Beyond The Front Page - History By Deadline

Sydney Morning Herald

Saturday April 8, 2006

Gavin Souter. Gavin Souter is a former Herald journalist and author of several history book.

From hot metal to cold, and the internet, the Herald has had plenty of challenges. Gavin Souter writes.

MOVING from its centenary in 1931 and its sesquicentenary in 1981, The Sydney Morning Herald's next anniversary will be ... what? According to Google, this is called a septaquintaquinquecentenary (7x5x5=175). And good Latin or not, such a mouthful probably suits the complexity of recent Fairfax history better than any shorter word from simpler times.

Until not so long ago the Herald was an exemplary broadsheet of its kind: a sedate paper of record, slow to change, dynastically controlled, and thick with advertising revenue. It was also (and still is) Australia's oldest newspaper - much older than the nation itself, and not much younger than the colonial town after which it was named.

Founded on April 18, 1831, by three young immigrants - Alfred Stephens, Frederick Stokes and William McGarvie - it started life as The Sydney Herald, a sevenpenny weekly printed by hand on a Columbian press, circulation 750. Ten years later the sole remaining owner, Stokes, sold the paper to two more recent arrivals - Charles Kemp, who was by then the Herald's first parliamentary reporter, and John Fairfax, formerly a printer and publisher at Leamington Priors, Warwickshire. By that time, the Herald had become a daily and in 1842 the new owners lengthened its masthead accordingly.

Thus began the Fairfax family's ownership of The Sydney Morning Herald for five generations. In 1847 the paper dropped one of two mottoes inherited from The Sydney Herald: "In moderation placing all my glory/ While Tories call me Whig, and Whigs a Tory." The other motto ("Sworn to no master, of no Sect am I") disappeared in 1854, the year in which the Reverend John West - co-founder of The Launceston Examiner and an early campaigner for Australian federation - was appointed the Herald's first official editor.

By any reckoning Fairfax and West were Tories, and as for religion, both belonged to the Congregational Church. Editorially, though, their paper lived up to Alexander Pope's mottoes better than The Sydney Herald had done. It avoided earlier anti-Catholicism and was committed to the ideal of free, secular and compulsory education.

In most respects, however, it was staunchly conservative. For instance, it advocated a NSW upper house nominated by the Crown rather than the "democratic violence and impetuosity" of an elected chamber.

As one of the Herald's competitors observed at the time:

"Dear lachrymose old Granny fails to see

A mob-cap is a cap of liberty."

This was the first known use of a nickname to which the Herald's competitors and critics resorted with increasing frequency during the 19th century, and which readers adopted either affectionately or with exasperation. To liberals and radicals, Granny Herald displayed the fussiness and selfishness that often accompanied old age. But to those of her own persuasion her upholding of Protestant Christianity, British monarchy, middle-class values and free enterprise capitalism provided the comforting reassurance of a wise old grandmother.

Granny was a useful "brand" for many decades, but in the second half of the 20th century, perceived as commercially counterproductive, it was successfully jettisoned in favour of "Herald" alone or "SMH".

In 1853, John Fairfax bought out Kemp's half-interest in the Herald and took into partnership his first son, Charles Fairfax. Three years later they were joined by John's second son, James Reading Fairfax, on a 50-25-25 per cent basis. The Herald's imprint changed to John Fairfax & Sons, and the business became a family partnership. Also in 1856 John Fairfax & Sons moved from lower George Street to a new three-storey building bounded by Hunter, Pitt and O'Connell streets, a site which the Herald would occupy in one building or another for almost a century.

By 1856 the Herald's circulation had reached 6600, a figure which, minuscule though it seems today, was half as large again as the combined circulations of all other Sydney papers. Within the British Empire it was third only to those of London's Times and Telegraph.

Charles Fairfax, who had been shaping up well as an eventual senior partner, was killed in a horseriding accident in 1863. James (later Sir James) became senior partner after his father's death in 1877, and two of James's sons - James Oswald ("Mr J.O." and later another Sir James) and Geoffrey Evan ("Mr Geoffrey") - were partners and, after the partnership became a limited company in 1916, directors. Although from 1878 onward the family business employed general managers, appointed from within the office or industry, Sir James and Mr Geoffrey also exercised some executive power until their deaths near the close of the Herald's first century.

And so to the paper's first major anniversary. As one of the company's commemorative gestures on that occasion it published A Century of Journalism: The Sydney Morning Herald and Its Record of Australian Life 1831-1931. This was a work of 805 pages researched and compiled in two years by Herald journalists Percy S. Allen and S. Elliott Napier, and edited by Sir James O.Fairfax's only child, Warwick Oswald Fairfax, who at the age of 29 had recently been appointed chairman of directors and managing director of John Fairfax & Sons Ltd.

