‘What are you doing to us, Harold? We are $4 million short.’
Maybe I shouldn’t have picked up the phone that day. Didn’t know I was going to endure some blame transferral. Oh well, just another day in the world of well-paid television executives giving it to poor, hard-working people who work in the advertising side of things. It’s got to be the Nine Network’s David Leckie.
Still, I’d probably be swearing too if the next call I had to make was to Kerry Packer to explain why Nine was $4 million short in revenue for the latest sales period. For Nine, that meant someone hadn’t brought in enough ads, and the books didn’t look good. Even in the Packer empire at its self-confident prime in the 1980s, $4 million was a lot to be short by. The fact that this shortfall had nothing to do with me doesn’t mean much: Leckie just needed someone to unload on, and I was the poor bloke who took the call. Didn’t take a psychologist to work that one out.
David was in rare form. It’s no accident that Leckie ran Channel Nine so effectively for Kerry Packer for so long, helping to make it the ratings supernova it was for so many years. This is a man who could hold his own, a big man—six-foot-five, former rugby player—with a fearsome temper and a desire to get his own way. As I found out on the phone one day.
It started like this. Television people are always under pressure because they have to win the ratings, they have to make money, they have to get on with the viewers and give them what they want and finally, at the end of the line, they have to get on with the advertisers. Those, by the way, are the people who make the money for them, in case any TV executives might have temporarily misplaced that piece of information. So when the busy executive gets to the end of a very long and busy and tiring day they have to consider the position of the advertisers, which can be very hard for them.
In 2000 Nine was on top, and Leckie was an unbelievably good chief executive. But one day things went awry. They believed that we, the Mitchell Company, hadn’t spent the promised amount with the Nine Network, and they were $4 million short in revenue. And someone had to tell Kerry Packer. That wasn’t going to be a fun conversation. A good idea from his point of view would be to pay out on me.
I listened to the Leckie spray. On and on it went. For about thirty seconds I listened before I worked out what the hell he was trying to say. David and I get on very well. I like him, he likes me, but this was business. So I listened to this rant, full of the usual ‘F’ words, which are quite standard in the world of television. What he was saying was wrong, because he had been given the wrong information. He just wanted to vent steam on someone because he knew Kerry was going to yell at him. But I am never bullied by anyone, especially if I know I’m right.
As he drew breath, I knew there was an opportunity for me to speak. ‘David,’ I said evenly, ‘I have listened to what you’ve just said, and you are wrong. I think it’s a very bad thing that you are doing, and later when you reflect on it you will undoubtedly realize the same thing. Now you have spoken for thirty seconds and me now for some twenty seconds. Let me tell you the next noise that you’re going to hear is me hanging up the phone.’ Bang.
We never spoke of the matter again. And we remain the best of friends.
He might be huge and intimidating to some, but he’s a warm soul deep down. I’m five-foot-seven and getting shorter, I think. When I was growing up I wanted to be six feet because everyone seemed to be. You had to be six feet to play for Collingwood and five-foot-nine to be a policeman, and at one time I wanted to be both. In business I seemed to be surrounded by large people, some of them with big mouths. You learn to deal with all shapes and sizes, and move on.
That’s the funny thing about the media world. You can have a mini-meltdown—like David did—and it’s all forgotten the next day, or, in some cases the next week, or maybe never. I’ve been lucky. Most of my feuds have come and gone pretty quickly.
Except the one with the Ten Network. This one goes all the way back to the heady 1980s, when Frank Lowy bought the Ten Network from Rupert Murdoch for the eye-watering sum of $842 million. The Lowys weren’t experienced in the media, and it showed pretty quickly.
Frank Lowy appointed his young son Peter as Ten’s chief executive. Like his father, Peter was new to the business. Peter felt we weren’t sending enough business the way of the Ten Network. He believed we favoured the Nine and Seven networks, which were usually the ratings winners. This strategy had served us well over many years, but Peter felt this was wrong. He had obviously decided to share his views with me, and a hospitality tent at the Melbourne Cup was to be the venue.
Peter launched into me. He said Ten wanted 25 per cent of the money we spent. We were spending 15 per cent with Ten. This young man assumed I was some middle-man whose job it was it make sure Ten got all the money. He was very aggressive. I listened to him for a short time, then I’d had enough. ‘If you ever bother to grow up it would be good,’ I told him.
