Kerry Stokes

"It had been a patchy few years for Seven. Now Leckie could get on with running television and Stokes could take care of ‘big picture’ business instead of trying to run the network in spare time he didn’t have. The era of the playing coach was over. By late 2003 everybody was back in his or her true position. Stokes was preoccupied with the looming C7 legal case, while his new network boss was laying the groundwork for the comeback of the decade."

"In late October 1987, as fortunes were crashing all around him, Stokes was reported to be one of the few millionaires buying art at Christie’s first post–financial crash art sale. He paid $8000 for a rare letter relating to Australia’s discovery and $6000 for an early map of the country, as well as record prices at auction for works by William Dargie, Leonard French and Albert Namatjira. A week later at Sotheby’s he bought another Leonard French work, and one by Arthur Boyd. Stokes had arrived on the other side of the crash with his fortune, and his reputation, intact, cashed up and ready to benefit by picking over the wreckage of others’ empires. In January 1988, he bought a St Georges Terrace building from the West Australian State Superannuation Fund for $20 million. On 20 October he moved offshore, buying a $212 million office block in Dallas, Texas, and announcing plans to build another, each the size of the premium properties in Sydney. The next year he bought the Perth Entertainment Centre and 40 per cent of the Perth Wildcats basketball team."

"‘Shock and awe’ is how one commentator described the announcement made by the Seven Network in February 2010.16 In theory the board of the company had, ever since the Kohlberg Kravis Roberts deal, been searching the world for good investments. Instead, much of the money had been used to buy back shares in the company itself, which had increased Stokes’ control. More had been spent on Consolidated Media Holdings and West Australian Newspapers. Now, the company announced, it had decided that the best way to spend its cash was to buy WesTrac from Stokes’ private company, ACE. Under the deal the Seven Network would pay $1 billion in shares for WesTrac, and take on the company’s $1 billion in debt, using $600 million of the remaining cash in the company to pay it down. The new merged company, Seven Group Holdings, would own the Seven Media Group with Kohlberg Kravis Roberts. It would be a conglomerate, bearing the Seven name but with little to do with the original business. Stokes would own 68 per cent of it. Once again, the equity moved closer to Stokes, and the debt – accrued by WesTrac during its fast expansion in New South Wales and China – further away. One investment adviser service described the situation pithily. ‘So after three years of searching high and low, the directors [of the Seven Network] have come to the conclusion that the very best investment opportunity is the acquisition of WesTrac.’ Under the heading ‘Sarcastic Remark Warning’, the service’s newsletter said, ‘The new combined media investment and heavy earthmoving company will be renamed Seven Group Holdings Limited, presumably a reference to the seven seas sailed by independent directors in their search for investment opportunities before stumbling onto the perfect one in their boss’s backyard.’"

"Stokes continued to look beyond shopping centres. Planning and building regulations were multiplying faster than the population. The fun had gone out of it, and while there was still money to be made, the golden days were over. Having founded CPI as a public company, in 1977 Stokes and Bendat decided to privatise – but through a strange mechanism. Instead of the pair buying directly, their associated private companies, Retford Pty Ltd and Villaro Pty Ltd, employed a mining company, North West Mining NL, to make a takeover bid. The money for the takeover was raised through a loan organised by North West from the merchant banker Hill Samuel, which later became the Macquarie Bank. The loan was to be repaid by declaring a dividend funded from revaluing the shopping centres after the takeover deal was complete. The complicated deal was put together by Geoffrey Cohen, for years Stokes’ corporate lawyer, and director of many of his companies. Also acting for the pair at this time was David Gonski, then with the law firm Freehills. A key feature of the Stokes–Bendat success, as it had been with that of the Stokes and Merifield partnership, was their ability to hire the best advisers and work closely with them. Why was the deal done through the proxy company? Stokes later told journalists there was ‘nothing untoward about it’. The reason had been legal problems to do with tax and capital distribution. ‘It would not have been possible without the interpositioning of another public company.’8 It was less than a complete explanation. Retford and Villaro were trust companies, and the beneficiaries of the trusts were members of the Stokes and Bendat families. The directors were Cohen and a chartered accountant. Stokes and Bendat did not technically control the companies but had the power to appoint and remove their trustees. In fact, they were clearly their companies, used both for this transaction and for their interest in South Western Telecasters. When it came to CPI, Stokes and Bendat were selling their shares to their own associated companies and asking other shareholders to follow. It was effectively a related-party transaction but without the level of transparency that would have been necessary if the deal had been done directly, rather than through North West. The offer document declared that the shares would ultimately be transferred to Retford and Villaro, and it also disclosed that Stokes and Bendat had ‘an association’ with those companies but was less than completely transparent about the nature of the association."

