If there’s one thing to take out of Ben Hills’ new page-turner on what wrecked Fairfax, it’s that there’s plenty of blame to go around. Hills fingers a conga line of incompetent, greedy and vain directors and executives, who each had their part to play in wrecking what Hills, and many others, considers to be one of the true jewels of Australian democracy.
Hills worked at Fairfax for close to 50 years, leaving as a member of staff in 2000 (without a redundancy, he somewhat ruefully revealed to Crikey this morning), but he continues to freelance for the company. He says the public is owed an explanation of what went wrong. “The internet has had a huge impact. But Fairfax has a particular responsibility for having handled it so badly. Since the receivership [in 1987], there have been 40 or 50 directors, and none of them have had any media experience. They were really ideally placed in the late ’90s to hop onto internet bandwagon. They could have bought into SEEK, REA, Carsales — just as Lachlan Murdoch and James Packer did. The were caught flat-footed, beaten, and are paying the price.”
Stop the Presses: How Greed, Incompetence (and the internet) wrecked Fairfax is out tomorrow, following other books about Fairfax like Pamela Williams’ Walkley-wining Killing Fairfax and Colleen Ryan’s Fairfax: The Rise and Fall. Stop The Presses is, at heart, a story of Fairfax’s board over several decades, and how it got it so wrong.
The ‘privilege’ of meeting Fred Hilmer. Management guru Fred Hilmer led the company from 1997 to 2005, and it was during this time that Fairfax had the opportunity to buy the internet upstarts that would go on to eat its lunch, but instead it passed on the acquisitions. Here’s Greg Roebuck (who founded Carsales.com.au) speaking to Hills on early talks with Fairfax:
“[Fairfax commercial director Alan Revell’s attitude was] we were just a little upstart; who were we to be playing with classifieds? But they might be able to arrange a conversation with Fred Hilmer — it would be such a privilege for me to have a conversation with [him]. I should be so lucky. It was ‘We’re Fairfax. We’re the big guys’. They left the meeting and we sat around the board table and said, ‘These guys aren’t going to be looking out for our best interests. They are going to slow us down. They were going to make poor decisions’.”
John Fairfax the poet, Walker the deal-maker. John Fairfax sold out of the company twice, the first time when his relative Warwick Fairfax tried to wrest control of the company in 1987, and more recently, when he lost the boardroom battle with Roger Corbett on who should be made chairman. Before he sparred with Corbett, Fairfax had a rather tumultuous relationship with former chairman Ron Walker, and penned poems on the defects of his chairman. One poem, called Man Is A Lion, had a line that described Walker as “ginger-haired [and] arrogant”. Readers are told this was the “most flattering” line, so we can only imagine the rest.
Both John Fairfax and Walker gave extensive interviews to Hills, meaning both sides are well-covered in the volume. The antagonism between them led to a divided and dysfunctional board until they both left it.
Part of John Fairfax’s problem with Walker, Fairfax told Hills, was that Walker insisted on personally negotiating many of the deals the media company was involved in, a job usually left to the executive. That included the deals for Fairfax Media’s new headquarters in Melbourne and Sydney, which would lease out entire floors a few years later as the company shed staff.
Walker, an unnamed former Fairfax radio executive says, was also behind Fairfax Media’s decision to buy Southern Cross’s radio assets, which included 2UE in Sydney and 3AW in Melbourne. The company paid a hefty price for the stations, which it believed would be useful cross-promotion with its print assets. But star presenters like Neil Mitchell and Steve Price preferred to interview conservative columnists from News Corp over stablemates from Fairfax. In 2011, CEO Greg Hywood said Fairfax was considering selling the network.
Would Murdoch buy the Fairfax papers? Lachlan says no. Former Fairfax chairman Ron Walker doesn’t think Fairfax will survive much longer, and that the assets are likely to be broken up and sold off. Hills puts this to Lachlan Murdoch, the young scion of the Murdoch dynasty, and asks him whether News Corp would be interested in buying the papers? Lachlan says no.
“We might be interested in the Fin Review, [but] what people fail to realise is that if you are sitting in New York there’s lots of good investments in Europe and America and China. Australia is a long way away and not necessarily a good investment for your shareholders. So would we be interested in some of the Fairfax assets? Maybe emotionally, but I doubt it.”
McCarthy says he was given 15 minutes to leave the building. Former CEO Brian McCarthy had helped John Fairfax build Rural Press into a regional behemoth until it was bought by Fairfax in 2007. That led to him eventually being made CEO, but he lost his board support when John Fairfax sold out of the company and left the board. His sacking to make way for Hywood was, as he describes it, brutal. After a bombed presentation to investors, Fairfax chairman Roger Corbett called McCarthy to his office and gave him the choice of two press releases. One said McCarthy had been sacked, the other that he resigned. McCarthy says he chose to resign, and was given 15 minutes to leave the building. Corbett denies this, saying it was McCarthy’s choice to leave immediately. McCarthy went to The Oakes for a drink with friends rather than home in a bid to avoid the paparazzi, who had snapped his predecessor’s humiliating exit.
Rinehart won’t sign the charter? Neither did Conrad Black. When Gina Rinehart sought a seat on Fairfax’s board after buying up nearly 20% of the company, she was rebuffed by the board, supposedly for refusing to sign the charter of editorial independence. But Hills reveals this charter wasn’t signed by plenty of board members, including former directors and one chairman.
Here’s John Singleton on the charter: “It was one of those things no one understood.” And here’s Canadian media baron (and convicted felon) Conrad Black, at one time Fairfax’s largest shareholder: “I can’t remember if we signed it, and I think such things are piffle … The proprietor can always do what he wants, as Murdoch has demonstrated …” As for Ron Walker, he says he refused to sign it. “I said: ‘My word is my bond, and we are not going to interfere with you’, and we never did,” he said.
How Rinehart responds to press requests. Speaking of Rinehart, here’s how her representatives responded to Hills’ request for an interview:
“Hancock Prospecting receives many requests for interviews each week from serious journalists such as yourself, and other major news organisations such as CNN and the BBC. If interviews were granted, a significant part of each working week would be spent on such. Consequently requests for interviews are almost always declined.”
Rinehart wasn’t the only one who rebuffed Hill’s requests for comment. Roger Corbett, Hills reveals, absolutely refused to be quoted on the record, agreeing only to a brief interview with Hywood present after repeated requests. Hywood gave Hills 20 minutes.
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