The radio network behind Sydney's top rating radio jock and former Wallabies coach Alan Jones just signed off on a curious corporate sponsorship deal which will probably keep the media regulator off Jones' back for three years.
Probably. With Australia's other radio king, John Laws, Jones was neck-deep in officialinvestigations five years ago and again last year after ABC TV blew the lid on fuzzy corporate sponsorship deals the two were involved in.
In return for corporate sponsorships, some worth more than A$1 million a year, Laws and Jones would essentially moderate their often scathing attacks on companies.
In most cases it actually meant the radio jocks would talk up their corporate backers in commentary without disclosing to listeners they were being paid to do it.
The saga became known as the "cash for comment" affair which, in Laws' case, saw the banking industry paying him more than A$1 million to sell positive stories for the sector.
The deal was concocted by the banks because Laws had proven a fierce critic and a PR nightmare, sledging them relentlessly for ripping off customers on fees.
After the deal was signed, Laws did a u-turn and started telling good yarns about the banking sector.
After a torrid six-month investigation in 1999 by the Australian Broadcasting Authority and blanket media coverage, both radio personalities emerged unscathed in the ratings but subject to much more scrutiny and disclosure rules about their commercial arrangements.
The whole issue emerged again last year when the ABA investigated a A$1.2 million-a-year sponsorship deal between Jones and Telstra.
The ABA again cleared both parties while criticising Jones for turning more friendly towards Telstra after the deal was struck - the key difference in the Telstra arrangement to previous deals was that the contract was with Jones' radio station 2GB and not Jones, although he does own a stake in 2GB's parent Macquarie Radio Network (MRN).
We shouldn't forget MRN is controlled by brash ad man, horse- racing fanatic and aspiring media player John Singleton. He also happens to control an advertising agency group which handles Telstra's A$80 million-plus advertising contract.
All of that gets us to the deal MRN struck with a minnow in the telecommunications game this week. To avoid the regulator's possible wrath, MRN and Telstra did not renew their contract, which expired on June 30.
Instead, MRN has stitched up a three-year deal with listed wireless broadband provider, Unwired, which is being paid for by 3.3 million Unwired shares, presently worth about A$1.3 million.
It's an unusual deal but one that carries the entrepreneurial hallmarks of Singleton who, while making truckloads from institutional investors in his time, loathes their conservative mindsets.
MRN is banking on Unwired making inroads into the national broadband market, against Telstra, and a subsequent rise in its share price.
In the end, the deal really gets down to the belief that Jones can move products and services among his fiercely loyal listener base.
The new arrangement includes "live reads" from Jones, which usually cost about A$5000 a pop. If Jones can sell more broadband subscriptions, he'll ultimately earn more money.
The interesting thing in the Unwired deal is that Jones' audience skews heavily to those aged over 45 and even more so the 55-plus bracket - not your typical wireless broadband user.
But Unwired says it wants to move beyond its inner-city, early-adopter customer base. Jones will certainly do that. Not many inner urbanites like the guy.
Jones, nevertheless, has managed to knock radio icon Laws off the top ratings perch in Sydney, although Laws is syndicated across the country.
But Sydney is where the political power and perception lie and Jones is in the box seat with politicians and listeners. His morning talkback slot on 2GB is Sydney's top rating programme.
Now, it seems, it's time to bring on a more transparent cash cow.