"In 2011 it was announced that West Australian Newspapers, once a cashed-up, debt-averse and conservatively managed local newspaper company, would bid to take over the whole of the Seven Media Group, in a $4.1 billion merger, creating a new entity called Seven West Media. Stokes controlled both companies, and the deal was yet another immensely complicated related-party transaction. Market analysts agreed that this deal made more sense than the previous merger of earthmoving equipment and media assets. It would bring newspaper and television assets together. The immediate spur was almost certainly that Stokes’ private equity partner, Kohlberg Kravis Roberts, wanted to sell off its investment, having done no better than break even. The deal allowed Stokes to consolidate all his media investments in one vehicle, while allowing Kohlberg Kravis Roberts to leave its Seven Media Group investment without Stokes having to use his own money to buy them out; the money was coming from the West Australian Newspapers balance sheet. The deal meant that $2 billion of debt went into the listed West Australian Newspapers, now reborn as Seven West Media. Kohlberg Kravis Roberts would receive $920 million for its stake, and would be left owning just 13 per cent of Seven West Media, a stake it sold in 2013. The deal gave the Stokes-controlled Seven Group Holdings Ltd increased control of West Australian Newspapers – from 24 per cent up to 33.6 per cent. Once again, debt shifted down the corporate structure, further from Stokes’ private interests, while he increased his equity and control. Financial journalist Alan Kohler described it as ‘deal-making 101 of the Kerry Stokes business school – gaining control of a company without the inconvenience of paying a direct takeover premium’. It was, said Kohler, ‘just about the high-water mark of complicated related-party transactions in Australian corporate history’.24"

"At the same time, he was investing in Pacific Film Laboratories, which was giving Kodak a run for market dominance by employing what was then the latest computer-assisted processing technology, as well as giving away free film to those who took photos there for processing. In 1982, he made a takeover offer for the company. This, too, became owned by ACE, and after the takeover Stokes changed the board so it had largely common membership with Australian Capital Television. Stokes took to referring to the different interests ACE held as ‘partners’, with the relationship between them and ACE ‘not that of control but rather cooperation’. He clearly saw all kinds of potential for collaboration across media and photography. Pacific Film, however, did not last as a Stokes investment. In 1985, he sold out to Kodak, ahead of the dominance of the domestic digital camera, the minilabs for processing on each street corner, and all the changes that transformed photography forever. ‘I lost a fortune,’ he told The Bulletin in 1991.9"

"In the years that followed he shuffled the deck of his assets in a series of big, complex, related-party transactions. The effect, in every case, was that the debt ended up further away from Stokes’ private interests, while his control over the assets was tightened. In all this the independent directors of his public companies – including Dulcie Boling, who had once been Murdoch’s nominee, and Peter Ritchie, the former head of McDonald’s Australia – raised no public objection."

"In 1972 Stokes was travelling overseas to seek investment. Soon the Hong Kong and Shanghai Banking Corporation was involved as a shareholder and provider of mortgage finance, and a group of investors from Bermuda were represented on the board. So began a pattern in Stokes’ business career: shuffling assets between public companies he controlled and his private companies, always with the result that he increased his personal wealth. Those who knew them at the time say that Stokes and Bendat were on a learning curve. ‘It would be, “Oh, can we do this?” They didn’t really have a strong sense of the rules, but they both learned fast.’ The 1972 CPI report shows that the board approved the purchase of Dianella Plaza from a Bendat and Stokes company. ‘The Chairman, Mr Bendat, and the Managing Director, Mr Stokes of CPI, are also directors of the vendor company, and because of the situation, both abstained from voting in the Board’s decision to acquire this project.’"

