Pointing out the Fairfax mogul stooges
By Stephen Mayne
January 14, 2008
This was published in Crikey after the John Fairfax AGM on October 27, 2000.
We got to the Fairfax AGM at about 11.45am after dusting up the Packers down the road at PBL and thanks to crazy Jack Tilburn had not missed much.
I threw in a couple of opening offerings about the losses in F2 and all the editorial dramas at The Sydney Morning Herald that saw editor Paul McGeogh shunted off to New York last week.
Chairman Brian Powers put in a good overall performance at the meeting and simply said that F2 was performing well and it was good that McGeogh had stayed within the group.
The real action started with the director elections and the first one up was that long term merchant banking friend of Rupert Murdoch's in Mark Burrows.
I gave an introductory spiel complaining that Fairfax did not need three merchant bankers on the board given it was a boring operational company. It also needed to be independent from the forces of Murdoch and Packer given their power and propensity to abuse their editorial power for their own commercial ends.
I then repeated what Rupert Murdoch told me after last year's News Corp AGM when he said that "all the Fairfax directors are Packer stooges".
The only problem with this was that Burrows is an old Murdoch associate.
When asked to describe his current relationship with Rupert, Burrows said they were still friends but then emphasised he had not worked for him since securing News Corp as a shareholder in the Seven network back in 1993.
We then had long time Packer adviser David Gonski up for re-election and I repeated the arguments whilst throwing in the additional concern about the three cross-directorships with Frank Lowy's Westfield Holdings.
Gonski conceded that he is still advising Packer on deals but his defence was that he's worked for every media mogul over the past 20 years.
Brian Powers defended the Westfield connection by claiming that the Fairfax papers had led the coverage against the shopping centre giant over the bogus newsletters that were delivered to residents around a rival developer's proposed shopping centre at the old Arnotts biscuit factory in Sydney.
The SMH did lead the coverage but then they dropped off what should have been one of the biggest scandals of this year. I also pointed out that Fairfax had not covered the issue of Westfield's outrageous censorship of my platform which should have gone out to their shareholders in the notice of meeting for next week's AGM.
Then we had the re-election of Powers himself and the Californian claimed his relationship with Packer was cordial but not at all close and that the loan Packer guaranteed for Powers was now irrelevent because Powers' equity in Fairfax was worth four or five times the guarantee.
About 15 shareholders came up to me after the meeting and said the questions were good and they learnt a lot. Even company secretary Gail Hambly said so and she was the woman who wrote to me rejecting my nomination for the Fairfax board because Paula had only bought her shares on the day we wrote to them.
The avuncular Dean Wills popped over for his usual chat and defended all the connections saying that Sydney is a small town and everyone knows each other. He said that he went to the LA Olympics in 1984 as a guest of Rupert and Anna Murdoch. Yes Dean, but there is a big difference between knowing someone socially and getting paid millions of dollars to advice them on media deals which is exactly what Gonski and Burrows have done.
If the Fairfax commentators were at all independent from management, they would have discussed this issue at some point over the years.
I've heard several Fairfax journalists comment that Packer and Murdoch have each got their man strategically placed inside the Fairfax boardroom for when the newspaper group inevitably comes into play.
If the staff had any spine they would agitate for change because everyone knows it is plain wrong. Even if the boys don't breach confidences it is a terrible perception.
Brian Powers has said at the previous two AGMs that Fairfax was looking for a second Melbourne-based director and ideally someone with newspaper experience. If they have not done this by next year's AGM then Crikey will happily stand and this time we'll get the paperwork right.
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