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Zero Commission NZ Ltd and The Radio Network Ltd - 2014-126

  • Peter Radich (Chair)
  • Leigh Pearson
  • Te Raumawhitu Kupenga
  • Mary Anne Shanahan
  • Zero Commission NZ Ltd
Coast FM News
The Radio Network Ltd
Coast FM
Standards Breached

Summary [This summary does not form part of the decision.]Coast FM News

reported that Zero Commission ‘has been making low ball offers’ to shareholders of various companies. A majority of the Authority upheld the complaint that Zero Commission and its shareholders were treated unfairly as no opportunity was given to respond to the claims or the negative impression created. The minority did not consider the item was unfair as Zero Commission could reasonably expect some commentary from time to time that it would not like or agree with. The Authority unanimously declined to uphold the complaint that the use of the term ‘low ball’ was inaccurate as this was a subjective term, not a point of fact. The controversial issues standard was not applicable because the item focused squarely on one company, not a controversial issue of public importance.    Upheld (by majority): Fairness Not Upheld: Accuracy, Controversial Issues No Order  


[1]  A Coast FM News bulletin reported: 

It seems Waiheke Island-based Zero Commission is at it again, this time targeting Steel & Tube Holdings shareholders. Zero Commission, jointly owned by Roy Jackson and Philip Briggs has been making low ball offers and in the past have targeted companies like Pumpkin Patch, New Zealand Oil & Gas and Smith City Group. Steel & Tube chief executive Dave Taylor says he was legally required to provide Zero Commission a copy of the company’s share register listing shareholders who hold up to 1,000 shares. He says these shareholders may be approached to sell shares at an offer lower than the market value. 

[2]  Roy Jackson, Managing Director and shareholder of Zero Commission NZ Ltd (Zero), complained on behalf of his company, alleging that it was inaccurate and misleading for The Radio Network Ltd (TRN) to accuse it of making ‘numerous low ball offers in the past’ and to imply that its offer to Steel & Tube shareholders was ‘low ball’. Mr Jackson maintained that the item was unbalanced and that Zero and its shareholders were treated unfairly as the news item distorted the situation and no opportunity was given to Zero to comment or to rebut the claims made in the item.   [3]  The issue is whether the broadcast breached the fairness, accuracy and controversial issues standards, as set out in the Radio Code of Broadcasting Practice.   [4]  The news item was broadcast on 4 September 2014 on Coast FM. The members of the Authority have listened to a recording of the item and have read the correspondence in the Appendix.  

Were Zero Commission and its shareholders treated unfairly?

[5]  The fairness standard (Standard 6) states that broadcasters should deal fairly with any person or organisation taking part or referred to in a programme. One of the purposes of the fairness standard is to protect individuals and organisations from broadcasts which provide an unfairly negative representation of their character or conduct. Programme participants and people referred to in broadcasts have the right to expect that broadcasters will deal with them justly and fairly, so that unwarranted harm is not caused to their reputation and dignity.1    [6]  Mr Jackson asserted that the use of the term ‘low ball’ ‘distorted the original NZX announcement by Steel & Tube [which referred to Zero’s offers as “below market value”] and brought into play inferences totally [absent] in the Steel & Tube announcement’. He contended that ‘low ball’ operators make offers at a discount value in the range of 30 to 50 percent, whereas Zero made unsolicited offers ‘below market value’ in the range of three to eight percent. He argued that the term ‘low-ball’ was a pejorative term and ‘offensive, negative, and emotive’, so fairness required that Zero was approached for comment. He considered that overall the company and its shareholders (himself and Philip Briggs) had been treated unfairly.   [7]  TRN stood by the accuracy of the use of the term ‘low ball’ (see paragraph [19] below) and maintained that Zero and its shareholders were treated fairly. It asserted that it was not the only broadcaster to classify Zero’s offers as ‘low ball’ and said the company had been ‘under the spotlight before for these offers and a number of companies have issued caution to shareholders over offers made by [Zero]’.   [8]  In the application of the rules of fairness it is usually the case that somebody about whom something adverse is to be said should be given an opportunity to comment. The gravity of the unfairness if this opportunity is not given will vary according to the particular circumstances of the case.2     [9]  The members of this Authority have reached different views on whether or not fairness principles required that Zero be given an opportunity by the broadcaster to comment for the item.  

