Joanne Black

"One Saturday, he dropped off his mother and drove through to Foxton. He ambled along the main street, killing time. Pausing to look in the window of a real estate agency, Rod Weir & Co., he saw an advertisement for a block of land with ‘subdivision potential’ near the local racecourse. It cost $10,000. Heatley at the time would have had about $800 if he had sold his shares and added the proceeds to his Post Office savings. He opened the door and walked in. Just as Ron Jarden had taken Heatley’s call a few years earlier, so the agent took him seriously now, even though Heatley openly admitted that he was at school and had little money. But he had time and was interested in the property so the agent drove him to look at the land, which was covered in weeds and scrub. Heatley was impressed by the size of it and could see, when the agent pointed it out, how it could be turned into a residential subdivision. He could also see how he could make money from it. This, at last, was the potential for real earnings. Driving home, he excitedly told his mother about the land and its potential. She was incredulous that he would consider anything so absurd but probably comforted herself knowing that nothing could come of it because her son could not possibly afford it. But Heatley could not let the idea go. At school and in the evenings, he considered what he would need to do to create a subdivision. He contacted a surveyor and the next time Heatley went to Levin, they met. Once again, Heatley’s easy manner, his frankness in admitting this was all new to him and his ability to see past the numerous obstacles in his way gained him a sympathetic hearing. Did the real estate agent and the surveyor, perhaps learning that his father had died, feel sorry for him? Or did they simply think that if this foolish kid was prepared to risk his deposit, they might as well take it off him? Heatley does not know but after several long discussions with the surveyor about section sizes, prices, utilities and planning rules, he felt sufficiently confident to make an offer. Heatley confessed he had nothing like the $10,000 asking price. The agent said he would accept $1000 as a deposit. Heatley went to a bank to ask for a loan and was turned down. He went back to the agent and said he could offer $200 now and the balance of the $10,000 would have to wait until some of the sections could be sold. There must have been no sign of a better offer. The agent accepted the terms and with that Heatley became the schoolboy-owner of several scrub-covered acres of undeveloped land in Foxton, with a $9800 debt that he had no way of paying unless his foray into property development, about which he had so recently known nothing, was successful. What he had on his side was that the surveyor and agent wanted it to work too. The surveyor said his fees would be $1500. Heatley told him he would pay $2000 but not until some sections were sold. Debbie thinks their mother, who was always ready to stand behind her son, helped out with the odd bill. But putting in a road, sewerage, water and stormwater were jobs for professionals. He had to raise some money."

"The entrepreneurial way is to figure out your own path.’"

"For Heatley, Rainbow’s End was the third successful new business in succession but he did not pause to congratulate himself. Each success became simply more momentum propelling him towards the next venture. He has no recall of ever walking around one of the mini-golf courses with a sense of pride but only ever of thinking, how can we make this better? What else should we do? ‘I never stopped long enough. In part, the male curse in life, in my opinion, is living in the future too much. We tell our sons, “Be strong, don’t cry, you need to be the breadwinner, you’ll be the one who provides for your family,” and all that. By definition those things are about the future, so subliminally males are taught to live in the future and I was an extreme example of that. I was always thinking about the future and never taking five minutes today to say, “Well, that’s pretty good.” It took me about 45 years to work this out. I was always running towards something bigger. And that was true right through the eighties.’ As a boy depositing his paper-round money in his Post Office savings account, he had chafed at how slowly his savings were accumulating. Now, having successful small companies was also not enough. He was looking for acceleration and his timing could not have been better."

"The threat of the float being kiboshed never became public but it caused two weeks of great anxiety behind the scenes amid furious letter-writing by both parties’ lawyers. Heatley was affronted on behalf of his friends. Although he and Sheffield were just getting established, Tapper and George’s reputations were impeccable. But the official held a powerful position and because the market already knew that the float was imminent, if Rainbow’s partners could not persuade him that the company’s forecasts were genuine, the float would have to be cancelled. If that happened, the partners’ names might forever be tainted by the association."

"The leisure business was providing a healthy cashflow but Heatley was already looking farther afield. While one of the main reasons for floating had been to raise money to pay back high-interest borrowings, in the back of his mind he had hoped that if the park was successful it would embolden his colleagues to consider other investments. He and the other directors knew that the leisure industry had a natural cap in a city with a relatively small population. It was hard to see what more could be wrung out of Rainbow’s End. In July 1986 the leisure side of the business was split off as Questar Corporation, which planned to look offshore for further sporting/leisure and tourism opportunities. It was majority-owned by Rainbow but listed separately on the stock exchange. An ill-fated foray into commercial property, Rainbow Properties, which developed the Majestic Centre in downtown Wellington, was also spun off from Rainbow with Ken Wikeley as managing director."

