14

Mr Melbourne and Captain Kirk

Media proprietors never seem to sit down and have dinner together. There is no need to run the business the way it has been run in the past and I want to change its style and the way it relates with others in the sector.

Ron Walker, 2005

Brian Powers wanted The Age to have ‘swagger’. He wanted an advocate for Fairfax in Melbourne, someone to fight for it, to help it regain pride. So, in 2002, as a parting gift to Fairfax, he appointed his mate Ron Walker to the board. But Powers never expected Walker to become chairman.

Powers has a tendency to take a light-hearted view of the cut and thrust of the business world. It is probably part of his recipe for success. He enjoys it—or appears to. The comment ‘It was a bit of fun’ peppers his descriptions of some of his most complex and confrontational deals. So when he faced criticism for appointing Walker to the Fairfax board, he gave a typically blithe reply. ‘Would I give Ron a quiz on the finer points of corporate governance?’ he said to the Fin Review. ‘No. Do I think he will be anything but a 100 per cent ethical director? Absolutely not.’

So even Walker’s promoter doubted his skill in corporate governance. No wonder many journalists were horrified when the lanky, red-headed man with the gold Rolodex made himself comfortable in the Fairfax chair in late August 2005.

Walker is probably one of the best-connected people in Australia. He trades on his connections—the thousands of them that he has gathered through an eclectic career in business and a prominent public life. Walker made his fortune—he was worth about $800 million in 2005 according to the BRW rich list—primarily through property development. Hudson Conway, the company he founded with Lloyd Williams, was one of the entrepreneurial high-flyers of the 1980s, doing deals with Melbourne businessmen like Dick Pratt. It was at the sharp end of the boom. It was close to John Elliott’s Elders IXL Group—Hudson Conway was the second-biggest property owner in England for a time after buying, in partnership with Elders, 5500 Courage pubs throughout the country for more than £2 billion. But the company is best known for building Crown Casino in the early 1990s and then selling it to Packer’s PBL in 1999. Soon after this, Hudson Conway was privatised. As part of the deal, Walker swapped his stake for 5.3 million shares in PBL—he sold them near the top of the market for $80 million.

But there was more to Walker than business. He was the lord mayor of Melbourne for two terms in the 1970s. He negotiated the deal that saw the Australian Formula One Grand Prix move to the Victorian capital from Adelaide. He headed the successful bid for Melbourne to host the Commonwealth Games in 2006. And he was federal treasurer of the Liberal Party from 1987 to 2002, raising more than $170 million. He also lent his fundraising talents to Britain’s Conservative Party, giving an international complexion to his bulging contact list.

And Walker loved the media, particularly The Age. He was part of a consortium that tried to buy The Age in the 1980s when Robert Maxwell put in his bid for the newspaper. So why were Fairfax journalists appalled when Walker took over the chair?

Well, political connections for a start. Walker made no secret of which political party he backed. He was an individual profile of the Liberal Party, one of the champions of the conservative cause. He was even part of the political lexicon—to be ‘Ronned’ was to be bulldozed into donating a hefty sum to the party of John Howard. Walker was one of a handful of people in Australia who could get the prime minister on the phone. He was also the public face of the Commonwealth Games and the Grand Prix, both of which benefited from saturation media coverage—if they could get it. Their chances of doing so surely increased when Walker became the head of the most prestigious media group in the country.

Then there was the fact that, while a success in business, Walker in his time had been a favourite target of investigative business journalists who questioned his deals and his government connections as he totted up development approvals and successful casino tenders. And there was one other reason—Walker had been a vocal critic of The Age alongside his mate, former Victorian premier Jeff Kennett. He was unlikely to be a reticent chairman—Walker’s whole personality was very much hands-on. He would be in charge and he would be a change agent. He was in fact determined to champion cultural change at Fairfax.

Despite the controversy over his appointment, the path that Walker took to reach the chairmanship was relatively straightforward. Within a few months of joining the Fairfax board in 2002, he went into the deputy chair’s position under Dean Wills. This was partly because he had the imprimatur of Brian Powers and partly because he was strongly supported by Mark Burrows. Walker, it was felt, would soften the hold that the Westfield clique had on the Fairfax board. Walker told board members at the time that he had no ambitions to be chairman. Of course that changed, but it also helped him clinch the deputy’s position. When Wills stepped down in September 2005, it was an easy step up for Walker. Gonski had left the board along with Margaret Jackson and Sir Rod Carnegie. Roger Corbett was still chief executive of Woolworths. Burrows was arguably the only real competition for Walker, but he was based in London and still perceived to be close to Murdoch. In any case, Burrows picked up the deputy chairman’s slot. He was happy with that.

