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.

The Australian - The Deal - - Cover Story - Colleen Ryan’s Fair­fax: The Rise and Fall is pub­lished by Melbourne Univer­sity Press.

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.

BY LYN­DALL CRISP

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