February 11, 2012

News Ltd and the Melbourne Storm scandal

Sometimes the news of the day is just so extraordinary you wonder if it isn’t fiction instead. A series of facts collide like a train wreck to produce a story that crashes through the public consciousness.

Two such stories have gripped Australia in the past week.

The Melbourne Storm rugby league salary cap rort is said to be the biggest scandal ever in Australian sport.

For the benefit of overseas readers, Melbourne Storm was stripped of its last two premierships, fined $500,000 and forced to return $1.1 million in prize money. The club has also been banned from accruing any premiership points this season.

Its crime was to spend $1.7 million above the salary cap over five years.

I don’t like rugby league and the controversy confirms my prejudice against the sport as being mobile wrestling played by thugs and managed by shonks.

They are subjective views, but these facts are relevant when putting the Storm controversy into context:

  • The amount involved is only $340,000 per year;
  • Melbourne Storm is owned by Rupert Murdoch’s News Limited.

It’s incredible to think that senior people in News Ltd were unaware of the rort.

It’s less incredible to observe that very little analysis of this fact has been reported in News Ltd newspapers.

The Fairfax press is taking a closer interest, as this report in The Age reveals.

Discredited Storm chief executive Brian Waldron, who News chief John Hartigan described as “the architect” of the scam and a “rat” has promised to disclose everything under oath at a properly constituted public inquiry.

That must make a few people nervous, especially Waldron’s comment:

“I am … prepared to give the entire background to Rupert Murdoch so that he has a full understanding of how his company has managed a $66 million investment in the Melbourne Storm since its inception.”

It’s a murky world when a media company has commercial interests outside of publishing.

I’m not suggesting that News executives knew about the salary cap breach, but they should have known earlier if they were properly overseeing their investment.

The other larger-than-life news story concerns West Australian Treasurer Troy Buswell, which I will comment on separately.

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