Majority View (Mary Anne Shanahan, Leigh Pearson and Te Raumawhitu Kupenga)

[10]  In the majority’s view, the implication created by the broadcast was that Zero was making offers to shareholders that did not reflect the market value of the shares and essentially that there was something untoward or dishonest about its practices. Whilst we find we are not able to determine the accuracy of the description of Zero’s past or present offers in a subjective term as ‘low ball’ (discussed further below), Zero had an alternative description and explanation of its practices and TRN should have given Zero an opportunity to comment and to mitigate any potential damage to its business interests and reputation.   [11]  Further, while other media outlets may have used the term ‘low ball’ in reference to the offers made by Zero, this did not excuse this broadcaster from complying with its obligation to treat Zero and its shareholders, who were referred to by their full names, in accordance with established fairness principles.    [12]  Guideline 6a says that a consideration of what is fair will depend upon the genre of the programme (for example, talkback radio, or factual, dramatic, comedic or satirical programming). We emphasise that commentary on financial and other matters is not to be discouraged. A different fairness consideration may have been applied had the statements been made, for example, in the context of financial commentary, a panel discussion or a talkback environment. However, in this news bulletin, we think listeners would have expected to hear Zero’s side and the company should have been given the opportunity to comment.   [13]  We are satisfied that upholding this aspect of the complaint would not unreasonably restrict the broadcaster’s right to freedom of expression. We are not saying that the item should not have been broadcast, or that Zero should be shielded from robust criticism or public challenge. However, the public benefit of such challenge is undermined by unbalanced and unfair reporting. The fairness standard requires, particularly where the item is presented as ‘news’, that Zero be invited to gives its explanation to balance the allegation made by the broadcaster. The public good is served when viewers are sufficiently informed so that they can assess where an offer sits in the context of the types of offers the subject of warning. Accordingly, we uphold the Standard 6 complaint.  

Minority View (Peter Radich)

[14]  This complainant undertakes commercial operations in the public domain. Typically it makes off-market offers for shares in publicly listed companies at less than market price. It targets small shareholders who may be less informed. It justifies its approach by saying that on-market sales would incur costs which its sales avoid thereby producing an acceptable result for shareholders. There is scope for argument about whether this is correct.   [15]  The news item in question was that the CE of a company whose small shareholders were being targeted was issuing a warning to shareholders. The broadcaster was in my view entitled to broadcast this warning as an item of news. I do not believe that the broadcaster needed to go to the complainant to get its views before the broadcast.   [16]  The complainant operates in an area where it has to expect robust treatment, comment, criticism and examination. It cannot be too sensitive. I would not like to see a broadcast such as this constrained in an area where ventilation is beneficial. We do not find that the broadcast was ‘inaccurate’. I think it is going too far to say that here the complainant was treated unfairly because it was not given an opportunity to comment before the broadcast took place. I think that this would unduly constrain a broadcaster’s freedom in relation to items of this kind. I do not see an opportunity to comment as having arisen because this was a ‘news’ programme. Other media is replete with warnings about off-market share offers at less than market price. Broadcasting standards need to be broadly consistent with general media standards.   [17]  For these reasons I would not uphold the fairness complaint.  

Was the broadcast inaccurate or misleading?

