Tova O'Brien employment case against Discovery: Three has already lost - Duncan Greive

Originally published by The Spinoff

OPINION:

An attempt to enforce a restraint of trade on former Three political editor Tova O'Brien could set a troubling precedent in our media. But Duncan Greive argues that however it plays out, Three loses.

This should be the most thrilling and terrifying time of Tova O'Brien's career. She is preparing to debut a brand new medium, one that requires filling hours of daily radio against the most formidable foe in all of media – the agenda-defining colossus that is Mike Hosking.

Instead she finds her attention focused somewhere entirely different – a hearing of the Employment Relations Authority to determine whether her former employer, Discovery, owner of Three, has the right to enforce a restraint of trade clause in her contract to delay her starting a new role in radio at MediaWorks.

(Confusingly for O'Brien and for all of us, when she signed the contract four years ago, MediaWorks and Three were one and the same – it's highly likely that had she taken up a similar role prior to the TV division being sold off there would have been no thought of enforcing the clause.)

O'Brien, MediaWorks and Discovery are refusing to comment publicly while the case is before the ERA, but the situation is deeply unfortunate for all involved. It reveals a complete and highly acrimonious breakdown of the relationship between companies that worked highly productively together for many years, and leaves each focused on one another at a moment when they really need to be thinking about their true competition.

It's worth laying out the path here, and the stakes, before analysing the relative merits of their positions. MediaWorks was purchased in stages from 2012 by Oaktree Capital, and consisted of a glamorous but only marginally profitable TV network in Three, and a large chunk of New Zealand's radio stations including the likes of the Edge and an under-performing talk station in Radio Live. It became apparent reasonably quickly that TV was losing audience faster than anticipated, and the station was essentially holding back the value of the still robust radio assets.

There followed a long period of chaos under then CEO Mark Weldon, during which Three lost some of its biggest names – the likes of Paul Henry, John Campbell and Hilary Barry. The latter two ultimately ended up at the state-owned arch rival TVNZ, after decades with the plucky upstart that was TV3. Three, as it rebranded, has always been known as probably the greatest incubator of talent in our media, and after those high-profile losses it brought the likes of Sam Hayes and Kanoa Lloyd into prominent roles to show that its talent pipe remained flowing.

Three's political editor Paddy Gower with news presenters Hilary Barry and Mike McRoberts in 2018. Photo / Getty Images

When Paddy Gower signed off as political editor after the 2017 election, O'Brien was the obvious choice to replace him. She'd been with the company for 14 years, cycling through 12 roles in that time. And she knew exactly what to do, taking on the tradition established by Gower and his predecessor Duncan Garner and setting the political agenda.

Through all this time her rival was 1 News – the juggernaut of our television for decades, which Three trailed significantly in total audience, making political coverage a rare area in which the channel felt like it had a lead on its rival. And while audience share did not radically change in her time, she became a very public face of the channel, and a major part of its identity, just as Garner and Gower had before.

A conscious uncoupling

When MediaWorks finally found a strong and willing buyer for Three in December of 2020, both companies were elated. There were rumours that Oaktree's patience was wearing thin, and that Three would not be held forever. Discovery brought massive scale, great content and IP and was in major growth mode. Likewise, the radio and outdoor advertising parts of MediaWorks could focus on their very strong and profitable businesses without feeling like they had to carry the loss-making TV assets.

For a year the two remained close collaborators, most meaningfully expressed on the AM Show, a hybrid TV and radio format broadcast on both Three and Magic Talk, MediaWorks' only talk format station, a distant third to the juggernaut that is ZB, and RNZ. However, a string of ugly scandals tarnished the Magic brand, and with AM Show host Duncan Garner abruptly leaving midway through the year, it became inevitable that renewal was coming to both brands.