"Beazley had lived in Hawaii for a year as a teenager and after the others returned to Auckland, she and Heatley went on to Maui where Heatley stepped off the plane and fell instantly in love with the island. Despite Beazley’s sense of foreboding at the Rainbow’s End launch, the relationship seemed to be going strongly. ‘I found Craig very easy to live with on a day-to-day basis. He was a live-and-let-live person and I didn’t have to be anyone other than myself to please him,’ Beazley says. Her instinct was that, deep down, they both wanted the same things, which were, eventually, children and a strong family unit. Certainly, Heatley thought he would marry her. It never occurred to him that they would not always be together."

"The naturally contemplative Heatley, now a newly minted millionaire, was wondering what life was all about. The question has occupied him over the years, though his answer has not significantly changed. ‘My answer is that life is about love, laughter, relationships, experiences, family and friends. That’s the essence of life to me and, in the most basic sense, none of those require money. I know it makes life easier and it gives you options, but the best experiences that I have had in life are experiences or moments shared with someone else.’"

"After Heatley’s first call, Linton lay awake thinking about roller coasters. ‘What were the rules? There were none. I loved that. You could invent them.’ He devised his own ‘acceptability measure’ for rides on roller coasters, making up a 0–10 scale to rate the thrill factor and the re-ride factor. The search took the trio around Western Europe and Scandinavia where Heatley would talk to manufacturers about cost, Forrest would look at technical specifications and Linton would judge rides by his own instincts but also by watching the patrons, rating their responses by their expressions and their animation when he could not understand the language. He was a master mariner, commercial pilot and a cross-channel hovercraft captain, so had a good understanding of physics and engineering."

"‘So now it gets heated. They send us a note back saying, “The deal’s done and you’re too late and we’re not interested.” Now I ⁠*know* there is something strange going on because if you were going to sell your house for $300,000 and I come along and offer you $350,000, you would take the $350,000 but they just said no. They didn’t even say, “Let’s have a meeting, let’s discuss it.” If they’d been smart they would have engaged with us but it felt to me that Bob Matthew had just taken this adversarial attitude, which seemed personal about me though I don’t know why.’ Again Heatley picked up the phone to Rainbow’s lawyers, who agreed to seek an injunction in the High Court against Rothmans’ sale of its New Zealand business to its Australian counterpart.⁠"

"At that time, there were many examples of the market mispricing public companies, with share prices either too low or too high to be justified by the respective company’s value. It still happens today but it was more frequent in the eighties for a number of reasons. Identifying which stocks were mispriced was key to Sir Ron Brierley’s success. He and his team picked over the data of companies, looking for a mismatch between their real value and the price of their shares. ‘That’s been Ron Brierley’s modus operandi all his life,’ says Heatley. ‘I’m not as clever as him, and I’m not an analyst but some of those mismatched prices were obvious.’"

"In the heat of the animosity, Brierley’s executives were astonished to open the daily newspapers one day to find a full-page ad placed by Rainbow. Printed in large type were two quotes from Paul Collins, one from November 1986 saying that Brierley’s would not buy into Progressive and one in March 1987 saying that Brierley’s had just bought into Progressive. The headline, in an even larger font, simply said, ‘CONFUSED?’ This was followed by the text, ‘We don’t blame you.’ The ad went on to say that the ‘recent activities of BIL regarding the merger of Rainbow and Progressive have created confusion where before there was harmony and accord’. Shareholders of Rainbow and Progressive had approved the merger, the ad continued, which had also been assessed by independent consultants and considered fair and beneficial to the shareholders of both companies. It ended by recommending shareholders call their stockbrokers for further advice. Collins had seen nothing like it before in New Zealand. While corporates in the United States and United Kingdom sometimes engaged companies to do proxy solicitations and to make direct pitches to shareholders and potential investors, it was almost unheard of at home. Heatley was breaking new ground."

"The crash changed people’s perceptions of their wealth, though sometimes it took a while for them to understand the new normal. Before the crash, Grieve recalls hearing from a director of Chase Corporation who wanted to buy a boat. Instead of borrowing, the director had decided to sell some of his company shares to fund the purchase. Grieve bid him $6 a share, and the director sold 200,000 of them. A few months later, Chase shares were valued at $10 and the director said, ‘Grieve, because of you I have the most expensive boat in Auckland Harbour.’ Then the crash came and Chase was wiped out. ‘Nine months later I met the same guy at a function and I said to him, “Because of the crash you now have the cheapest boat in Auckland Harbour.”’"