The Herald's view of itself was understandably less than modest. "To win a nation's faith," concluded A Century of Journalism, "and a prestige ranking with the highest in British journalism, there must be a policy framed, and applied with patient care, of unremitting service to the public. A paper that a people trusts as a faithful vehicle of news, a fearless and conscientious mentor, and an honest and effective exchange and mart, must deserve that trust or perish. That the Herald, far from perishing, celebrates its centenary as the leader of the entire Australian press in circulation, in advertising and in prestige, is gratefully accepted as testimony that the public, through these hundred years, have enshrined it in their hearts as a worthy trustee."

By then, the Herald corner at Hunter Street had been redeveloped as a 12-level "modern classic" building, officially opened in July 1929. Six nights a week, after the editorial, composing and printing staffs had put the first edition to bed at midnight, the building would pulsate as its thundering basement press room churned out 200,000 copies of the next morning's Herald. That was an era of printer's ink, molten metal, linotype machines, copy paper, fountain pens, a few upright typewriters, and "staff correspondents" respectably clad in suits, white shirts, ties and felt hats. Women journalists were to be found almost exclusively in the Women's Section, also referred to as Social. That gender imbalance, and the virtual absence of bylines, would not change until the 1950s.

The company's successful management during and beyond the 1930s was firmly in the hands of the general manager (Rupert Henderson, a formidably aloof former journalist who was usually more than a match for his only real business rival, Frank Packer of Consolidated Press), and of the news editor (Angus McLachlan, another journalist-turned-executive, who wielded more editorial power than the official editor, Hugh McClure-Smith, and later succeeded Henderson as general manager in 1949 and managing director in 1964). One indelible mark left on the Herald by McLachlan, in 1944, was the long overdue conversion of its front page to news rather than the "exchange and mart" of advertising which had monopolised it ever since 1831.

There was some tension between the exclusively Fairfax directors and their managers. The scholarly chairman, Warwick Fairfax, occasionally felt moved to write for his paper on subjects of significance to him, particularly moral issues and ethical standards. But usually he would be firmly put in his place by the general manager or managing director. In demarcation disputes between proprietors and management, Henderson rarely gave an inch.

In December 1955, the company sold its Hunter Street building (now the Radisson Plaza Hotel and Bistro-Fax), and moved its various publications to a new 14-level building at Broadway, essentially a factory with none of Hunter Street's architectural dignity. It would be there within 25 years, under the executive guidance of T.H. Farrell, the Herald and other publications discarded hot metal in favour of computerised production with visual display terminals, photocomposing and cold type.

Just as in the 1850s, the 1950s brought Fairfax not only new premises but an invigorating editor (John Pringle) and a new corporate structure. In 1956 John Fairfax Ltd was incorporated as a public company in order to solve liquidity problems created by commercial expansion. By then the company had established The Australian Financial Review (1951) and The Sun-Herald (1953); acquired Associated Newspapers Ltd, publisher of the afternoon Sun and various magazines (1953 and 1956); and entered Australia's new television industry with ATN7 (1955). No wonder it needed more liquidity.

The Fairfax family still held a majority (53 per cent) of the public company's shares. Initially the board comprised only Sir Warwick, as he would later become, his cousin Sir Vincent Fairfax, and Rupert Henderson. But Sir Warwick's son by his first wife, another James Oswald Fairfax, became a director in 1957, and one of Sir Vincent's sons, John Brehmer Fairfax, did the same in 1979.

Also during the 1970s two more non-family directors (Arthur Lissenden, from the newsprint industry, and Sir David Griffin, a former lord mayor of Sydney) joined the board; and in 1977 James Fairfax succeeded his father as chairman. By that time Sir Warwick also had a son by his third wife, Lady (Mary) Fairfax. This was Warwick Geoffrey Oswald Fairfax, by then 17, of whom more anon.

Now to the Herald's sesquicentenary. This 150th anniversary was commemorated in 1981 by various means, including the publication of a corporate history of the Herald and other activities of the Fairfax group. As commissioned author of that book, Company of Heralds, I was given a generous deadline of three years and the help of the company's archivist, Eileen Dwyer, and a research assistant, Mary Vinter. Like Percy Allen and Elliott Napier of A Century of Journalism I was a Herald journalist, but unlike them, to my great satisfaction, I had full access to all company records.

In his preface to the resulting book, the chairman, J.O. Fairfax, wrote: "There is not a document in our company minutes, files and archives that has not been accessible to [the author]. By arrangement with him, and with the agreement of our board, I read the manuscript as it progressed. I suggested a number of alterations, some of which were adopted by the author, and some of which were not. But the final decision on the inclusion or exclusion of any material has been his alone." Two successive general managers (R.P. Falkingham and G.J. Gardiner) also read parts of the manuscript in the same way.

FINALLY, one more commemoration - the 1991 sesquicentenary of the Fairfax family proprietorship, dating from the purchase of The Sydney Morning Herald by Kemp and Fairfax. This brings us to the labyrinthine recent past, so let me abbreviate, for the convolution of that time is more than most readers would wish to follow. It concerns the disastrous privatisation of John Fairfax Ltd by W.G.O. Fairfax, the company's consequent receivership, its refinancing and the numerous ins and outs of ownership and management ever since.