What MediaWorks did was admittedly audacious – scooping up a bunch of current and former Three stars, the likes of Mark Richardson, Garner, Lloyd Burr and finally O'Brien. That this would have annoyed the hell out of Three is a given, but so long as it remained confident its talent pipeline remained intact, it should have publicly registered as nothing more than an annoyance. Renewal is an opportunity as well as a danger, and the raid allowed Three to give more prominent roles to Ryan Bridge and Melissa Chan-Green in a rebooted AM Show, now simply called AM, and to elevate the highly capable Jenna Lynch to O'Brien's iconic Three political editor role.

How did it come to this? And where does it go?

Under normal circumstances that would have been the end of it. The restraint-of-trade clause in media typically exists only for the most senior talent, and only for the roles that are effectively mirrored across the industry. New Zealand's media mostly operates as a series of micro-duopolies, with TVNZ and Three, Stuff and the Herald, and a whole clutch of rival radio formats. It's relatively rare for people to move beyond what they know, and while there are a number of examples of people adept at multiple formats, the competition is generally understood to be confined to specific mediums.

What Discovery seems to be arguing is that the digital convergence of all media into more direct competition spells the end of this era: that there is an attention economy and a news zeitgeist and that radio and television and print and online are all in competition with one another.

On one level this is undeniably true. The boundaries that once existed between mediums are much hazier, and there is no doubt that some of O'Brien's segments for Today FM will be put online and compete for attention bandwidth against Ryan Bridge's takes on the same issues. Both are active on social media, and will compete for audience mindshare on Twitter.

Mark Richardson and Ryan Bridge on the AM Show last year. Photo / AM

Still, the blurring of lines has happened far more slowly than was anticipated a decade ago. O'Brien's new boss Dallas Gurney points out that the AM Show had 8400 monthly listeners streaming it through MediaWorks' Rova app last year. By comparison, it had 77,000 a week on terrestrial radio. O'Brien's show is a commuter radio show, so her competition is Morning Report and the Mike Hosking Breakfast.

Indeed, MediaWorks is so invested in this launch that it has moved The Rock from its longtime home at 90.2FM in Auckland way up the dial to 106.2FM. This puts Today FM right alongside ZB's 89.4FM – a huge signal of the ambition to build a new station that tackles the multi-decade Everest of New Zealand radio. More to the point, O'Brien was not a major part of the AM Show. The core of her job was breaking and framing political news at 6pm – which she is now many hours and a whole medium away from.

But this is about much more than just O'Brien. If her new role is ruled to be captured by the restraint, then all in the media should be concerned. It would potentially hand a huge amount of power to employers, who would surely start to introduce such clauses wherever they had the power to do so. If you knew that the consequence of leaving your job was three months of standing down, unpaid, how likely would you be to leave it? Other industries' workers should be watching closely too.

This is happening after a full decade of a financial tide of advertising flowing out of curated media like broadcast and print into the wildlands of social media. This has had a major weight on both the total number of roles available in media, and the compensation for those roles. If the media were to find that in addition to all this, moving between companies carried an extra financial burden, this would surely only increase the steady flow out into other communication-based industries.

The ERA hearing has been postponed, meaning it will likely drag out into next week. But irrespective of the outcome, Discovery should consider whether it was worth going to war over this, and push to settle. The case has put O'Brien across news sites and bulletins for days on end, just as the channel gears up to launch AM. It makes them look wounded and vindictive at a time when they should be confident amid the renewal of a new CEO and owner, and with a slate of exciting new shows.

It also harms both parties. Rivals TVNZ and NZME have a loose alliance, sharing talent like Jeremy Wells, Jono and Ben and Anika Moa. Part of the reason they teamed up in the first place was the formidable cross-platform promotional opportunities that existed for the old MediaWorks. Now taking advantage of talent sharing will be that much harder with the inevitable ill will generated by this, and the launch of both AM and Today will be diminished by the distraction this creates.

The bigger point and more lasting damage is that media remains a talent-based industry. Discovery needs to ask itself how current and prospective staff, especially those with ambition and skill, feel about its inability to take the loss, and what it implies about how it might treat them should a similar dispute arise.

In this way, however the hearing plays out, Three already looks like it has lost.