"Heatley’s brief attempt at retirement was too late to save the relationship. And after six weeks of reading books and playing golf, he was bored. Despite now living in a luxurious house in St Heliers, his first designed by Pete Bossley, and being able to buy any car he wanted, in the aftermath of Rainbow he felt flat. Making money and having any lifestyle he chose had been a dream since boyhood. It had come true, but it did not feel as good as he had imagined it would. All his life he had been striving and to suddenly stop felt strange and wrong. He still played sport but part of its pleasure had been the break from work and it was not sufficiently fulfilling by itself. He continued to watch the desultory sharemarket, dabbled in it when he saw opportunities, and lost money but nothing filled the gap. Nothing seemed how it used to be. In addition, the phone stopped ringing, which showed him that most of his callers had not been ringing because they were friends but because they wanted something. The essential element of fun, he already knew, was not money but other people. Most of his friends were working and had other commitments. They were not on tap for him."

"‘Looking back, perhaps I was not only underwhelmed by the things that Craig could now purchase but I was not really cognisant of the extent of his achievements,’ she reflects. ‘He needed more recognition from me. Maybe I was envious. After all, I too wanted to make my mark on the world, but too much attention was going into supporting his dream. It became, for me, reminiscent of my own family with the driven and business-oriented father and the emotionally needy mother. Everything in Craig’s world had become about business and sport. He was thinking business and tactics twenty-four seven and I kept asking myself, What about me?’ He did not understand her fury when she discovered that a gold bracelet he gave her for a birthday had been bought by his secretary."

"All his life he had been striving and to suddenly stop felt strange and wrong. He still played sport but part of its pleasure had been the break from work and it was not sufficiently fulfilling by itself. He continued to watch the desultory sharemarket, dabbled in it when he saw opportunities, and lost money but nothing filled the gap. Nothing seemed how it used to be. In addition, the phone stopped ringing, which showed him that most of his callers had not been ringing because they were friends but because they wanted something. The essential element of fun, he already knew, was not money but other people. Most of his friends were working and had other commitments. They were not on tap for him."

"Initially, the trio began investigating replicating the live horse racing that Jarvis had seen in Australia but the more they examined what was happening overseas the more they began to focus on pay TV and, at the same time, the new industry of mobile telephony. Heatley and Jarvis went to Hong Kong to talk to Hutchison Telecommunications, owned by Hong Kong’s wealthiest man, Li Ka-shing. Jarvis and Heatley were interested in how they might get into the mobile-phone industry in New Zealand but it was heavily regulated and, once again, controlled by Telecom. Hutchison was interested in pay TV, so the discussions were useful."

"There were dilemmas everywhere the novice Sky team looked. What if the government changed its mind and the frequencies were never tendered? What if they were tendered but Sky lost the bid? Or won it but had nothing to broadcast? But if they signed up pay TV rights, then lost the bid, the money they had paid for content would be wasted. Would their chances of signing up rights, and winning frequencies, be enhanced if they had a demonstrable physical base? But what if they paid for a base, then did not win the frequencies or could not obtain the rights or both? However they looked at it, there was no way of escaping significant financial risk. On top of that, apart from Jarvis’s early discussions with Kerry Packer’s Channel Nine in Australia about televised horse racing, none of them knew how to go about signing international broadcasting rights for a TV company, let alone one that was not yet on air. The one outcome they did not consider was what might happen if they set up pay TV and not enough New Zealanders were willing to pay for it to make it viable. But as David Grieve observes, Heatley has an ability to look past problems. Grieve remembers that in the post-crash environment when people were being much more cautious in their spending, Heatley paid $2 million for a property at O’Neills Avenue in Takapuna. ‘He always seemed prepared to move forward, rather than move backwards.’"

"Heatley and Jarvis developed a matrix of who, around the world, owned the rights to all the products that they thought would work on the three channels they were proposing. But it was no longer a matter of Heatley simply picking up a phone and calling. This was different. Heatley and Jarvis learned that, far from their first impressions, the ‘worldwide’ media industry probably boiled down to about 20 influential people controlling most of what a company like theirs wanted. It was a global family, and one in which Heatley and Jarvis knew no one and no one knew them. They had to establish their bona fides and convince people they did not know to have faith in the future of a TV company that was not yet on air in a remote market about which many people overseas knew nothing. Beyond the existence of Television New Zealand there was, at that point, not much else to know."