Walker wasn’t the only new force in the company, however. David Kirk, as the new chief executive, also brought a very different approach to that of his predecessor, Fred Hilmer.

Kirk is an intriguing character. He trained as a medical doctor but never pursued medicine as a career. He excelled at Rugby Union and captained New Zealand’s All Blacks to a World Cup win in 1987 before giving the game away altogether at twenty-six. He won a Rhodes Scholarship and studied at Oxford University. He dabbled in politics for three years, on the conservative side, as an adviser to New Zealand’s National Party prime minister Jim Bolger. By the age of forty-four, when he was recruited to Fairfax, he was running a medium-sized company in Australia—the printing business PMP.

Kirk was clearly a high achiever, but he never tarried anywhere for too long. He had been at PMP for just two and a half years when Hilmer identified him as a candidate for the Fairfax job. He was widely credited with having achieved a difficult restructure at the printer, though it was not without its downside. In the few months before he left the company, its share price tanked—down by 42 per cent in a matter of days after Kirk announced a cost blowout on four new printing presses.

Like Hilmer, Kirk freely admitted that he had no real experience in newspapers. But, unlike Hilmer, he professed to love them. He had written a Rugby column for five years in New Zealand and he understood the business from the production side. Kirk also had a personality and background better suited than Hilmer’s to the rough-and-tumble of the newspaper business. He could handle the blokey culture of his competitors at News Limited and effectively communicate with them. It is hard to ‘out-bloke’ a former captain of the All Blacks, whereas an academic like Hilmer was easy game for the tough guys at News.

Both Walker and Kirk had seductive personalities, though Walker was perhaps too much the charmer, too obsequious for some, while Kirk was more approachable, confident and likeable, not at all boastful about his Rugby career. And, as it turned out, Kirk and Walker were on the same business page. They were expansionists. They were risk-takers. They wanted to diversify Fairfax’s balance sheet. In this, for the most part, they had the board onside. Burrows, in particular, was a big supporter. Julia King liked Walker’s energy and his politeness. Roger Corbett seemed to be hedging his bets—he still had his day job heading up Woolworths. David Evans and Peter Young were new members and, as such, harder to read. (Evans, a former senior executive with Murdoch’s BSkyB group in the United Kingdom and Fox Television in the United States, was chief executive of Crown Media, owner of the Hallmark cable television network. Young was a senior investment banker in Australia with Dutch bank ABN AMRO.)

Kirk started at Fairfax in mid-October 2005 and became a director at the annual general meeting that November. By then, he was already negotiating his first big deal, a takeover of the New Zealand-based auction and advertising website Trade Me. This was an early and important coup for Kirk. It cost Fairfax NZ$750 (A$625) million but was to be one of the company’s most profitable subsidiaries until it was finally sold off five years later—at a considerable profit.

The Trade Me deal gives an insight into Kirk’s strategy for Fairfax. He was focused both on expanding Fairfax’s reach in the internet space and on classifieds, which was where the money was—at least at that stage. One of Kirk’s biggest regrets was that he hadn’t arrived at Fairfax a year or two earlier. He believed that he would have been able to grab at least one of the internet classifieds sites—Seek or carsales.com.au or even realestate.com.au. It would have come at a high price, but dominance of just one of those online markets could have changed the future of the company.

The Fairfax board meeting that eventually signed off on the Trade Me purchase was held in the committee room of the Melbourne Cricket Ground. The opening ceremony of the Commonwealth Games had taken place at the MCG just a few weeks earlier, in March 2006, and Walker had chaired the organising committee. He wanted to show off the stadium’s refurbishment. Kirk was passionate about the Trade Me deal but the board took a lot of convincing. Fairfax was paying NZ$750 million for a business that had only $5 million in tangible assets, one director complained. But Kirk pushed it through and it turned out to be one of the best deals Fairfax ever did. The market capitalisation of Trade Me is now one and half times that of Fairfax.

As the purchase of Trade Me was finalised, an even more significant development appeared on the horizon, one with important long-term implications. Kirk and Walker were catapulted into the biggest change in the Australian media industry for a decade. John Howard’s new media laws were put out for discussion in March 2006 and all the big players were jostling for position. There was an exception, however. One of the moguls who had dominated the Australian media for the past three decades, Kerry Packer, had died.

