is no longer working within Seven while he awaits a start-up with TEN”

    Does that mean he’s not getting paid?
    I don’t understand the no work for a competitor stipulation. What difference does it make if he starts in July or October? Let it go Seven you’re already winning the ratings race and the demos.. what more do you want??

  7. Thats such a detailed affadavit you’ve gotta wonder if the conversation was recorded! IMO there is nothing more petty than a no-compete clause in an employment contract, and the period mentioned here (18 months) is absolutely ridiculous

  10. Seems a bit silly to sue; he is waiting the 3 months stipulated in his contract. He no longer works at 7. His contract was expired; there doesn’t seem to be any breach with the information presented to us.

    Seven will loose same as Ten lost when they sued Nine for poaching Jessica Rowe. Its just a bit pointless head down Seven and just spend that money on developing more quality content; let it go.

  11. It looks like “all bets are off” between the TV networks and poaching credible management staff is now fair game.

    Of course, TEN needn’t worry…

    By the way, I reckon young Laughy will end up being the main player at the network.

    After buying the Nova Radio Network for a song last year and now having TEN handed to him on a platter, what a brilliant opportunity for multi-media cross-promotion aimed squarely at the 14-35 y.o. market.

  12. If seven are going to sue over the CEO appointment Ten should sue over copying Masterchef. Seven take other network people and no problem there but the other way around is different. James finishes with 7 before starting at 10 so no big deal. 7 are just acting like little immature brats. Even SBS are a far more credible, trusting network then 7. 7 do not deserve to be number 1the way they carrry on.

  13. well it makes sense. for 7 to have somebody that high up in the chain without ’employment and post-employment restraints’ in their contract is just stupid. even low level jobs these days come with some sort of post-employment restraint.

  15. A significant blow to the network that is number 1 in ratings ??.
    Channel Ten needs him more anyway. I look forward to July 14 and future changes to Ten.

  20. Both networks 7 and Ten dont need devision at this stage especially with the AFL rights coming up for Grabs. I think 7 was somewhat blindsided with James Warburton being appointed the new CEO at Ten. However 7 has itself to blame they clearly had no succession plan for David Leckie and James Warburton where Warburton would take Leckie’s job at some point. The only reason they are suing is because they have the cash. The question now is does Ten have enough money to fight this case and will it win. Iam sure the new board members Gina Rineheart, Bruce Gordon and Lachlan Murdoch didnt purchase shares in Ten to fight Legal cases against other media busineses.

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