"Learning how they operated, Heatley became determined that Sky would stagger the lengths of its contracts to prevent the studios acting in concert when the contracts expired. They might share other information but it appeared to him that the studios did not share information about the end dates of the contracts they were signing. That allowed Sky to do a three-year deal, which was about the norm, with one studio, while another was four years, and another five. When the contracts expired, he hoped the staggered terms would make it difficult for the studios to demand a huge hike in fees in order to renew at a time when Sky would be beholden to them. The strategy worked. By the time the contracts were renewed in the nineties, Sky had credibility and more bargaining power and it could deal with each studio individually on its merits. However, getting past the danger zone proved far more protracted and precarious than Heatley and Jarvis could, at the time, predict."

"With a staff of 200, all being paid out of shareholders’ funds and bank loans, Sky finally went to air on 18 May 1990. Initially, only Auckland could receive the new service though by August, Waikato and Tauranga households could get it too, and by the end of the year it was available in most of the North Island. For Heatley the launch meant relief rather than euphoria. He, Jarvis and Green had achieved a huge amount. They had done what they had set out to do. They had built a TV network from scratch offering international channels and up-to-date choices that New Zealanders had never before had, but pre-launch subscriber sales had not matched predictions and the drain on shareholder funds was unabated. By the time of the launch Heatley’s shareholding was about 40 per cent of the company and Jarvis’s was 14 per cent, reflecting how much of his own money Heatley had had to put in. TVNZ had about 25 per cent, Gibbs and Farmer’s investment company Tappenden had about 18 per cent and ESPN’s shareholding had been diluted to 1 per cent."

"‘It’s standard negotiating practice,’ says Gibbs calmly, thinking back on the episode. ‘You come to a deal, do due diligence and then say to the customer, “Oh, hell, I didn’t know that the debtors were running three days late and that the ink was low in the inkwells and there were a couple of other things that were a bit nasty actually, mate, so I don’t think I’m prepared to offer that much now, let’s call it $80 million,” type of thing. I’ve been through that enough times to know that it’s just a game. But Craig wasn’t in a position to put more money in. He may even have borrowed against what he had. I haven’t a clue, but I did know that he wasn’t in any position to go very far without getting this deal. We had play money in there, but he had all his capital.’"

"On the eve of the 1995 World Cup final, the chairmen of the South Africa, Australia and New Zealand rugby unions called a press conference to announce the formation of SANZAR (South Africa, New Zealand, Australia Rugby) and to make the shock announcement that Rupert Murdoch’s media empire, News Corporation, would pay US$555 million over the following 10 years for exclusive rights to televise all international rugby tours to New Zealand, South Africa and Australia and a new competition between franchises that would be established in those countries. It was an astonishing sum of money for a code that had had no TV sponsorship until then. The figure stunned not only the rugby community but other sporting codes too. A final clincher in Murdoch’s enthusiasm seems to have been watching All Blacks star Jonah Lomu’s explosive game in the World Cup semi-final against England. Murdoch executive Sam Chisholm—who had helped open doors for Heatley and Jarvis when they were first signing up TV rights for Sky and who Murdoch had headhunted from Packer’s Channel Nine—says that in a call after that match Murdoch told him, ‘This is amazing. We’ve got to have that guy…’[5](private://read/01jectdbce729daxqkxt7cbe8r/#mn38)"

"In 1994, Hart was approached by Sky’s marketing manager, Peter Scutts, with the rudimentary outline of a semi-professional Australasian rugby competition that Sky was proposing. The idea seems to have been for an eight-team competition—six teams from New Zealand and two from Australia—with Sky paying the Australian Rugby Union and New Zealand Rugby Football Union for television rights. The unions would in turn pay the provincial unions, who would pay the players. ‘Sky led the way, in my view, in looking at what was a realistic approach to professionalism,’ Hart says. He was in a difficult position—sitting on the board of the Auckland Rugby Union, which was opposed to professionalism, but keenly following any developments so the union was forewarned if a professional breakthrough was imminent. He talked to the ARU chairman and they agreed Hart should stay close to Sky. ‘The Sky story, which really is a sports story, said that rugby was crucial to Sky’s future and they wanted to be part of the evolution of the game in a way that would help secure the game’s future,’ Hart says. In the end, Sky’s proposal was overtaken by events."