‘Am I still here? How fucking long is this going to take’, said Kerry Packer on his deathbed on Boxing Day 2005. Packer had died once before, just briefly, after a heart attack on a polo field in October 1990. His famous assessment of that occasion had been: ‘I’ve been to the other side, and let me tell you, son, there’s fucking nothing there’. This time it was final. Packer’s transplanted kidney, donated by his helicopter pilot some years earlier, had failed. The previous day, just after Christmas lunch, Packer had been transported by ambulance from his mistress’s apartment at Elizabeth Bay to the Packer family compound at Bellevue Hill, where his wife Ros was waiting. His son James was holidaying in the Maldives and made a mercy dash home. Kerry Packer passed away a few hours after saying farewell to James.

There was a state funeral for Packer, held at the Sydney Opera House and broadcast live on Channel 9. It was choreographed by Peter Fairman, who had been the coordinating director of the opening ceremony of the Sydney Olympics. Actor Russell Crowe read the Kipling poem ‘If’.

If you can keep your head when all about you

Are losing theirs and blaming it on you;

If you can trust yourself when all men doubt you,

But make allowance for their doubting too:

If you can wait and not be tired by waiting,

Or being lied about, don’t deal in lies,

Or being hated, don’t give way to hating,

And yet don’t look too good, nor talk too wise

Shock jock radio host Alan Jones was the master of ceremonies at the Packer memorial. The entire Australian cricket team turned up, along with cricketing legends like Tony Greig, Richie Benaud and Shane Warne. The golfer Greg Norman was there too and there was a good smattering of politicians—Prime Minister John Howard, Bob Hawke, Neville Wran, Graham Richardson.

The final act was the chorus of the World Series Cricket anthem ‘C’mon Aussie C’mon’. Packer would have loved it.

David Gonski and Lloyd Williams were the executors of Packer’s estate. James Packer inherited control of assets worth an estimated $6.2 billion. He was completely in charge of PBL and the Crown Casino empire. Now it was down to business. James did not share his father’s love of publishing and television—at least, not in the new media environment where technology was eroding the revenue base—and letting go of the media assets was near the top of his agenda. But few were aware of that.

The federal government’s media law discussion paper stated that the existing foreign-ownership and cross-media restrictions would go. Any one media company could own two of the three traditional forms of media—newspapers, television stations and radio stations—in one market. And the new regulations were a huge win for existing free-to-air television operators. They would have exclusive access to new digital channels until 2017.

News Corporation and Fairfax slammed the new proposal. It favoured the free-to-air operators, particularly Stokes and the Packer organisation, and greatly impinged on the internet television plans of the print publishers. But by October, the media laws, slightly amended to encompass the demands of National Party members, had passed through the House of Representatives. There was only the Senate vote to go—it would take place the following April—and Howard had the numbers there to ensure success.

There was a sense of deja vu. It was twenty years since Keating had made his famous ‘Queen of Screen or Prince of Print’ statement. In the wake of those changes, all three of Australia’s TV networks changed hands, Murdoch got his foot on two-thirds of newspaper circulation in the country with the purchase of the HWT, and young Warwick made his disastrous bid for Fairfax. Yet it had been a very different media environment back then. In 1986, there were few mobile phones, no pay TV, no publicly available internet and no broadband. This time, in 2006, it was a new ball game.

It seemed hard to believe that it had taken so long, but it had been ten years since John Howard first got into power and promised changes to the media laws. The big players had had plenty of time to run their slide rules over the options. And they were ready to move.

But first, Paul Keating had to have his say. He appeared on the ABC current affairs program Lateline to warn the Australian public about what they were in for under the changed media regime. It was classic Keating. He might have been out of politics but he hadn’t lost his touch.

Relaxing the cross-media ownership rules would harm ‘the quality of our plurality and the diversity of views’, Keating claimed as he took a verbal baseball bat to his enemies in the Packer organisation, at Channel 9 and at The Bulletin. He had never forgiven them for the coverage in 1999 of his interests in a controversial piggery. ‘How would it be living in Sydney, say, if the PBL squad at Channel Nine, Eddie [McGuire] and the boys, also controlled The Sydney Morning Herald’, he said, ‘or [if] down in Melbourne, Channel Nine also owned The Age or Fairfax owned Channel Seven? That’s pretty much it for diversity of opinion coming your way’.

