Witness to the fall
EVEN FOR A FAIRFAX INSIDER SUCH AS COLLEEN RYAN, WRITING A BOOK ON THE COMPANY’S DECLINE HAD SOME UNEXPECTED TWISTS.
After almost 40 years working for Fairfax Media, award-winning journalist Colleen Ryan felt impelled to find out why Australia’s oldest existing newspaper company was facing such an uncertain future. Editor of Fairfax’s The Australian Financial
Review from1998 to 2002, Ryan had co-written an earlier book about the company, Corporate
Cannibals: The Taking of Fairfax, in 1992, and had been musing about a second hit. When mining magnate Gina Rinehart bought into the company in 2010 and sought seats on the board, that clinched it. So 12 months ago she stopped writing for
The AFR, gave up her rented flat in Sydney and settled down at her house in the hills behind Byron Bay, overlooking four hectares of land with more than 9000 rainforest trees planted by her husband, journalist Steve Wyatt, on what was once a dairy farm.
“I was ready to move on,” says Ryan, who although saddened by the company’s situation has no regrets about her departure. “I knew that if I wrote the Fairfax book I couldn’t expect to go back there. And I couldn’t be independent if I thought in the back of my mind these people are paying my salary. You can’t [be on staff and] write a truly objective analysis of the company.”
She hadn’t intended going quite as far back as 1841, when John Fairfax bought The Sydney
Herald, but found it necessary to grasp how the company had become so vulnerable today. It’s a story full of colourful characters, family ructions, political manipulation and plenty of judgments clouded by emotion – which, as Ryan points out, is rarely good for strategy. Although she was familiar with much of the history, there were surprises.
“There were incidents that I’d known had taken place, but I hadn’t known the level of vitriol behind them. I didn’t understand at the time when certain turning points [occurred]. It’s only when you put it all together that you can see the chess game.”
When it comes to the company’s journalism, Ryan says the death of former NSW premier Robert Askin in 1981 had a profound effect on how then chairman James Fairfax steered the company. At first, the board was angry that
The National Times published a story, just before Askin’s funeral, which alleged he had links with organised crime. However, James then sent a directive to editors encouraging them to pursue investigative journalism. In doing so, they created powerful enemies. “What contributed to the demise of The
National Times in 1986, for example, was its decisionto focus on friends of prime ministers, premiers and treasurers,” Ryan says. “That included coverage of the business activities of property developer Warren Anderson, a friend of Paul Keating, of Sir Peter Abeles, a close friend of Bob Hawke, and later of [HighCourt judge] Lionel Murphy, that greatly loved figure of the Labor Party who was alleged to have perverted the cause of justice.”
Until she’d spoken to a number of people, Ryan hadn’t appreciated the role of Abeles – a close friend of Sir Warwick and Lady Mary Fairfax – in attempts to tame the Fairfax press. After a 1982 story ran in The National Times – headlined “Sir Peter Abeles and TNT’s brush with theMafia” – Abeles used his influence to put pressure on the board to close the paper. He also encouraged and supported the young Warwick in his doomed takeover bid.
Several stories are hilarious in hindsight. Former Fairfax editorial manager Max Suich told Ryan that Greg Gardiner, then general manager, had come to him once, shocked by a tirade from Keating about a story in The
Sydney Morning Herald. Suich advised telling Keating to ring him, but Gardiner had already tried that. Keating had said: “Talking to Suich is like pissing down your own pant leg.”
Kerry Packer has provided good colour, too. “[In 1991,] he was trying to set up the Tourang consortium [to buy Fairfax, which was then in receivership],” Ryan says. “The way he brought it all together and the sense of fun and the way he lorded it over the meetings from his Savoy Hotel suite in London, between Wimbledon, the cricket and the casinos, was wonderful.
“And how the media moguls would clash. Every time Packer or Kerry Stokes got close to taking a big slab of Fairfax, Rupert Murdoch would appear and tap the table and say: ‘Don’t forget me, guys.’ Then he’d move in and acquire a blocking stake. One time he bought 7.5 per cent of Fairfax at a tremendous premiumto themarket price, effectively setting a full price on the rest of Fairfax that nobody else could afford.”
But it was the mistakes made in the transition to a digital business and the failure to diversify that brought Fairfax to its knees. The major revenue stream had been classified advertising – for jobs, residential property and cars. Most of that revenue has moved online and Fairfax has lost market leadership for all of those categories. “It has almost destroyed its revenue base. In the process, its shares have fallen to less than 10 per cent of their peak of more than $6.
“There were so many people at fault, but one of the problems was that it was an organisation that had been incredibly successful and people who had been there for a very long time were protecting their patch, whether they were print journalists or print advertising executives.”
Uncovering the details of those boardroom battles was one of the most interesting parts of Ryan’s research. Rinehart refused to talk to her. Fred Hilmer, Fairfax chief executive from 1998 to 2005, agreed, but was never available. Others finally came round. “It’s fascinating to hear the same story told from the perspective of dozens of different people,” Ryan says.
The Fairfax family intrigues were riveting. The half-brothers James and Warwick Fairfax are now on amicable terms, despite Warwick having lost the family jewels in his ill-fated attempt to privatise the company in 1987. “James sees Warwick’s mother, Mary, but has never once raised the business of the [failed] takeover,” Ryan says. “He has wrestled over the years with the issue of who was responsible for young Warwick ambushing the family and he’s come to the conclusion that it was Mary’s influence that brought about Warwick’s decision.”
Ryan says that after John B. Fairfax joined the board in 2007 to re-establish the family’s link with the company and to help revive it, then chairman Ron Walker told him: “We’ve made you a billionaire. Why are you trying to meddle?” But John wasn’t interested in the money, Ryan says. “He wanted Fairfax to be a great news organisation again.”
Writing the book proved cathartic for Ryan, and she hopes it helps people understand the fall of a once great company.
With Wyatt, she has already moved on to her next book, Sell Up, Pack Up and Piss Off, due out next year. It looks at baby boomers who have enjoyed far too good a time, can’t afford to retire here and are looking to Asia or Europe, as well as people simply looking for a better life overseas.