Case Number: 2438

Council Meeting: MAY 2015

Verdict: Not Upheld

Publication: Sunday-Star Times

Ruling Categories: Balance, Lack Of
Unfair Coverage

1. SKYCITY Entertainment Group Ltd (SKYCITY) complains that an article published by the Sunday Star-Times on February 15, 2015 was inaccurate, unfair, unbalanced and in breach of Principle 1 of the Press Council principles.

2. The Press Council notes the Sunday Star-Times’ concern that SKYCITY has brought its complaint to the Press Council at a time when it was still willing to attempt to resolve it directly with SKYCITY. While it is desirable that complaints be resolved directly between the parties if at all possible, it is clear that in this case SKYCITY does not consider it possible to reach such a resolution and is not prepared to participate in further discussions with the Sunday Star-Times. In the circumstances, the Press Council considers it appropriate to consider and determine the complaint.

3. The Press Council does not uphold the complaint.

4. In February 2015 the Sunday Star-Times published two articles relating to SKYCITY, as part of a campaign against the payment of any further taxpayer money to SKYCITY’s proposed convention centre. They were on the same page and were intended to be read together.

5. The first article was headed “Govt puts SkyCity cards on table”. It began by reporting that the government was about to make an announcement about addressing the cost overrun on SKYCITY’s proposed convention centre, and went on to criticise SKYCITY’s programme of charitable donations through the SKYCITY community trusts.

6. The second article was headed “$5000 grant denied yet SkyCity asks us for millions”. It reported on two unsuccessful applications for funding, from a theatre trust and a choir, and was accompanied by two pictures side by side. The first picture was of a young chorister, with the caption “NZ Secondary Students’ Choir asks for $5000” while the second was of Nigel Morrison, Chief Executive of SKYCITY, with the caption “Nigel Morrison’s 2014 bonus was $1.4m”. Underneath the two was a strip setting out the figures for Mr Morrison’s salary, his total annual compensation for 2014 and the value of his home.

7. Before publishing the articles, the reporter submitted a list of questions to SKYCITY and obtained answers to them. SKYCITY also sent him a statement from the chairman of its Auckland community trust and declined the offer of a chance for its chief executive to respond to the Sunday Star-Times campaign.

8. After the publication, SKYCITY complained to the Sunday Star-Times about the articles. In general, the editor, Jonathan Milne, rejected the complaint, but he agreed that there had been some lack of clarity about the distinction between SKYCITY Queenstown and the SKYCITY Queenstown Community Trust and offered to print a clarification. He also offered to correct a possible inaccuracy in the second article if relevant information could be supplied.

The Complaint
9. SKYCITY makes it clear that the complaint is about the entire coverage of the two articles. It says the coverage ignores the principle of accuracy, fairness and balance, fails to give a fair voice to the opposition view, and misleads and misinforms readers by omission. The overall presentation leaves readers with the impression that somehow the salary of SKYCITY’s chief executive is connected to the long-standing decision of the SKYCITY community trusts to invest in charity work outside the arts sector. It also conveys the inaccurate impression that SKYCITY has cut its charity funding.
10. While the Sunday Star-Times used a small part of SKYCITY’s response to its initial enquiries, it did not take it into account in “framing the package as a whole”. In addition, it used inaccurate figures as a base for its claim that the community trusts’ charitable donations have declined. It is completely false to say “SKYCITY Community Trusts have slashed donations”.

11. Specifically SKYCITY says:

• The headline to the second article is biased, inaccurate and misleading in its implication that SKYCITY, rather than its community trusts, makes decisions on individual charitable grants.
• SKYCITY has never asked for taxpayer funds to finance the shortfall in the cost of the convention centre. Rather it was working with the government towards a solution.
• The comment that SKYCITY Auckland Community Trust grants have plummeted from 237 to 57 is misleading as it suggests a substantial decrease in funding. The numbers actually reflect a policy decision to fund fewer groups but for most rather than part of their funding request.
• A charities expert’s quoted comments describing SKYCITY’s charitable donations as a “drop in the ocean” are without foundation and misleading. SKYCITY was not given an opportunity to comment on these remarks.
• The article quotes Anna Bowron, a spokesperson for the NZ Secondary Schools Choir, as saying it was disappointing not to be given a reason for the decision to decline its application. The community trust always sends a letter explaining why an application has been declined.
• The statement that 300 groups had missed out on funding was made without balance or context. The number of successful applicants was mentioned, but not in the same article.
• The juxtaposition of the two pictures implied some sort of clash between the two for funding. This is misleading, inaccurate and inappropriate. Mr Morrison’s financial position is totally irrelevant to the funding decisions of the SKYCITY community trusts.