Keating then assured viewers that he was not worried about himself—he was ‘almost bulletproof’, but ‘most people are not’. Keating continued: ‘What would happen is that if you crossed them, they’d go for you. They’d go for you in the print and if that didn’t hurt you, they’d go for you in … their news and current affairs programs. You’d have to keep your nose clean. You’d have to make sure, if the Packer organisation controlled the Herald, The Age and Channel Nine, you’d have to make sure that you got on all right with little John Alexander. You’d have to be in his good books. You wouldn’t rub Fast Eddie up the wrong way, for instance, and Garry Linnell, that great power of journalism that runs … Channel Nine, you’d have to sort of keep your nose clean with him or the hapless John Lyons. This is the way life would become. You would have to tippy-toe around them. I mean, is this the kind of society we want?’

It was a bit rich given the favours Keating had handed out to Packer, Murdoch and Holmes à Court in 1987 at the expense of Fairfax and the HWT. But the irony of it all seemed to escape the former prime minister. In any case, Keating got it wrong. Apparently he wasn’t so well plugged in these days. James Packer wasn’t interested in controlling the media at that point, which he demonstrated as soon as the new legislation had passed through the House of Representatives. PBL sold half of its interest in Channel 9 and ACP’s magazines to a joint-venture company owned by it and private equity group CVC Asia Pacific in a $4.54 billion deal.

The next cab off the rank was Kerry Stokes, who took a 14.9 per cent interest in WAN for $343 million—it equated to $11 a share or a pricey twenty times earnings. A month later came the big one for Stokes. He sold a 50 per cent interest in the Seven Network to private equity group KKR. In a $3.5 billion deal, Stokes sold off equity but retained management control.

The prices of shares in media companies skyrocketed. In the two-week period after the legislation was passed, shares in Fairfax jumped up in price by 17.6 per cent. WAN’s share price went up by 16.3 per cent and Channel 10’s by 19.4 per cent. Serious money was being made and big bets were being placed on the table.

James Packer did particularly well. His deal required a complete corporate restructure. A separate listed company would hold his gaming interests, including the Crown and Burswood casinos in Australia and the joint venture in Macau with Lawrence Ho’s Melco International. PBL’s interests in Foxtel, Fox Sports and Seek would also remain in that listed company. Meanwhile, Packer would have a $3 billion-plus war chest to spend on gaming and entertainment assets. The Packer heir’s change of interests had been flagged by how, on the day the media legislation passed through parliament, he and John Alexander were in Singapore negotiating a casino deal. So much for Fairfax.

Stokes, now the only ‘Kerry’ left among the media moguls, also did very well. His move on WAN took out of play one of the media groups considered a target for either Fairfax, Rural Press or Tony O’Reilly’s APN Media. And his Seven deal with KKR allowed Stokes to pocket a significant amount of cash as a 42.9 per cent shareholder in the Seven Network, at a time when share price valuations in the media sector were inflated by the frenzy of activity. Stokes now had money and was ready to move on Fairfax. He picked up 3 per cent of the company for starters. It would be a perfect fit with WAN and Seven.

And then Rupert Murdoch re-entered the fray. Murdoch’s move on Fairfax was simple and clever, and he effectively shut out Stokes with his paltry 3 per cent stake—it was the equivalent of the media mogul thumping the table, letting the other players know he was still there, and that they should take notice. Just like in a poker game. Murdoch doubled up. He paid up to $5.20 a share for his Fairfax stake at a time when the shares were selling on the market for $4.74. In doing so, he put a floor on the minimum price required to secure the company. It was a clear message that any moves on Fairfax would have to be higher. With a 25 per cent takeover premium, Fairfax would go for over $6, which was way too expensive.

Mark Burrows orchestrated Murdoch’s move on Fairfax and Goldman Sachs JBWere carried it out. It came as a surprise to the rest of the Fairfax board, but News Limited was quick to let Kirk and Walker know this was a ‘friendly’ move. John Hartigan, head of Murdoch’s operations in Australia, called Kirk on the morning after the share market raid to assure him that it was not a declaration of hostilities. Goldman Sachs JBWere had been instructed not to move beyond a 7.5 per cent stake. Meanwhile, News Corporation spokesman Andrew Butcher told journalists that it was ‘purely an investment and is entirely friendly to the existing Fairfax board’.

