Did George Calombaris get a raw deal from the media over underpayments?

Last week both Coles and Target joined a long line of major companies in the past 12 months to have offered a mea culpa for underpaying their staff.

The story generated headlines for about three days before fading from the news cycle.

Watching and shaking his head might have been George Calombaris, the former MasterChef judge whose MAdE chain of restaurants shut up shop this month.

George Calombaris

Calombaris, of course, endured his own underpayment scandal in 2019, and it generated more headlines than most.

In fact, for the fortnight after the news became public, MAdE’s underpayments generated more media than any other underpayment scandal last year, and seems likely to stay ahead of these new indiscretions.

The cavalcade of poor publicity had a devastating effect on the business. Administrators KordaMentha told The Age patronage at MAdE restaurants fell 50 per cent after the underpayment scandal.

So was Calombaris hard done by?

Certainly there seems to be little, if any, link between the amount of money withheld from staff and the amount of media coverage generated.

By far the biggest underpayment in recent times was from Woolworths, which admitted to a $300 million error. And yet, that generated less media than supermarket rival Coles announcing it had erred by $20 million.

It is hard to pinpoint why this is. The vagaries of the news cycle - how much competing news there was - probably played a part. Coles’ announcement came with the release of their half-year results, and also earned a stern rebuke from Attorney-General Christian Porter, who flagged new laws to deal with the worst infringements. Both of these things likely stimulated more coverage.

It didn’t help Coles’ cause, either, that former Wesfarmers stablemate Target made a similar announcement the following day. This meant the Coles brand got sucked into those stories too, as media reported the trend.

For his part, Calombaris’ transgression was “only” $8 million, about 3 per cent of Woolworths’. And yet he generated more media.

There were a few factors at play, here.

Firstly, Calombaris was a repeat offender, having first apologised to staff in 2017.

Secondly, his celebrity factor magnified the attention beyond the business pages. A mistake in the payroll department of a large corporate office is not a particularly sexy yarn. But George Calombaris - that nice chap from the telly - personally underpaying his own staff is a different proposition. It feels more direct, more human. And the visuals are a lot more appealing to a TV producer or homepage editor.

The biggest problem for Calombaris, though, appears to have been one of timing.

His latest underpayment scandal came just days before the announcement that the MasterChef judges were leaving Channel 10. Just as the media was losing interest in his story, along came a bombardment of further publicity, almost all of which mentioned his recent transgression.

Then Calombaris, who had been noticeably absent from the media to that point, decided to front 7.30 almost two weeks after the initial news. It led to a third spike in coverage. Combined, the effect seems to have been fatal to his business. If nothing else, it’s a cautionary tale of the double-edged sword of trading off your celebrity.

Meanwhile, comms staff whose companies have their own bad news to announce might want to consider what they can learn from those who’ve come before them. Those who don’t learn from history are destined to repeat it.

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