It didn’t take long for Peter to report my apparent impertinence to his father. Half an hour later, Frank Lowy approached me. ‘What are you doing attacking my son?’
I indicated to Frank that I’d been doing this job for twenty-five years and his son had been doing it for three months. Frank Lowy had not made a success of Channel Ten, and he sold his interests in the network and moved on. His son had no runs on the board, except a useful surname.
I could see where Frank was coming from; he was there to defend what he thought was right. While I admired Lowy senior’s tenacity, the incident began something of a feud with the Ten Network, and between John McAlpine and me. John was the Ten Network’s sales director when Lowy bought Ten. He became Ten’s chief executive in 1997, a position he held for eight years until 2005.
After the incident in the marquee, overnight we reduced Ten’s share of the advertising budget. John McAlpine never understood why I did this. He went around the industry expressing opposition to what we’d done, with all sorts of comments, which I found reasonably annoying. It wasn’t a great choice of tactic. My decisions about network share of advertising revenue weren’t going to be favourable to Ten while McAlpine was going around bagging us, and he should have known that.
But McAlpine wouldn’t let things slide. Once, at a breakfast meeting, he urged me to start sharing the ads around at a rate that reflected the ratings of the respective networks. John has said that to me every year since 1981: his constant refrain.
After he became chief executive, we scheduled a business breakfast at Harveys, a chi-chi café in Murphy Street, South Yarra, frequented by business people and well-dressed South Yarra types. At the breakfast, McAlpine started to speak very badly of Kerry Stokes. It was quite personal. I liked and respected Kerry Stokes, and I wasn’t happy with what was being said. I felt it was unnecessary and disrespectful.
As it happened, I had ordered two eggs with hollandaise sauce and crisp bacon on the side. The moment the plate was put down in front of me, I said, ‘I am not going to listen to this any more.’ And with that, I stood up and walked out. As I walked out I looked back, and everyone was hopping into their breakfast. It struck me as I walked away: that is probably the greatest test I have ever had, because my love for food was competing with my loyalty to Kerry. Loyalty for Kerry won, but I do think of those eggs and hollandaise sauce from time to time.
John McAlpine has been kinder to me in print subsequently. ‘When I ran the sales operation for Ten in Melbourne, Harold and I had our moments and didn’t see eye to eye on a multitude of things, but he’s the best operator in the country by a country mile even though he’s not always given me enough money,’ John told the Australian Financial Review in 2002. ‘It’s hard not to respect what he does. He’s so close to it and so passionate. He’s like Singo [John Singleton] was, there’s not too much science, just get enough exposure and make it work. He’s terrified the market for a long time.’
A feud with a member of the Packer family wasn’t a great development, even if the feud was with Clyde Packer, Kerry’s older brother and an intelligent, charming and highly sensitive man. It was always thought that Clyde would take over from Sir Frank Packer and, for a while at least, he did. I was younger than Clyde by ten years when he took control of the Nine Network and I was representing the advertising agency Masius as national media director. We had a business arrangement with Nine to prepare their ads. Nine had been a long-running and very valuable client. I also represented other clients of the advertising agency as the buyer of media on the Nine Network. So Clyde and I had to deal with each other.
I had a strong point of view about the Nine Network not having the right pricing for two of our clients—Wilkinson Sword and Mobil—in a very major business deal. And so I left Nine out of a big deal and diverted the ads to Seven. For Nine, it was a critical decision. I refused to budge, or even talk about it. The Nine sales director pushed me and pushed me and finally went to Clyde Packer. Packer wrote a telex to the chairman of the advertising agency and sacked it from the Nine account. I was devastated, because this had exposed part of the agency, but I was pretty firm in the view that I was acting in the best interests of our clients.
The chairman of our ad agency called me in to see him. I walked into his office, a little nervous I must admit. ‘Sit down, Harold, there’s something I want to tell you.’ He explained that there would have been another way to work this rather than having an argument with someone very senior and pushing them into a corner, where it was embarrassing, which is what had happened with Clyde Packer. The chairman then said something I’ve always remembered. ‘Harold,’ he said, ‘you are a very clever young man. The only trouble with you is you’re not old enough.’