"Half an hour later the TVNZ team returned. Downey talked to them about contract law, about the nature of offer and acceptance. ‘This morning we made you an offer and you did not accept it so, to clear the air and make sure of exactly what we are saying now, that offer is gone because you did not accept it,’ he said. ‘We are starting again.’ In a brilliant deal for Sky, by the end of the negotiation TVNZ agreed to pay $5 million over three years—the same cost of Sky’s full package of rights from News Corp over the same period. ‘The beauty of the story for us,’ says Heatley, ‘is that for the first three years that Sky had wall-to-wall rugby, and while our subscriber numbers went through the roof, it cost us nothing. In exchange for a package of delayed rights and nothing live, we got TVNZ to pay us the same amount of money that we were paying Murdoch. I don’t want us to sound like smartarses, because I don’t mean it like that, but if TVNZ had been willing to pay that amount to News Corp, TVNZ could have won the exclusive rights for itself. But for various reasons the board of a government-owned company is a lot slower than the board of a private company. So instead of getting the rights itself, it had unknowingly just agreed to pay the full cost of us getting them.’ Ironically, just as Sky’s board had gone into the negotiation feeling under pressure from the government because Sky had the full package of rugby rights, TVNZ’s board had probably gone into the negotiation also feeling under pressure from the government because TVNZ did not have any rights. Board members may even have thought their jobs could have been on the line. After all, if the prime minister was angry that the live games were all going to be on Sky, how much angrier might he have been if TVNZ had emerged from the negotiations without even delayed coverage rights? For Sky, the deal was a triumph. ‘We felt very happy. It was fun,’ Downey says."

"Back on the island, Heatley has brought his son Josh and some of Josh’s friends up from Auckland. They head off to play pool, though if Josh was with only his father, they would most likely first play chess. No chance for a competition slides by the pair. If they swim in the surf, they compete to see who can bodysurf furthest up the beach. They are keen on poker. In their Auckland house, at Maui and here on Moturua, chessboards are always set. Josh maintains in his head a lifetime tally of thousands of chess games with his father. The wins are, for now, slightly in his father’s favour. Cut-throat competition is the norm between Heatley and his sons. The Takapuna house where the children grew up had a tennis court adjoining the neighbour’s property. Ben, the eldest of the four children, recalls his brothers, his father and him playing tennis. ‘And, hell, those poor people next door! The moment we’re on the tennis court it’s all on, all of us yelling and all of us arguing because each of us wants to win.’ More often than not, the matches would end with two people not talking to each other. ‘But the next day, we’d put it behind us and do it over again.’ His sister is competitive too, he says, but displays it differently."

"‘Overall it was a masterclass in evasion and avoidance, of speaking without saying much, of being elliptical, of answering questions but often not the questions he was asked,’ wrote John Hopkins in *The Times* the following day.[5](private://read/01jectdbce729daxqkxt7cbe8r/#mn56) He credited Woods, and indirectly Heatley as host, for not censoring the questions. While Hopkins said he would have liked the press conference to have run for longer, Woods had answered nearly 50 questions and looked each journalist in the eye as he did so. Still, Hopkins was sceptical about Woods’ responses. ‘Did he really convince us that he was genuine in his contrition? Not really. Did he address the key issues? Not really…It is not too much to suspect that after Woods had left the room he clenched his right fist and pumped the air. He had talked without saying very much…He ducked, he weaved, he blocked. Tiger Woods had pulled off another miracle shot.’"

"There is a final factor in his thinking about investing which neither he nor anyone else can do much about. It is the significant part played by luck. Good luck has made some investors rich, and bad luck has broken others. Heatley says he is living proof of the maxim ‘It’s better to be lucky than smart.’ His own first lucky break, he reckons, was that spell of good weather in Easter 1980 when he and John Sheffield opened Lilliputt in Taupō. Heatley was lucky again that overseas investment in the media had just been permitted, enabling Alan Gibbs to approach the Americans to invest in Sky, in 1991. It was third time lucky when rugby union turned professional in 1995, when Sky was in a better position than its competitors to sign up the live broadcast rights."

"‘It took Mike’s death and that moment on the plane for me to realise that the most valuable thing that each of us has is not money, is not cars, is not assets—it’s time. But none of us knows how much of it we have. None of us knows what will happen tomorrow and given the most valuable thing we have is time, then how we use it is important and, to me, the most important thing in my life is my family.’"

"He cautions against investors having such faith in their own judgement that they hang on for too long to investments that are losers including, sometimes, their own companies. A successful friend of Heatley’s dumps any investment that has dropped in value by 10 per cent. ‘He rides his winners and cuts his losses and that is much easier to say than to do. Generally, people tend to think they are right, and one of the biggest mistakes people make is that they hold losing hands for too long. Once you’re emotionally invested, it’s tough to make rational decisions. Always be prepared to admit that you might have been wrong.’"