"Apart from the brief period when CPI had been a public company, Stokes had always liked to hold his wealth in private companies, and he continued to prefer it in the years ahead. Naturally private and suspicious, he put as little information on the public record as he could get away with. Rather than ‘pyramiding’, like so many entrepreneurs of the 1980s, in which complex public company structures kept control in a few hands with little cash laid out up front, Stokes at this time used public companies only when he needed to raise big capital, or when he had little choice. He liked control, he liked prudence, and he liked privacy – none of which has prevented him, in more recent times, from dealing ruthlessly with the public companies he has controlled."

"Perth FM radio was a source of effortless cashflow for the Bendats and the Stokes, but their involvement was as investors, observers and learners rather than managers. Treasure ran the station, and as directors Stokes and Bendat attended board meetings, listened and learned. ‘Brian Treasure taught me everything I know,’ Bendat has said."

"quoted Stokes as saying, in reply to a question about his origins, ‘I am a beginning, not an end.’"

"Stokes had managed to ingratiate himself with Caterpillar management in Illinois, convincing them that he was the kind of ethical, principled businessman their company required. The relationship has only deepened over the years, making WesTrac, the Stokes company that owns the Caterpillar franchises, the most reliable contributor to his wealth."

"They were down and I was up. I saw an opportunity as a businessman, if I had the right people and let them run it.’17 It was clear, though, that the Bunbury group"

"‘I’ve never really thought about money,’ he told the journalist, who noted the leather furniture, the blue carpet and the original art on the walls. ‘You do what you do and if everything goes right you make money. Money should not be your primary objective. It should be a by-product of something you do better than anyone else.’ It was a claim Stokes made many more times in the years to come, no matter how often his actions belied his words. Stokes made it clear that he had bigger plans – that this was the start of a media empire. ‘I have made no secret of the fact that if legislation is changed we are interested in expanding our activities in the media. That doesn’t mean we’ll take on just any old radio or TV station. They will have to meet our criteria.’ The criteria, said Stokes, were that they should ‘entertain and also be the catalyst for change’. What change he wanted to see was not clear."

"He had not, for the most part, built businesses from the ground up. He was not a creator of new enterprises. Rather, he had done deals, cultivated relationships, capitalised on booms and aggregated money-earning assets. His great talent was that he could see ways of structuring a deal or a business enterprise that looked obvious in hindsight, yet which nobody had hit on before. He sensed a boom well before others. He had weaknesses, both in capacity and in emotions. Particularly, there was a lack where most of us have a sense of identity and place. He was a hoarder, a gatherer around himself of objects. He liked acquisition. Yet he also had an ability to reconfigure, and to move on when self- or business interest required. He was unlike Murdoch and Packer in that, when it came to business, he was mostly unsentimental. He saved sentiment for the art collection. Which is not to say he was unemotional. There was a chip on his shoulder, an abiding sense, despite his wealth and power, of being hard done by, and a determination to take it up to the establishment. But with all that he was good fun – laconic and outwardly even tempered. His employees liked him, and most were steadfastly loyal and well looked after. He was a dealer, rather than a manager, but he made up for any lack by the quality of the people he hired as his closest assistants, and the manner in which he kept them close."

"giant he recalls only as ‘Clarrie’ took him under his wing. Clarrie was, according to his protégé’s haphazard memory, a barrel-chested bull of a man ‘about six foot four’, originally from Tasmania. He wore a boiler suit buttoned to the neck and a porkpie hat, was the strongest man in the crew and reputed to have once been a champion shot-putter. This made sense, because he appointed himself as the wayward teenager’s coach. Clarrie wasn’t your average itinerant labourer, and he must have seen the spark of something better in the boy too. ‘He took me aside and told me I had a foul mouth and since my vocabulary was so poor I used to cover this by swearing. He told me I had one choice: his way or a clip over the ear and if that didn’t work he’d slap me around a bit. Clarrie always got his way without having to fight anyone. I was very impressed.’ The giant Tasmanian’s way was a small Spirax notebook, a pocket dictionary and a pencil. His instructions were to learn three words a day well enough to put them into a sentence that made sense. ‘He said he didn’t care how I wrote something so long as I knew what I had written,’ Stokes would recall. ‘Every time he heard me swear he kept his promise and I’d get a slap over the head — on one occasion a short right to the face that put me on the ground with the taste of blood in my mouth.’ Another time, Clarrie heard him swearing and said, ‘Give that dictionary back to me. It cost good money.’ The boy got the message. The three-words-a-day routine became a habit. It seemed Clarrie had picked him for a self-improver. When the season’s work ran out in the wool stores, Clarrie and some of the others joined a small shearing contractor’s team. Some could shear; others would be shed hands and rouseabouts. Clarrie suggested there might be room for Kerry in the team, so he went. It wasn’t until a long time later he worked out that Clarrie might have kept an eye on him because he knew Matt."