But I was old enough to avoid my next mini-feud in 2003, this time with James Warburton, the Seven Network’s national sales director. For some time he had been the rising star of Australian television and is the anointed next head of the Seven Network, now the strongest network in the country. Before joining Seven, he was the head of a Sydney-based media agency called Universal McCann. For four years we had had a very successful contract with the Federal Government to place its advertisements, which we expected to renew for a further four years. The work was put out to open tender. To my surprise and, I must say, disappointment, Universal McCann won the work, which was worth $90 million, away from us. We have handled a lot of government business over the years, which has been rewarding, so the loss was a very big blow. We had no complaints because it had been a fair and open tender. We thought that we should have kept it. He must have been much smarter than we were at presenting his case, and good on him.
‘No one likes to lose $150 million worth of business,’ Warburton told Good Weekend in 2006. Warburton’s successor, Nick Nichles, added: ‘I think the proximity it gave him to power was as important to him as the revenue. It is quite intoxicating to walk into Parliament House and sit across the table from the Special Minister for State and the PM’s private secretary, Tony Nutt, and to be part of the machinations of the Federal Government.’
A few days after this, I gave an interview to Andrew Dodd of the Australian. The interview went well, until the subject of James Warburton and the lost business was brought up. While I am always careful when talking to journalists, and I am also very careful about trying not to swear, sometimes I fail. I must have done so in a weak moment. He asked for my view of James Warburton so I said, ‘Well, he is a very aggressive and clever young man.’ I added, ‘He really is an arsehole.’ I’d said that because he was a competitor. I hated every competitor. Still do. Haven’t found any way to like any of them.
In my mind I thought I was speaking off the record, though I didn’t stipulate that to Dodd. The media jumped on me, The Australian suggesting it wasn’t a clever way to endear myself to the nation’s second most watched television network.
When the piece was published, how embarrassed was I. ‘That’s a terrible thing to say. Why did you say it?’ Bevelly asked. I took the coward’s way out. ‘I have been misquoted,’ I told her. That line has been used many times, from prime ministers to murderers. But the truth is I said it.
James had been very clever, working the market and the people very well. He targeted those who were making the decision and put a case to government that they could save money, always an attractive option. A case was put that someone could do even better than us. We doubt that they would have done a better job, but it was a very strong case from a very energetic young man who had great appeal. We, on the other hand, were resting a little on our laurels. We had done an outstanding job by every measure over four years, but it was a very good lesson not to rely entirely on what you’ve done in the past.
The ‘arsehole’ comment kept being resuscitated. In 2006 I told Good Weekend: ‘There are two regrets in my life. I regret not being very tall. And I regret saying that.’
James was just about to start a new job at Seven, and he was horrified. He immediately rang his soon-to-be-boss David Leckie, Seven’s chief executive. Here was someone who knew about yelling. We’d often yell at each other—he yelled more than I did. Leckie said to James: ‘Don’t worry, calm down. That’s just Harold.’ That put him out of his misery.
My comment caused a little bit of media merriment. Anne Parsons, managing director of rival agency Zenith Media, told the Australian in 2003 that the loss of the government media-buying contract was ‘the most crushing thing that has happened to him’: ‘She believes Mitchell is deadly serious when he vents his spleen against Warburton [the article related]. “He absolutely means it. He was quite confident that he was closely enough related to that business that that was not going to happen.”’
I responded: ‘We didn’t lose it. It’s a four-year term and it’s quite standard for the Government in any tender to appoint a new firm. In fact it’s uncommon to have it more than once. It’s just that it had been considered that we had done quite a good job and we would probably get another term, but we didn’t and shouldn’t have expected it.’
James and I were all right about it all. When I contacted him five years later he still had the article in his top drawer. James and I are very good friends; he is an outstanding executive; and I now like to see him as a recovering arsehole.
We recovered from the blow of losing the government account. We got on our bikes and pedalled harder. The following year we grew even more, putting on account after account. It proved the benefit of drawing a line under all the negativity, and moving on. The only way to look is forward, and that’s what we did. The account loss happened at Christmas, so I was pleased we didn’t have to sack any staff. I spoke to the staff, told them we were going to pull together and build our business even bigger. The year following, 2003, we became the media agency of the year.
The incident reinforced for me that you never stop learning and that the minute you think you know it all, there’s big trouble ahead. Any company of any size that wants to be good has to be competitive and not lose any advantage by dropping off the pace. Mark Tucker is the chief executive officer of L’Oréal Australia, a major brand in Australia and worldwide. Mark was a client whom we believed needed to be part of our group, but he was with competitor Belinda Rowe, who is the managing director of Optimedia, a French company. Mark was never going to move.
