How a cast of business moguls shaped Sydney

W​hen businessman Samuel Terry died in 1838, a military regiment marched through the streets of central Sydney, playing Handel’s Dead March in Saul. The procession along dusty streets was possibly the most splendid funeral that Sydney, a city of 25,000 people, had seen. Reports in London about the funeral, however, prompted outrage. Imagine, seethed a writer in The Times, having such a fabulous funeral for an ex-convict.

Terry, known to his contemporaries as the Rothschild of Botany Bay, was worth half a million pounds when he died, which is equivalent to $57 million today. The conservative Sydney Herald, which would later be renamed The Sydney Morning Herald, marked Terry’s passing with a three-line death notice. His achievements, wealth and involvement in politics and philanthropy, warranted a news story but there was none because the newspaper opposed the social and economic improvement of ex-convicts.

Few former convicts became as rich as Terry. An illiterate labourer, he had been deported from England to Australia for the crime of stealing stockings. When he became a free man, he took a job as pub keeper, and later became a money lender, taking people’s property and livestock when debts weren’t repaid, as well as buying and developing his own land and houses.

When he died at 62, Terry reportedly held about one-fifth of the total value of mortgages registered in the colony, which was more than the mortgages held by the Bank of NSW, according to Robert Hughes’ Fatal Shore. Terry was also a major shareholder in the Bank of NSW (now Westpac), the first company founded in the state.

Terry’s death notice in the Herald appeared amid advertisements selling everything from preserved salmon, tin plates, striped shirts, rum to soft soap. There was an announcement that Maurice the Woodcutter was playing at the Theatre Royale, while various ships touted passages to England, India and Tasmania. The Herald, which had been founded seven years before Terry’s death, was dominated by advertising, government and legal notices.

While the Herald had ignored Terry’s rags to riches story it would be an anomaly in the newspaper’s 190-year history. For the Herald would tell the stories of businesspeople bold, colourful, generous and ruthless in its pages. Moguls who would shape the city’s history and, indeed, the history of the Herald itself.

In the year that Samuel Terry died, a bankrupt English newspaper proprietor called John Fairfax arrived in Sydney, with his wife and four children, looking for a fresh start. He took a job as a librarian, making friends with other immigrants, among them businessman David Jones, who had just opened his first department store on George Street.

The modern city of Sydney was 50 years old and prospering on the back of its agricultural trade, especially wool. It was a city of opportunity as John Fairfax had hoped. Within three years of his arrival he became the co-owner of the Sydney Herald, which by then was the city’s dominant newspaper. In 1853, he would become the paper’s sole owner, and after returning to England to pay his creditors, he would begin building the foundations of a media empire and dynasty, John Fairfax & Sons, which would last over 150 years.

Samuel Terry was known as the Rothschild of Botany Bay. When he died he reportedly held about one-fifth of the total value of mortgages registered in the colony, more than the mortgages held by the Bank of NSW.Credit: Fairfax Media

In the decade that John Fairfax established himself as the sole owner of the Herald, Sydney would be gripped by gold fever. The Herald was concerned the gold rush would cause social upheaval, as more than half a million people rushed to the fields. “Many persons are going to dig for gold who are wholly unfit for such work; men who would hesitate to walk the length of George Street in a shower of rain,” it opined.

The gold rush would cause some people misery and ruin but overall it lifted the nation’s economy, the wealth of John Fairfax, and the circulation of his newspaper. The Herald would later describe the gold rush as “one of the most remarkable phenomena in the history of the world”. By the mid-1850s, the Herald’s daily circulation had grown to 6600 making it the third biggest circulating newspaper in the British Empire, behind London’s The Daily Telegraph and The Times.

John Fairfax had also become one of the city’s most influential businessmen and, through the following decades during which time the Sydney Stock Exchange was created, he would sit on at least half a dozen boards of the country’s biggest companies, among them insurer AMP and the Australian Gas Light company, now AGL.

In 1877, John Fairfax died but his family’s passion for the newspaper continued and as it prospered their wealth grew. Gavin Souter in the book Company of Heralds writes that in the years prior to the Great Depression, The Herald’s general manager would arrive at work in a Rolls-Royce. The Depression period was also when the Herald would celebrate its first century of publishing.

