Lachlan Murdoch doesn't recall, the Victorian Left, News Ltd hypocrisy, Macquarie

4. Lachlan Murdoch's embarrassing 205 'don't recalls' in one day



By Stephen Mayne

Lachlan Murdoch's embarrassing performance in the One.Tel hearings over the past two days raises the very obvious question: did he resign as an executive from News Corp in July knowing this was coming, or was he pushed?

While dad would have been loyal to the last, such a performance would have been devastating for Lachlan's reputation as a credible global media executive.

The One.Tel and Super League fiascos were always going to count against Lachlan when it came to the succession question, but the likes of John Malone, the non-Murdoch News Corp directors and all the institutional investors would surely have completely scratched him from the race after his pathetic One.Tel display this week.

There have been mutterings from those who've dealt with Lachlan over the years, but he is now looking like the idiot son. "Unimpressive" was the word used by The Australian's Paul Kelly to Mark Latham, and that's clearly understating it. Indeed, you have to now ask whether Lachlan should remain on the News Corp board, even as a humble non-executive director representing the Murdoch family interests.

Yesterday's performance in saying that he couldn't recall – 205 times in one day, according to the AFR – goes close to surpassing Alan Bond's celebrated memory lapse more than a decade ago when he faced his bankruptcy trustee and various criminal charges but couldn't remember anything. Indeed, former celebrity forensic psychologist and self-confessed coke addict, Tim Watson-Munro, testified that Bond didn't have the brain power to run a corner store, which is what some critics of Lachlan Murdoch might now be thinking.

Lachlan is known to have loved holidaying, sailing and partying long and hard during his years at News Corp. But who could have imagined he would be this vague when it came to the detail of such a big investment that he was directly responsible for as the company representative on the One.Tel board?

But he does have one small excuse. Lachlan left Australia for New York in late 2000 to take up the position of deputy chief operating officer for the global News Corp empire. Getting his mind around that would have been hugely challenging as One.Tel went into a spiral over the next eight months and finally collapsed in May 2001.

Still, the scenario that has been laid out is that News Corp splashed almost $600 million without doing any formal due diligence after James Packer recommended the move to Lachlan over dinner. Lachlan was then appointed as News Corp's representative on the One.Tel board, but he clearly didn't know much about what was going on and simply relied on James Packer, who in turn was way too close to One.Tel founder Jodee Rich.

It looks like Lachlan has failed in his director's duties at One.Tel, but it looks like a failure based on ignorance rather than design. That said, don't hold your breath for ASIC to come knocking down at his Bronte Beach pad alleging the lad failed to fulfil his fiduciary duties.





14. Are Victorians really the most Left-leaning Australians?



By Stephen Mayne

Andrew Bolt had this short piece in yesterday's Herald Sun arguing that Victoria is the most Left-wing state in the country. Bolt mentioned a few anecdotal points such as a supposedly Liberal Anglican church in Victoria and the failure of the pentecostals to take hold south of the Murray. But he did have some facts too:

Check Labor's two-party preferred vote in the mainland states. In the 12 federal elections from 1949 to 1975, Labor's vote was in fact highest in NSW eight times. But then a red mist fell on us and in seven of the 10 elections from 1980, Labor's mainland state vote has been highest in Victoria.

This loosely ties in with this 7.30 Report story on Tuesday night asking why books about Labor issues and figures always outsell books about the Liberal Party. Former publisher and author Michael Duffy was quoted saying:

Australia's intellectual culture, the people who read and write serious books, is very Left-wing. It's perhaps more homogeneously Left-wing than any other country in the world and there are various historical reasons for that, such as the Vietnam War experience and the power of the dismissal. There's just not an audience out there for books about Liberal people but as a general point the reason why intellectual people are drawn to Labor is for much of the last 30 years Labor has been the party of new ideas and intellectuals are drawn to new ideas.

Does that mean Melbourne is full of Lefty intellectuals who love to trawl book shops while their Sydney counterparts are at the beach or out on the harbour? Having the Fabian Society as a Melbourne-centric intellectual arm of the Labor Party supports this theory, and it's certainly true that Victorians are the undisputed leaders when it comes to union marches.

But there are several aspects of Victoria which suggest the so-called Jewel in the Liberal crown is not full of rich red raggers – and Bolt's paper, the Herald Sun, is a case in point. A more right wing News Ltd tabloid you will not find anywhere else in Australia, yet it has the highest penetration of any newspaper in the world. Similarly, 3AW provides a staple diet of Right-wing views and opinions and it's Australia's highest rating and most profitable talk radio station in the world.