But that wasn’t going to stop me from making some mischief and having some sport. At the Athens Olympics in 2004, I was part of a group enjoying Seven’s hospitality aboard the Silver Whisper, the large cruiser they had hired for the three weeks of the Games, which was moored in Athens’ harbour. Mark Tucker and I were having a drink—me on the mineral water, he on the wonderful Greek wine. I had just found out that Belinda had acquired the whole of the News Limited advertising account, which was considerable, one we would have liked to have been involved with ourselves but missed out.
I had accepted the news, even though I was most unhappy about it. I made it my consolation prize to upset all of her clients. So over drinks on the Silver Whisper I told Mark that the media-buying company, Optimeda, which handled his account, was going to have a client even bigger than L’Oréal in the form of News Limited, and all of the top people were going to work exclusively on News. As a major client he was not about to get the same level of attention at all. Did I know this to be true? No. Did I suspect it might be? Probably not. Did I enjoy planting that seed in Mark’s head? As David Brent in The Office might have said: ‘Guilty as charged.’ I left Mark with that thought without thinking again about it. I didn’t realize that in the next twenty-four hours the phones ran hot. Mark immediately left our conversation and rang Belinda Rowe in Australia. He was quite clearly concerned at the prospect of losing his major client status.
Belinda Rowe rang the executives of the Seven Network, from Ryan Stokes—heir apparent to Kerry Stokes—to David Leckie and James Warburton, the sales director. My understanding is the message was: how dare you let Harold Mitchell talk to one of their clients in such a fashion in Athens on their boat?
Wasn’t that good, to get one of our competitors so put out when you’re 12,000 kilometres away? Some might call it vindictive, I call it business. That’s probably one of the best victories I’ve had. It was written in Good Weekend in 2006 that there is little I enjoy ‘more than making an opponent squirm’. I don’t know about that. I’m sure there are hundreds of things I enjoy more. I just can’t think of them right now.
These feuds are OK. I have had some very aggressive meetings with people yet remain very good friends. I would put John McAlpine in that category. The media world is like a family, and you have to be firm with members of your family from time to time, especially your children. Inevitably they will go to bed crying. The trick is to always complete the battle by the end of the day.
But one feud will stay with me always.
One morning in 2005 three senior executives walked into my office and, one after the other, resigned. Their names were Mal Dale, Paul Blatchford and Chris Nolan. They had spent the previous three months secretly planning this moment. The block resignation took just a few minutes.
The three were part of our six-member senior management group, which I installed in 2004 when I announced I was stepping back from day-to-day running of the business. Dale was in charge of future development, Blatchford media buying and Nolan strategy and planning. My son Stuart oversaw operational matters. The partners were not offered equity in Mitchell & Partners but a parcel of family-owned shares in emitch.
On this morning Dale and Nolan indicated to me that they had decided they would move on without telling me anything further about their plans. Both said: ‘I have decided to move on.’ But the third one, Blatchford, took a different tack. ‘I’m resigning,’ he said, and handed me a letter. But when I questioned him about what he would do next, he said there were some opportunities that were emerging, and kept saying: ‘We could see different things that could be done.’
‘What do you mean “we”?’ I said.
It became clear that the three were acting in concert. The move was audacious and strategic. It was a credit to them that I found out at the last minute and they’d been able to keep it quiet. But then, they were pretty smart people. I believe that they wanted to go elsewhere and take a good portion of our business with them.
They probably weren’t as clever as they should have been. They left behind a trail of telephone and computer records so we could see what they were up to.
But what were they up to? What were they thinking? It was misguided to think that big companies simply move advertising accounts around just because of personalities. But it was the desperation that can be built into the competitive world we’ve got. We think the business of getting and keeping clients is much more serious than just throwing a few dollars around and putting up a new shingle.
Still, it was not a pleasant chapter. We don’t look kindly on any executives who might do that in any company anywhere. It’s often been said that we react savagely to people leaving, and in some cases it’s true. We wouldn’t think anyone else would do anything differently. These men were very highly paid executives earning more than they could have elsewhere. But they thought they could be me. They thought I was getting older, and they thought they could replace me.
My response? I simply redoubled my efforts. I never felt challenged by them at all, but I felt challenged by the occasion.
Still ill-feeling? Yes. Do I let it worry me? No. It happens in business. Do I forgive? Yes. Do I forget? No.