12. In response to Mr Milne’s offer to work with it to resolve the complaint, SKYCITY considered his response to date had been so inadequate that there was no point in taking up the offer.

The Sunday Star-Times Response
13. Mr Milne expressed disappointment that SKYCITY was not prepared to work with him to resolve the complaint.

14. He submitted that, particularly in the context of the public interest in the controversy over funding the SKYCITY convention centre, the management of the company’s statutorily-mandated charitable givings and the remuneration and performance bonuses of its chief executive were matters of very legitimate public/media scrutiny.

15. There was adequate balance in the articles. The responses from SKYCITY and the chairman of its Auckland community trust were taken into account and quoted at appropriate length.

16. There were no inaccuracies in the figures given for the decline in SKYCITY’s charitable donations. The figures were taken from the annual reports in the Charities Register, for 2013, 2013 and 2014, which were the only publicly available information. SKYCITY used a different timeframe for the figures cited in its complaint.

17. As regards the specific items in the complaint:

• For the most part, the distinction between SKYCITY and the community trusts is clear. There may have been some lack of clarity in the distinction between SKYCITY Queenstown and the Queenstown Community trust. This has been clarified online and there is an open offer to make a suitable clarification in the news item.
• The Sunday Star-Times stands by its report that SKYCITY asked the government to “stump up the cash”, based on explicit public statements by Nigel Morrison, Steven Joyce and John Key. The figure of $100m is taken from Mr Morrison’s stated figures of $70m to $130m, using the mid-point.
• The report of the drop in the number of grants is accurate. There is no implication of an equivalent drop in the amount distributed: that amount was accurately reported in the preceding sentence. There had, however, been a lesser drop in the amount distributed. This was calculated using the publicly available information, had been put to SKYCITY for comment and SKYCITY had not disputed it.
• Michael Gousmett, the charities expert quoted in the article, has expertise that makes him a legitimate commentator. He is entitled to express his views on SKYCITY’s charitable donation programme. The specific phrase “drop in the ocean” was not put to SKYCITY for comment – it is neither practical nor reasonable to put every comment to the other party for response. The Sunday Star-Times has reported several of SKYCITY’s other charitable works.
• Ms Bowron cannot recall receiving any feedback on the reasons why her application was declined. If SKYCITY sends a copy of the feedback, the Sunday Star-Times will make a correction.
• The two articles accurately reported the numbers of successful and unsuccessful applicants. It may well be that charitable trusts are refocussing their criteria in the face of increasing numbers of registered charities, but this is a point that SKYCITY could have made, and did not make, in supplying comment before the article was published.
• The photographs were part of a robust report on some of the dollars in play in the relationship between grant applicants and SKYCITY and its community trusts. The points raised are legitimate at a time when Mr Morrison is being paid to seek public funding for SKYCITY’s convention centre and when the casinos’ declining profits have translated into declining community trust donations. While it is technically correct to say that Mr Morrison’s performance bonus is not linked to SKYCITY revenue and the performance of the new convention centre, but to the company’s share price performance, it is clear that there is a connection between the two.

18. SKYCITY has taken issue with many of the statements in the two articles. Given the space available, it would have been impossible to include all the counterbalancing detail that it would have liked to see included. This, of course, does not release the Sunday Star-Times from its duty to provide a fair and balanced article, but the main questions the Press Council must consider are:

• Is the overall effect of the articles fair and balanced?
• Are there any material inaccuracies?

19. It is noted that the Sunday Star-Times quite properly sought comment from SKYCITY before publishing the articles, and that its reporters drew on that comment in writing the articles. In particular the material it cites to support its statement that SKYCITY Community Trusts have “slashed” donations consists of figures (a reduction from $3.1m in 2012 to $2.1m in 2014) that were put to SKYCITY for comment, and SKY CITY’s explanation was included in an appropriate position in the first article.