That said, even the power of 3AW and the Herald Sun won't be able to save the Liberal Party from another flogging at next year's state election, although the Bracks government is far more centrist and responsible than the incompetent Lefties who had control towards the end of the Cain-Kirner years.

Similarly, Melbourne has Right-wing businessman John So as its twice popularly elected Lord Mayor, although this might reflect the fact that business owners get a disproportionately high amount of votes in council elections.

Only Sydney has been able to install a solid Lefty like Clover Moore as Lord Mayor and it is Brisbane that elected the only Liberal-stamped Lord Mayor in the country when Campbell Newman got up last year.




20. News Ltd hypocrisy over Fairfax attacks



By Stephen Mayne

The Australian's media attack dog John Lehmann ripped into Fred Hilmer's legacy in today's Media section and it was quite a good read as he clearly spoke to plenty of former Fairfax executives. But there there was one fundamental piece of hypocrisy with all of the bile. In financial terms, Fred actually did far better in Australasia than his News Ltd counterparts.

The two companies did one major deal together, Fairfax's $1.09 billion purchase of News Corp's New Zealand publishing assets 30 months ago, which was largely driven by the Murdoch mate on the Fairfax board, Mark Burrows.

At the time everyone thought Fairfax had gone over the top, but when you considered the redundancy bill that News Corp had to help pay, a $60 million currency gain before settlement and then the synergies, cost savings and revenue growth that Fairfax have delivered, it's clear that Fairfax made the right move in what has been its only major strategic takeover in the past 22 years.

Fairfax shares fell 16c to $2.87 the day after the deal was announced in April 2003. The company then sold 110 million new shares to institutions at $2.77 a pop and then sat back and watched as the stock soared to a high of $4.70 in February this year as the New Zealand acquisition came good.

For all the criticism of Fred, and certainly he's missed the boat with online classifieds and allowed the key metropolitan newspapers to decline, the financial performance has out-stripped News Ltd when you consider the estimated $1 billion that has been dropped on One-Tel and Super League.

In fact, you can't help but wonder if News Corp's chronic underperformance over the past decade hasn't been partly because Rupert has been too focused on simultaneously over-promoting his children and building a dominant empire they can one day inherit.

The final paragraph of Lehmann's attack on the front of Media today was very telling:"Earnings under Hilmer have increased from $116 million in 1997-98 to $252.6 million last financial year, while earnings per share lifted from 13.9c to 25.5c."

News Corp's profits have certainly ballooned in recent years, but only because Rupert has regularly gone over the top issuing $25 billion worth of non-voting scrip to expand the empire. He hasn't lifted earnings per share at all since 1987 as Mike Mangan's swansong report for Deutsche Bank pointed out earlier this year.

It would be a hard admission for any News Corp loyalist to make, but Fred Hilmer has been far better for shareholders than Rupert Murdoch over the past seven years.




31. Tracking the Macquarie Bank family of influence



By Stephen Mayne, small shareholder in five Macquarie Bank vehicles

Singapore Inc might have quite a powerful network in Australia but it doesn't compare with the vast networks that Macquarie Bank now commands across the business community. Forgetting the array of consultants, executives and mainboard directors, how's this for a line-up of impressively connected directors on Macquarie's various satellite funds:

Neil Balnaves: Australia's television production guru is chairman of Macquarie Leisure
Jillian Broadbent: the Reserve Bank director is on the board of Macquarie Office Trust
Michael Easson: the former NSW union boss is a director of Macquarie Infrastructure Group
Ian Ferrier: the highly regarded liquidator is a director of Macquarie Goodman Management
John Harkness: the former KPMG chairman sits on Macquarie Countrywide and Macquarie Goodman Industrial
Stan Howard: the PM's brother was chairman of Hills Motorway
Anne Keating: Paul Keating's sister is a director of Macquarie Leisure and Macquarie Goodman Industrial
Paul McClintock: John Howard's former staffer and Cabinet Secretary is on the Macquarie Infrastructure Group board
Max Moore-Wilton: the PM's former top bureaucrat is CEO of Sydney Airport
Gerry Moriarty: the former senior Telstra executive is chairman of Macquarie Communications Infrastructure Group
David Mortimer: the former TNT CEO is a director of Macquarie Infrastructure Group
Alan Stockdale: former Victorian Treasurer has sat on the Macquarie Infrastructure Group board

The last of the Macquarie AGMs for the year is Macquarie Leisure which takes place at 3pm in Sydney next Monday. If anyone is a shareholder or fancies wandering along for a look, please email smayne@crikey.com.au as we might have someone who'd like to ask Anne Keating a couple of questions and she's up for re-election this year.

Copyright © 2022 The Mayne Report. All rights reserved

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