John Fairfax would build a media empire and dynasty, known as John Fairfax & Sons. Credit: Fairfax Archive

In the 1930s, the Herald faced intense competition from a rising media mogul Frank Packer who would launch The Australian Women’s Weekly and take control of The Daily Telegraph. At the time, the Telegraph, unlike the Herald, put news on its front page.

The rivalry between the Telegraph and the Herald was fierce. Fairfax, with an energetic Warwick Fairfax running it, adopted a “whatever it takes” attitude to beating Packer. In 1937, he demonstrated just how far Fairfax would go to smash Packer when a plan was hatched for the Herald to be the first Sydney and Australian newspaper to publish high-quality photographs of the Coronation of King George VI.

Multiple photos of the coronation were being transported from London to Sydney by air, for all the Australian newspapers to use. Fairfax executives and editors knew the plane carrying those photos would have to refuel in Singapore, so they decided to intercept it and obtain a set of pictures early. To do this, Fairfax chartered its own plane from Sydney, which flew via Cloncurry, Darwin to Timor, but bad weather prevented it from arriving in Singapore. So Fairfax paid for another plane to fly the photos from Singapore to Indonesia where a Herald reporter was waiting. From there the chartered plane and reporter raced the images back to Australia, arriving in Sydney at 11.40pm on a Friday night. The photos appeared in the Saturday edition, beating the Telegraph by two days.

The Sydney Morning Herald faced intense competition from media mogul Frank Packer who would launch The Australian Women’s Weekly and take control of The Daily Telegraph.Credit: Fairfax Archive

Such tactics boosted the Herald’s circulation, which was around 235,000 by the end of that decade. In contrast, the Telegraph was losing money. Packer told the Fairfax family of his plan to sell the Telegraph to another rival media mogul Keith Murdoch - unless he could raise the cover price of his paper. The Herald didn’t want Murdoch, who ran newspapers and radio stations in others states, entering the Sydney market. So a deal was struck with the wily Packer where the Telegraph and the Herald lifted their cover prices to be the same, even though Fairfax didn’t need the revenue. From there Packer would go on to develop a strong media empire, which would become even more successful under his son Kerry, who would transform Channel Nine into Sydney and the nation’s dominant television network.

Over time Fairfax expanded its media interests beyond the Herald. It started and bought a raft of newspapers, magazines, radio and television stations. The expansion was entrepreneurial but mostly defensive, writes Colleen Ryan in her book, Fairfax, the Rise and Fall. At the core of that expansion was one goal: to protect Fairfax’s flagship newspaper, The Sydney Morning Herald, which by the ’50s had grown to 80 pages.

As the Fairfax family media empire grew it would require more capital and so in 1956, the company listed on the stock market, with the family retaining just over 50 per cent of the shares. In the same decade, the federal government would create the Reserve Bank of Australia, separating its function out from the Commonwealth Bank of Australia.

Newspapers up until the early part of the 20th century had been Australia’s main source of news and political commentary. Radio only arrived in 1923 and TV in 1956. It meant the role of a newspaper owner was very powerful, and John Fairfax and his heirs, particularly Warwick Fairfax, were key players in Australian business and politics. This influence was exercised through the Herald, which held politicians and governments to account, sometimes making enemies of prime ministers among them Robert Menzies and Paul Keating, while upsetting rivals such as the Murdochs and the Packers, and being a thorn in the side of business tycoons from Alan Bond to Gina Rinehart.

The 1950s saw the start of a manufacturing boom in Australia, which would come to dominate the economy over the next few decades. Manufacturing would temporarily replace the resources and services sectors as the biggest contributor to the country’s economic growth. While the Fairfax, Murdoch and Packer families continued to shape public opinion in Sydney, other businessmen would also put their stamp on the character of the city, such as Frank Lowy, co-founder of Westfield, and Harry Triguboff, the founder of property developer Meriton.

Lowy opened his first mall in Blacktown in western Sydney in the ’50s, and from there began transforming the city’s suburbs, changing the way people shopped and socialised. Triguboff began remodelling Sydney suburbs with multi-storey apartment blocks from as earlier as the ’60s, and would eventually build tens of thousands of apartments across the city, earning him the nickname high-rise Harry.

Frank Lowy and Harry Triguboff.Credit: Fairfax Media

Entrepreneurial businessmen developed many companies in Sydney over two centuries, some of which would survive the test of time and go on to become national and global names, from Woolworths to Lend Lease to Macquarie. Few, however, would be as prized and competed for as media companies, particularly John Fairfax & Sons and The Sydney Morning Herald.