20. There has been a good deal of debate about the extent to which SKYCITY’s falling profit has reduced the amount paid to its community trusts and hence the amount available for charitable donations. Various figures have been obtained by making calculations over differing periods of time. However it is clear that the amount has reduced, and while it may be an exaggerration to say it has been “slashed”, there is sufficient information in the article for a reader to understand the extent to which funding has reduced, and, importantly, SKYCITY’s explanation of the reduction.

21. The problem presented by the cost overrun for SKYCITY’s proposed convention centre, as well as the history of the project and the government’s involvement in it, meant that it was a matter of substantial public interest on which strongly opposed views could legitimately be held. The Sunday Star-Times is entitled to hold and promote its own views, and to use strong language in doing so, provided it gives sufficient information to allow readers to form their own views about the basis for the campaign and provided it gives those with opposing views the chance to promote and explain them. The Press Council is satisfied that it has done so in this case.

22. There remains the question of inaccuracy. As to the specific items complained of:

• While the article did not spell out the relationship between SKYCITY and its community trusts, it made it clear that they were separate bodies. Given that SKYCITY is the sole source of funds for the donations made by the community trusts, it is not unreasonable to link the reduction in community trust funding to SKYCITY’s own finances.
• There is some debate as to whether SKYCITY specifically asked the government for financial assistance for the convention centre once it became clear that it would be more costly than anticipated, but it undoubtedly asked for assistance, and there was a good deal of public speculation about the form any assistance might take. It was obvious that government funding would be required if the convention centre was to proceed as planned, and that the sum involved was of the order of $100m. In context, it is simplistic to say that SKYCITY had not asked for taxpayer money, even if it was eventually prepared to accept another solution.
• The number of grants made and declined by the SKYCITY Auckland Community Trust is accurately reported, though not in the same article. While this has the potential to be misleading or to imply a major reduction in donations, there is sufficient information about the amount paid out in donations to make it clear that although fewer applications were accepted, the amount of each individual donation must have been greater.
• SKYCITY was not given an opportunity to comment on Mr Gousmett’s remarks, which it considers inaccurate. However the remarks were not presented as fact but as Mr Gousmett’s opinion and were balanced by the remarks in the immediately preceding paragraph from the chairman of the SKYCITY Auckland Community Trust.
• As noted above, the nature of the financial relationship between SKYCITY and its community trusts is such as to justify an evaluation of the donations made by the trusts in the context of SKYCITY’s overall finances, including the financial position of its chief executive. There is no suggestion of inaccuracy in the information printed in the caption to the photograph of Mr Morrison, and as it is publicly available information there is no question of a breach of privacy. The juxtaposition of the two photographs simply repeats in a graphic form the general tone of the two articles – comparing the large scale of SKYCITY’s finances and operations with the decline in charitable funding and the small scale of the applications that make up many of the requests for funding.
• A copy of the standard letter declining a grant has been supplied. While it states that the application, along with many others that complied with the Trust’s criteria, has been declined, and explains that there were insufficient funds to cover all applications, it does not give any opinion on the merits of the application or suggest ways in which the chances of success could be improved. In particular it does not say, as suggested elsewhere by SKYCITY, that there is a focus on sectors other than the arts sector. There is no reason to doubt that a letter was sent to the NZ Secondary Schools Choir, in accordance with the usual practice, but if it was the standard letter as supplied to the Press Council, then it is understandable that the recipient did not regard it as feedback.

23. The Principles applied by the Press Council recognise the right of a publication to adopt a forthright stance or to advocate on any issue. In general, the Press Council finds that the articles were part of a campaign of advocacy and while the Sunday Star-Times did adopt a forthright stance and used vigorous language in its advocacy, it did not overstep the boundary into unfairness or inaccuracy. The complaint is not upheld.

Press Council members considering the complaint were Sir John Hansen, Tim Beaglehole, Liz Brown, Chris Darlow, Peter Fa’afiu, Jenny Farrell, Sandy Gill, John Roughan, Vernon Small and Mark Stevens.