Warwick jnr's takeover and its immediate aftermath have been the subject of three books: V.J. Carroll's The Man Who Couldn't Wait, my own Heralds and Angels, and Trevor Sykes's Operation Dynasty. To Carroll - the former managing editor of Fairfax's very successful Australian Financial Review, and from 1980 editor-in-chief of the Herald, after David Bowman - Warwick was a self-perceived crusader "coming home to save the company, in particular The Sydney Morning Herald, from a board of directors and senior managers who had helped make it one of the most desirable newspaper companies in the world. He was returning to recapture the Holy Land from the Turks."

I had been commissioned by the Turks, initially to record the corporate decade between the sesquicentenaries of the Herald and the Fairfax proprietorship. In that period the company had come in for some criticism, particularly about its unsuccessful takeover struggle with Rupert Murdoch for the Melbourne-based company Herald and Weekly Times. Generally, though, its track record had been a creditable one of survival, growth and acquisition. One of its trophies was David Syme & Co, publisher of Australia's second oldest newspaper, The Age, in Melbourne.

During the second half of 1987 the extent and nature of my proposed subject suddenly changed. On August 31 the 26-year-old Warwick jnr, a graduate of Harvard's School of Business Administration and a committed Christian, announced his bid to privatise John Fairfax Ltd. From then on almost everything that could go wrong for him did go wrong.

His plan assumed that other branches of the Fairfax family would not need to be bought out, but would remain as minority shareholders, and that his takeover vehicle (Tryart, driven by Laurie Connell for a fee of $100 million) would be able to repay its bank funding of $1.7 billion by selling off some of the captured assets. Both assumptions proved wrong.

The family shareholders sold, and the world stockmarket crashed just at the wrong time for Warwick. He persisted nevertheless, gaining control of the company at enormous cost in bank debt. He also fell out with Connell and had to enlist new advisers to find such sources of finance as Michael Milken's junk bonds in Los Angeles.

Shortly before the physical arrival of the new management (led by M.J. Dougherty, and characterised by the departing chief editorial executive, Max Suich, as "visigoths"), the old company had negotiated a contract for me with the publisher of my earlier book, Peter Ryan of Melbourne University Press. Like the first contract, it guaranteed access to all corporate records including board minutes. I was not sure how binding that would prove to be. But although Warwick and his mother declined to be interviewed, the new proprietor did not impede the co-operation which I continued to receive from Fairfax directors and management.

After one session with Suich's successor - another senior Fairfax executive and former editor, Chris Anderson - I found myself waiting for a lift beside the new proprietor. We entered the empty lift , and while going down 11 floors I presented my case for an interview. At ground level he left without having uttered a word. On another occasion, leaving the building in 1990 when the full dimensions of his disaster were apparent, he refused to answer questions from Herald reporters, saying only: "I really don't know how it will all pan out."

Looking back, it is not easy to recall how things did pan out. Five chief executive officers have come and gone since Tryart's takeover, and so have nine editors of the Herald.

After Tryart came Conrad Black's Tourang, led by a chief executive from South Africa, Stephen Mulholland, and by the future Lord Black's viceroy, Dan Colson.

It was during Tourang's time that the Fairfax board extended unprecedented independence to the company's editors and journalists, a latitude which soon became entrenched. Never before had Herald journalists been so literally "Sworn to no master".

When in 1995 the company moved from Broadway to the top of one of two towers at Darling Park, production of the Herald and other publications began at Chullora in a new $315 million plant made financially possible by the former Tourang regime's foresight. Between 1987 and 2005 the Herald's circulation fell from 257,225 to 244,348. A good part of the reason for this had been the internet's worldwide erosion of print media. Fairfax responded to this challenge by entering the digital media sector. Fairfax Digital became profitable in 2005, a year in which Fairfax bought the online dating service RSVP.

Another acquisition, in 2003, was Independent Newspapers Ltd, the publisher of nine daily newspapers and various magazines in New Zealand. As Fairfax New Zealand Ltd, that group is now New Zealand's largest media company, and performing well. Fairfax's latest annual report is as confident as any school of business administration could wish: record earnings per share, record net profits, and record revenues. According to the new chairman, Ronald Walker, "Fairfax is in excellent shape to go forward." Ruling out any return to the television sector, from which Fairfax withdrew in the 1980s, Walker has said the company prefers to expand on the internet.

In accordance with this aim, and the company's interest in New Zealand, Fairfax last month paid $625 million for that country's largest online auction site, Trade Me. What other changes new media ownership laws may bring to Fairfax after 2010 is anyone's guess.

As well as a new chairman, Fairfax has a new chief executive, David Kirk from New Zealand, and the Herald has a new editor, Alan Oakley. Renewal is in the air and so, as the paper begins another 25-year journey towards its bicentenary, "Many happy returns". Or rather, bearing the past two decades in mind, "Many happier returns". Things seem to be looking up, and for those who may commemorate in 2031, five syllables will certainly be easier to pronounce than 10.

© 2006 Sydney Morning Herald

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