In the ’80s changes to media laws, and loose credit, saw a bunch of businessmen and speculators buy into the media from Alan Bond, Frank Lowy to Christopher Skase, but their investments would be shortlived and disastrous.

Another ill-fated deal of that decade would be Warwick Fairfax junior’s bid to take the Fairfax empire private in 1987, as he went after what he believed was his inheritance. He had a team of advisers including businessman Laurie Connell, who was supposed to secure a staggering $100 million fee on the deal. Connell would later do time in jail for a fraud unrelated to his Fairfax work.

Warwick Fairfax Jr’s takeover happened just prior to the global stockmarket crash in October ’87. In the ’80s there was the floating of the dollar, loosening of restrictions around loans, the lowering of tariffs and a move away from centralised wage regulation.

Warwick Fairfax junior launched a bid to take the Fairfax empire private, going after what he believed was his inheritance.Credit: Robert Pearce

Amid such enormous change came Warwick Jr’s bid for Fairfax, which plunged the company into chaos and burdened it with massive debt. Over the next three years parts of the Fairfax empire would be sold, and eventually the company would pass into receivership, before being relisted on the stockmarket.

Kerry Packer, who had made a fortune out of selling his Nine network to Alan Bond for $1 billion in the heady ’80s, and then buying it back at a fraction of the cost, would seriously consider a bid for Fairfax. He took a stake in the company, while British press baron Conrad Black also secured a substantial shareholding. But both men would eventually sell out. Later, Black would be charged with fraud related to his US business dealings and go to jail.

The scheming to own Fairfax continued through the ’90s, drawing in Rupert Murdoch who had taken over his father’s Australian business and grown it into a global media empire. In 1995, Rupert Murdoch and Kerry Packer met in London and hatched a plan to divide the Australian media. Murdoch wanted to takeover Fairfax and sell his existing papers and Packer would get free to air TV. The audacious deal never transpired.

Rupert Murdoch and Kerry Packer.Credit: Bryan Charlton, Jason South

And while that plotting happened a far bigger threat was emerging for Fairfax, which was the rise of the internet. The internet’s arrival and growth would decimate the Herald’s stranglehold on the lucrative classified advertising market, which had for nearly two centuries subsidised its quality journalism. Ads for everything from jobs to homes to cars began to migrate online to companies like Seek and realestate.com.au and later Google and Facebook.

The internet changed Fairfax’s financial fortunes, and the company would be forced to shed hundreds of journalists. Still, the Herald’s ability to wield enormous clout continued as it uncovered wrongdoing among wealthy and powerful individuals and institutions. The exposure of NSW Labor minister Eddie Obeid’s corrupt business dealings by investigative journalist Kate McClymont; Adele Ferguson’s reports on the appalling treatment of customers by the major banks triggering a royal commission, and Nick McKenzie’s investigation into organised crime infiltrating ​C​rown casino group, are just a few recent examples.

For over nearly two centuries the Herald’s reporting has also helped shaped public policy. It’s one reason why the business moguls weren’t quite done with Fairfax, and why yet another would emerge with aspirations to own it.

Australia’s richest woman Gina Rinehart, whose fortune was made in iron ore, took a stake in Fairfax in 2012.Credit: Matt Krumins

In 2012, Australia’s richest woman Gina Rinehart, whose fortune was made in iron ore, took a stake in Fairfax. A joke began to do the rounds of journalists on the Herald that the masthead would soon be rebranded The Sydney Mining Herald. Rinehart saw the Herald as a prize, a tool, which could be used to wield influence in Canberra but for reasons only known to her - and amid a backlash by staff to any changes to the charter of editorial independence - she abandoned any dreams of controlling the company and sold. Buying Fairfax would have been small change for Rinehart, as the Herald’s readers knew, for the newspaper had written extensively about her inheritance, her business success and also the unseemly battles with some of her estranged children over money.

A few years later the Nine Entertainment Company would successfully merge with Fairfax. By then property and tech billionaires stories were making headlines in the Herald and rich lists. Among them was a new company called Afterpay, which found a novel way to allow people to buy goods they can’t afford upfront, and pay for them off over time in instalments. It wasn’t money lending but companies such as Afterpay are not that different to how Samuel Terry made his fortune.