"He has what New Zealanders call mana, a short word long on meaning: the clout, charisma and credibility of the chief. It can’t be faked."

"poverty pinched harder in other ways, such as being short of cash to feed the coin-in-slot gas and electricity meters in the house. Coin-fed meters were probably a better system for the hand-to-mouth lives of the poor than today’s forms of credit that lead to mounting bills. ‘Gas was threepenny or sixpence,’ says Stokes, miming feeding the hungry meter. ‘Don’t worry about credit — it just stopped!’"

"Instead of driving to and from the office by the same route the way most people do, he took different ways every week so he could see fresh country and opportunity. One morning he detoured through Thornlie and saw ten acres for sale. There was water lying on the ground after heavy rain, which would explain why no one wanted to buy the land, even at £150. It looked swampy and the low price might make buyers even more wary. But Stokes saw something that the merely prudent didn’t. He realised the block was not particularly low-lying, and went to the Lands Department and asked to see hydrologic maps of the area. These showed that the water table was not high at that spot: the surface water covering the block was only run-off, and would soon dry out when drains were dug on other land being developed nearby. He bought the land for £100. Six months later, new drains had solved the problem and he sold the land for ‘a couple of thousand’. Multiplying his stake twenty-fold was good but the lesson learned was better. After that, he always had an eye open for waterlogged land that could be fixed — ‘meaning it was a drainage problem not a water table problem’. That knowledge would lead him three years later to a 50-acre paddock in the Kalamunda hills that was going cheap for the same reason. By the time he had it paid off he could afford the fix — huge trenches deeper than the clay subsoil."

"Beyond the timeless equation of supply and demand were the many but sometimes predictable variations in human nature. The man who splashes out on a crayfish is at heart much like the one buying a sports car, a penthouse or the biggest boat in the harbour. He’s a buyer with money burning a hole in his pocket — he has already displayed a tendency for impulse buying that can be tapped again."

"Adamson mentioned to Stokes that at the top of every profession were chief executives who spent most of their time ‘communicating ideas to someone else’. What mattered most was to communicate well; specialists had knowledge but the communicator was king."

"‘You never told anyone what you got or what you had, as there was always someone waiting to take it from you.’ This lesson would stay with him long after he left the streets behind."

"‘I didn’t have the affection and support of a big family, but that meant I was not distracted. I had focus. I rarely started anything I didn’t finish.’"

"‘When the market thinks your business is worth more than you do, go public. When it goes the other way, buy it back.’ It’s a variation on the real estate maxim of ‘buying right’ that he’d learned in his early days in Perth."

"But he also had something not all salesmen did: the gift of seeing things not just as they are but as they might become."

"‘Stop thinking about yourself and focus on helping solve someone else’s problem and you’ll make money.’"

"In 1962, it was known as ‘buying on the never never’. It didn’t worry him while he was earning enough to meet the repayments because he’d stuck to his rule of ‘buying right’. He reasoned that resale value looks after itself if you buy cheaply enough. It would become his signature: to see a bargain where others didn’t — and to sell out before the pack."

"Stokes encouraged him to study positive thinking techniques revealed in the book How to Make Friends and Influence People and another called How to Succeed with a Positive Mental Attitude."

"Each experience reinforced the pattern. All his life, he would hunt bargains — and knowledge. He set out to learn how much he didn’t know, then to find someone who did."

"His greatest skill, perhaps, was in finding the right people. Or, as his old friend and long-time employee John Ashby puts it, ‘the right person finds him’."

"‘I said, “Going pretty well, Harold?” and raised the idea of a partnership. Harold said, “Maybe very long-term”, but I kept going.’ Stokes told Seymour he wasn’t after higher pay or more commission, but ‘What about a part of something?’ ‘I was expecting him to say “Five per cent”. But he said, “Finish up on Friday”. I’d just talked myself out of a job I loved.’ He later found out Seymour’s brother was returning to Perth and wanted to join the family firm. Something else struck him, too: he’d bought the same model Holden as his boss, but newer. The power of positive thinking was all very well, he realised later, but trumping the boss’s car and hitting him for a share of the business might have been a step too far. It was a hard lesson about the risks of bluffing and big-noting, one he never forgot."