[18]  The accuracy standard (Standard 5) states that broadcasters should make reasonable efforts to ensure that news, current affairs and factual programming is accurate in relation to all material points of fact, and does not mislead. The objective of this standard is to protect audiences from receiving misinformation and thereby being misled.    [19]  Mr Jackson argued that the use of the term ‘low ball’ to describe Zero’s past and present offers was inaccurate and misleading and the label ‘below market value’ should have been used instead. His arguments are outlined under fairness (see paragraph [6] above).   [20]  TRN stood by the accuracy of the item, saying that it had sought a definition of ‘low-ball operator’ from various dictionaries and independent commentators, which ‘suggested that if an unsolicited offer is made that is significantly lower than the market price then it could be considered low ball’.   [21]  The first question is whether the reference to ‘low ball offers’ in the item was a ‘material point of fact’ to which the accuracy standard applied. A ‘fact’ is verifiable; something that can be demonstrably proved to be right or wrong. In our view, ‘low ball’ is an inherently subjective term, notwithstanding the definitions provided by the Financial Markets Authority and various dictionaries. The definitions, which refer to offers that are ‘significantly lower’ than market value, are themselves subjective, involving matters of degree in terms of what is ‘significant’. Additionally, the choice of language used in the item was imprecise, opinion-based and subjective, such as ‘it seems’ and ‘is at it again’. This sort of language and specifically the reference to ‘low ball offers’ is not sufficiently precise to found a complaint of inaccuracy; it is not an objectively determined matter of ‘fact’.    [22]  The Authority therefore unanimously declines to uphold the complaint under Standard 5.   [23]  The majority notes, however, that the harm alleged to have been caused by the use of the term – that it was disparaging and carried undertones which painted a negative picture of Zero and its shareholders – is more a matter of fairness. The complainant’s concerns would have been adequately addressed if the broadcaster had sought comment from Zero so that it had the opportunity to mitigate any perceived damage to its reputation.   

Did the item contain a discussion of a controversial issue of public importance, requiring the presentation of alternative viewpoints?

[24]  The balance standard (Standard 4) states that when controversial issues of public importance are discussed in news, current affairs and factual programmes, broadcasters should make reasonable efforts, or give reasonable opportunities, to present significant points of view either in the same programme or in other programmes within the period of current interest. The standard exists to ensure that competing arguments are presented to enable a viewer to arrive at an informed and reasoned opinion.3    [25]  Mr Jackson argued that no other viewpoints were sought on the assertion Zero’s offers were ‘low ball’ and ‘no reasonable opportunity was given to either Steel & Tube or Zero to allow any other point of view to be made’.    [26]  A number of criteria must be satisfied before the requirement to present significant alternative viewpoints is triggered. The standard applies only to news, current affairs and factual programmes which discuss a controversial issue of public importance. The subject matter must be an issue ‘of public importance’, it must be ‘controversial’ and it must be ‘discussed’.4     [27]  The Authority has typically defined an issue of public importance as something that would have a ‘significant potential impact on, or be of concern to, members of the New Zealand public’.5  A controversial issue is one which has topical currency and excites conflicting opinion or about which there has been ongoing public debate.6    [28]  The Coast FM News item briefly canvassed offers made by one company. We agree with the broadcaster that the item was unlikely to have ‘more widespread interest [beyond]… the company itself and current or potential customers’ and that it therefore did not amount to a discussion of a controversial issue of public importance as envisaged by the balance standard.    [29]  Accordingly, we decline to uphold the Standard 4 complaint. The majority again points out that the complainant’s concerns would have been adequately addressed had Zero been approached for comment, in the interests of fairness – rather than balance.    For the above reasons a majority of the Authority upholds the complaint that the broadcast by The Radio Network Ltd of an item on Coast FM News on 4 September 2014 breached Standard 6 of the Radio Code of Broadcasting Practice.    [30] Having upheld the complaint, the Authority may make orders under sections 13 and 16 of the Broadcasting Act 1989. Given that our decision is not unanimous, we do not intend to make any order on this occasion.   Signed for and on behalf of the Authority         Peter Radich Chair 18 March 2015     


The correspondence listed below was received and considered by the Authority when it determined this complaint:   1      Zero Commission’s formal complaint letters – 8 and 11 September 2014 2      TRN’s response to the complaint – 18 September 2014  3      Zero Commission’s referral to the Authority – 20 September 2014  4      TRN’s response to the Authority – 30 September 2014     

Commerce Commission and TVWorks Ltd, Decision No. 2008-014 2 See, for example, HC and CT and Television New Zealand Ltd, Decision No. 2010-163 3 Commerce Commission and TVWorks Ltd, Decision No. 2008-014 4 For further discussion of these concepts see Practice Note: Controversial Issues – Viewpoints (Balance) as a Broadcasting Standard in Radio (Broadcasting Standards Authority, June 2009) 5 Powell and CanWest TVWorks Ltd, Decision No. 2005-125 6 See, for example, Dewe and TVWorks Ltd, Decision No. 2008-076