The tactic gave Fairfax enough breathing room to set up its own defences against Stokes. But while Murdoch might have been protecting the company’s back, there was no denying that Fairfax looked like the rabbit in the headlights once again—the victim rather than the predator, heavy-footed rather than nimble, outsmarted and outmanoeuvred. And there was an implied insult in Murdoch’s defence strategy. He wanted a weak competitor in the Australian newspaper market, not a canny operator like Stokes. Fairfax looked every inch the loser.

Behind the scenes, though, Walker and Kirk felt confident. It was just on a year since they had taken up their positions. The Trade Me purchase was a clear success. There had been a few problems with government approvals, but by April the acquisition had been given the go-ahead by the New Zealand Government. There had been changes in key personnel too. Jack Matthews had been appointed chief executive of Fairfax Digital, formerly named F2. The American, who had had an eclectic career, including a stint with Playboy Video, was bringing new energy to the division.

And Walker was finally introducing some swagger into the organisation. Fairfax would soon change its name to Fairfax Media and emblazon it on a new building in Pyrmont, just opposite Google’s Australian headquarters and down the road from the Seven Network. Walker had declared that the existing Fairfax headquarters at Darling Park were a relic from the days when Conrad Black ran the company. In Melbourne, The Age would move from its Spencer Street premises in the CBD to a new $110 million Fairfax Media House building at nearby Docklands.

There were also other, smaller deals in play. In May 2006, Kirk bought a key regional newspaper, the Albury Border Morning Mail, for $155 million. He also picked up the holiday rental website Stayz and the New Zealand business newspaper The Independent. And he made it clear that he wasn’t interested in moving into television—the days of chatting with Channel Ten were over.

Early in his stint as Fairfax chief executive, Kirk had set out his business philosophy in an interview with the Fin Review:

In the end you have to believe that capital markets are rational. If we are running a good business and if our business is fully valued, no-one is going to pay a major premium to take it over.

The key for us is to run the business well and to make sure that we are not leaving value lying around for someone to say, ‘Oh well, I can afford to pay a premium because this business is undervalued because these people aren’t running it properly’.

Kirk was determined to expand and diversify. And Murdoch had done him a favour. The Fairfax share price was going nowhere while Murdoch had 7.5 per cent of the company. It would stay artificially high, providing a perfect opportunity to do a scrip deal at a high value—that is, to use Fairfax shares as currency to buy another company. Kirk’s target was Rural Press. Classified advertising in regional newspapers was falling, but not nearly at the same rate as in the capital city publications. Rural Press could provide a more stable earnings base. But, to obtain it, Kirk needed to get John B Fairfax on side. John B had made his attitude to Fred Hilmer quite clear—I don’t want to deal with you, I don’t want to talk to you, I don’t want to hear from you. There had been a loss of trust, perhaps irretrievable. But Kirk and Walker saw a way back in—it was a clever strategy.

Brian Wilson in 2012 became the chairman of the Foreign Investment Review Board, one of the most influential government gigs in the country. But for most of his life, Wilson had been the gentleman investment banker—if that is not an oxymoron. Wilson had been an adviser to John B for two decades. He helped negotiate the purchase of Rural Press from Fairfax when young Warwick made his privatisation bid in 1987 and bought out the rest of the family. John B followed Wilson from Lloyds to Citibank. But when Wilson joined the British investment bank Lazards, they parted company. Mark Burrows was chairman of Lazards in Australia as well as a director of Fairfax—both Wilson and John B recognised that there was a potential conflict of interest.

Kirk had dealt with Wilson when he was at PMP and recognised the investment banker as a valuable asset in regaining the trust of John B. It also helped that Burrows was Wilson’s chairman at Lazards. He helped make the connection between Kirk and Wilson, and then John B. And it worked. The talks were back on.

John B by this stage was in his mid-sixties. His family company, Marinya Media—owned by John, his brother Tim and sisters Sally and Ruth—had a huge batch of eggs in one basket, Rural Press. John, as chairman of Marinya and Rural Press, was responsible for the whole family and was feeling the weight of that. Here was an option to convert an illiquid asset into one that was part of a large listed company and, furthermore, one with which John B had an affinity.

All of that made a lot of sense, but the two elements that clinched the deal were price and management. Hilmer had point-blank refused to pay a premium to market price, whereas Kirk and Walker were happy to pay a premium—and a hefty one. Not only that, the price of media assets had been inflated by the market hysteria surrounding the changes in the media legislation. The Fairfaxes would get a premium on what was already a very full price. Kirk and Walker agreed to pay up to $14.35 a share in a shares-and-cash bid. This was a 22 per cent premium on the market price for Rural Press, then $11.75 a share.

