McGowan set to get director spot on Stokes-backed media giant

Former WA premier Mark McGowan is tipped to be appointed to the board of media behemoth Southern Cross Media Group, following a merger with Kerry Stokes' Seven West Media.

Mr McGowan stepped down from public office in 2023 citing exhaustion after steering the state through the COVID pandemic.

He was a sometime political ally of billionaire Kerry Stokes, who controls a 23 per cent stake in Southern Cross, which is chaired by his son Ryan.

If successful, Mr McGowan will join a handful of political leaders who have accepted board seats on listed media companies, including former Victorian premier Jeff Kennett, who was previously a director of Seven West Media, and former prime minister Tony Abbott, who joined the board of the Murdochs' Fox Corporation in the US.

The ABC understands former senior Google and Twitter executive Karen Stocks is also in line to be appointed, subject to background checks on both candidates, which are being conducted by board search firm Hattonneale.

If successful both would still face election at the upcoming annual general meeting of Southern Cross, likely to be held in November.

The base rate for non-executive directors was $135,000 per year in 2025-2026.

Mr McGowan and Southern Cross did not respond to questions, but it is understood announcement of the board appointments was planned for later this week.

Southern Cross, which also owns The West Australian newspaper and the Triple M and Hit commercial radio networks, is expanding its board in line with a charter adopted after it acquired Seven West Media for $385 million in shares, effective from January this year.

Kerry Stokes conglomerate Seven Group Holdings emerged with a 20 per cent minority stake in Southern Cross, which it lifted to 23 per cent via another Stokes' affiliated entity after six months as is allowed under the so-called creep provisions in the corporate takeover laws.

"Kerry Stokes is a master of the creep provision," said one finance industry source, pointing to his previous takeovers of Seven and The West Australian.

Earlier this month, after non-executive chair Teresa Dyson stepped down, Ryan Stokes took over the chairmanship, cementing his family's control of the merged entity.

Ex-ministers exert level of influence above ordinary people

The Centre for Public Integrity chair Anthony Whealy KC said the appointment could raise integrity concerns, given Mr McGowan's strong former connection to the WA government.

"Clearly with Mr McGowan there's been a number of years since he was the premier, but nevertheless, there remains a concern because he was such an influential politician and so powerful and so important within the state of Western Australia that his position with the Stokes company [Southern Cross] gives him a particular connection to the Western Australian government and a particular way of influence that other people would not have," Mr Whealy said.

"Of course, we don't wish him any ill will, we don't wish him to have a life bereft of commercial enterprise, but nevertheless there is that impression created and that's where the danger to integrity lies."

Premier and media mogul's texts seen during trial

Mr McGowan's relationship with Kerry Stokes was examined during his 2022 defamation battle with coal billionaire Clive Palmer, which surfaced a series of text exchanges between the then-premier and the mining and media mogul.

The Federal Court heard Mr McGowan sent Mr Stokes a text message in August 2020 flagging the introduction of legislation that would prevent Mr Palmer pursuing commercial arbitration damages against the state for up to $30 billion over a historical mine tenement agreement, and promising to "call to discuss".

"Mark, well done. I think no-one else could have achieved the legislation in the speed you did," Mr Stokes wrote back after the bill had been pushed through.

The exchange followed a series of front-page articles in Mr Stokes's state daily metro masthead, The West Australian, which depicted Mr Palmer variously as a cockroach and a cane toad, which were not the subject of the defamation claim.

Mr McGowan replied to Mr Stokes:

"Thanks Kerry I was asked about those marvellous front pages today, and I said, 'I think The West has gone a bit soft'. I appreciate the support enormously."

The court ultimately found Mr Palmer and Mr McGowan had defamed each other, with Mr Palmer awarded $5,000 and Mr McGowan $20,000 in damages.

After that decision was handed down, Mr McGowan was asked about his relationship with Mr Stokes and the text exchange.

Mr McGowan said he rarely contacted Mr Stokes and had contact with many businesspeople in his capacity as the minister for state development.

"I'm the treasurer, I was the minister for state development, and I'm the premier, so you could go through virtually every major company and every major investor in Western Australia, at some level, I've had contact with them," he told The Sydney Morning Herald in 2022.

"I find [Mr Stokes] to be an engaging and interesting person and a committed West Australian who has done a great many good things for the state."

McGowan granted Stokes-backed firm export deal

In 2020, shortly after exchanging the Palmer texts, Mr McGowan also announced a lucrative exemption for a gas development, backed by Mr Stokes, to rules banning onshore producers from exporting their product.

Under the change, the Waitsia project would be allowed to export up to 50 per cent of its gas production over a fixed period.

At the same time, the government tightened supply rules for other onshore producers, preventing them from selling their product to the east coast.

Waitsia, a joint venture with Stokes-linked Beach Energy and Japanese trading and infrastructure firm Mitsui, was touted by Mr MrGowan as a "shovel-ready" project that would create 200 jobs amid concerns about boosting economic activity in the state during the COVID-19 pandemic.

However, it has since faced delays, achieving its first gas production late last year.

The changes to the state's gas policy attracted criticism at the time from peak body Australian Energy Producers (formerly APPEA), which complained about a lack of consultation, while former Liberal premier Colin Barnett described the Waitsia deal as "unprecedented" special treatment.

Ryan Stokes is currently a director of Beach Energy, while Seven Group Holdings has been a substantial shareholder.

When the exemption was announced, Beach Energy's shares rose, prompting questions at the time about whether Mr McGowan met with Ryan or Kerry Stokes about the deal.

While initially declining to comment, in 2022 amid renewed scrutiny of the deal during a projected domestic gas shortfall, Mr McGowan said he did not recall any meeting in the lead-up to the announcement.

"No, to the best of my recollection, no," he told WA Today.

"You're talking about issues of a few years ago. We got a major project up that's giving us 50 per cent of the gas from it and hundreds of jobs and security in the gas supply."

He has also since defended the decision.

"It's all well and good now to … look back on it and say, 'You shouldn't have done this or that'. That's the situation that we were confronting as a state, and we saw was happening in Victoria and New York and Italy and Iran and Britain," he said.

"Millions of people dying, literally, in advanced Western countries, economies crashing, a world in chaos, and so we did what we had to do on the circumstances, and we got a major project that gives us 50 per cent gas, not 15 per cent gas [reservation policy that applies to offshore gas]."

Mr McGowan achieved wild popularity in Western Australia and oversaw a landslide win during his government's re-election in 2021, taking majority control of both houses and securing 53 of the Lower House's 59 seats.

Since leaving office he has also reportedly taken up a role with former federal treasurer Joe Hockey's consultancy firm, Bondi Partners, and consultancies with mining companies Mineral Resources and BHP.

He was reported to have parted ways with Mineral Resources earlier this year.