The media has been watching the unfolding drama of Seven Network’s legal action against its former executive James Warburton with a mixture of glee and horror.
Seven launched court action attempting to stop Warburton from moving to Ten Network as chief executive in October.
Seven says he’s restrained from working for a competitor for 12 months; Warburton says he’s free from this restraint because he was effectively sacked by the head of Seven’s television business, David Leckie.
The case has turned into a bit of a circus, largely because of an incredibly detailed affidavit from Warburton detailing the colourful conversations between he, Leckie and Seven chair Kerry Stokes.
There’s been claims of media buyers being insulted, wine drunk at lunchtime and duelling egos.
In other words, some fairly dirty (and fairly amusing) linen is being aired in a very public forum.
The case is continuing and in the meantime Seven is getting on with business – the merger of Seven Media Group and West Australian Newspapers received the backing of WAN shareholders earlier this week and will be completed in the coming months.
However, you have to wonder whether it’s all really been worth it for Seven.
Yes, there is a principle at stake here – companies put restraint clauses in executives’ contracts for a very good reason, and Seven’s pursuit of Warburton sends the message to other executives that these clauses are taken seriously.
But the time, money and distraction of the case might well have the Seven bosses wondering if they should have bothered.
There’s no great amount of money at stake here and Warburton is going to get to Ten eventually.
Seven might hold him up for a few months, but will the advantage gained from that really outweigh the effort they are spending to pursue him?
Maybe it will. But it’s a great example of why automatically referring everything to the lawyers isn’t always the best policy, particularly in an SME where the disruption and expense of a legal fight is far greater than in a company such as Seven.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