The other deal clincher was management. Kirk was somebody that the Fairfaxes felt they could work with. John B wanted his chief executive, Brian McCarthy, to have a prominent role in the merged group. Kirk agreed that McCarthy, whom John B referred to as ‘Ricky Ponting without the pads’, could be in charge of all Australian newspapers apart from Fairfax Business Media, which included the Fin Review and the business magazines.

Rural Press brought 170 newspaper mastheads, including The Canberra Times, to Fairfax as well as some regional radio assets. The Fairfax group now had a total of 240 mastheads. The Fairfax family emerged with 14 per cent of the merged group plus around $100 million in cash, which wasn’t a bad return on the $20 million that John B had paid for Fairfax’s 48 per cent stake in Rural Press some nineteen years earlier.

The deal was announced on 6 December 2006, although it was expected to take some months to bed down because Howard’s media changes weren’t due to go to the Senate until April 2007. The Rural Press merger was not dependent on the media law changes, but it was important to get those through so that all the players were freed from the shackles of the cross-media and foreign-ownership provisions. Walker and Kirk’s Fairfax seemed bulletproof. It was now a $7 billion company, a much more difficult morsel to swallow via any takeover. And it had a long-term shareholder with 14 per cent who could block any hostile bid. Where was Murdoch in all of this? He had met with Walker and Kirk for an hour during a visit to Australia in November 2006, a few weeks before the Rural Press deal was made, but Walker told journalists that the transaction was not discussed.

The newspaper headlines that appeared the day after the Rural Press bid was announced focused on the romance of the Fairfax family’s return. ‘John B the aristocrat who restored the family fortune’, said the SMH. ‘John B Fairfax back where it all began’, said the Fin Review.

Some commentators weren’t so starry-eyed. Alan Kohler wrote, ‘Fairfax is trapped in a 20th century future’, a reference to the fact that this was still about old technology. And Terry McCrann wrote a sarcastic piece for the Murdoch tabloids headed ‘Thanks for getting the firm back together’, which began:

Thank you Rupert. Thank you Kerry. Oh, and a gold-bordered Christmas card is in the mail to Helen [Coonan, then minister for communications].

Thank the trio for what exactly? Enabling Fairfax Media to make its march boldly back to a 1986 John Fairfax future at a discount.

For the merger with Rural Press would recreate much of John Fairfax as it existed in 1986. Before management tore it apart in their inept attempt to play with the big boys in the Paul Keating–inspired media wars.

With young Warwick Fairfax then completing the job with his financially insane—and inane—grab at reclaiming his inheritance.

Some things are never forgotten.

Yes, there was sniping. But when all eyes turned to John B Fairfax, he didn’t disappoint.

My family is the most important thing to me, and I think this means a lot to my family, not just the immediate family, but the broader Fairfax family. And I’ve spoken to some of them this morning, and they are thrilled at the thought of one of the family being involved with Fairfax again.

But there was one more shoe to drop in this deal. Murdoch held on to his 7.5 per cent of Fairfax until 8 May 2007. He only sold out after all the complex merger requirements for Fairfax and Rural Press had been met, and just before John B Fairfax was due to join the Fairfax board. John Hartigan and his management team had been nervous about losing money on the Fairfax shares—any loss would affect their bottom line. But Ron Walker had offered them comfort. He convinced them to stay in Fairfax by offering to buy back the stake, at the purchase price paid by News Corporation, using his own personal funds. Walker never had to make good on that promise—News managed to sell its Fairfax shares on the market and walk away with a small profit.

And, in the meantime, there was another behind-the-scenes arrangement, this one facilitated by Mark Burrows. He held a peace meeting between Stokes and John Hartigan, with Rupert Murdoch on the phone, at Trahlee, his Bellevue Hill home. Murdoch, via Hartigan, made his position very clear. There would be a truce on Fairfax. Neither party, Stokes nor News Corporation, would be involved in a move on the company. As it turned out, the room in which the meeting was held, the library, was the same room in which, back in 1991, Burrows had entertained Conrad Black, Tony O’Reilly and Kerry Packer during the auction for Fairfax which Burrows had presided over. And Trahlee was the house that Sir Warwick Fairfax bought for his second wife, Hanne Bendixson, as part of their divorce settlement, before his marriage to Lady Mary. Plenty of Fairfax history there.