"Stokes & Associates came up with an angle no-one else in Perth had: they sent out hundreds of form letters, designed to scoop up any sellers unhappy with their current agents’ efforts along with house owners who had not considered selling before. This was to sidestep the hidebound ‘gentlemen’s rules’ of the established firms represented by the local real estate body. Stokes recalls: ‘The institute got its nose out of joint because you’re not supposed to contact sellers already with another agent. So I sent out letters to everyone.’ Exploiting this loophole outraged established agents"

"Around the time Stokes had arrived in Perth, another young entrepreneur had tried something that had caught many people’s attention. His name was Alan Bond. He had bought rural land cheaply at a place called Lesmurdie, on hills overlooking the city. Bond called it Lesmurdie Heights Estate and advertised his subdivision on television. In one weekend he and his wife Eileen took so many cash deposits she would later compare it with ‘selling fish and chips’."

"They renamed the company Consolidated Properties and Investments Ltd (CPI) and listed on the Perth Exchange in the new year of 1971. Stokes was managing director and Bendat the chairman. They announced the new company would move from hire purchase to shopping centres and other development. They increased its capital from $500,000 to $5 million, with Zimpel shareholders getting two 50-cent Consolidated Properties shares for every $1 Zimpel share."

"STOKES HAD FOUND his niche: arranging finance. The series of interdependent deals involved in each new venture was a puzzle to solve, like a Rubik’s Cube in which each square represented shares or property or mortgage loans or rent worth hundreds of thousands of dollars. To keep expanding the company, they needed more money, and they were having trouble finding it in Australia."

"Stokes’s imagination bolted with him. For once, ‘sweaty palms’ were not his friend. He feared that if the old charge surfaced during the hearing, his new enemies could use it to destroy him."

"Stokes and Bendat were under pressure to perform as directors but there were compensations apart from their relatively modest fees: their private businesses thrived. They had already owned some properties before the float — primarily the shopping centres Stokes had retrieved from Merifield at the start of the decade — through family companies or other entities associated with them. Others they bought or built along the way. They had prudently sold several privately held properties as the market fell and kept, bought or set up independent service businesses that profited from running the shopping centres."

"Stokes and Bendat made their new relationship official. They took over a hire purchase company, Zimpel Finance and Investment, from an old client of Ellis Rhine’s, exchanging property and cash for a controlling interest. It was the first step towards building a public company that would buy, build and manage shopping centres."

"Potential profits were huge but the cost of buying and holding the land was too much for the pair, so Stokes devised a way to share the load with their clients. As he’d done at Spearwood, he would give a generous, non-refundable deposit — often enough for the seller to secure a house — and promise the balance in a set time, usually a year. Sellers had the security of vendor terms, meaning the title did not change hands until the balance was paid."

"The Perth Stock Exchange raked over the various entities behind North West Mining’s offer. Stokes and Bendat were linked to a 47 per cent slice of CPI shares through two other family companies, the Stokes family’s Vetlabs Pty Ltd and the Bendats’ Paulla Investments Pty Ltd (named after Bendat’s fortunate adult children Paul and Laura). As with Retford and Villaro, the issued capital of these two family companies was held in trust by Stokes and Bendat’s tax advisers, their solicitor Geoffrey Cohen and an accountant called Harrington. The stock exchange was uneasy about the ‘Russian doll’ layers of ownership and control of the various companies involved in the takeover, and whether minor shareholders had a clear understanding of what was happening. The exchange chairman noted in a public statement that Stokes and Bendat would obviously have influence over the trustees but concluded that the two businessmen did not technically control the trusts themselves. ‘Shareholders would no doubt be able to view the acceptance of the offer . . . in this light,’ the statement concluded. Turning to the valuation of the shares at $1, the exchange conceded the transaction did not need compulsory valuation by a qualified valuer or at least two directors — but stated it was disappointing that the CPI board had not sought an independent opinion of the offer. ‘Despite the controversy,’ Bill Rayner would note later, ‘shareholders voted with their hip pockets.’ On 29 June 1977, the company announced a 98.6 per cent acceptance of the North West Mining offer. Game, set and match to Stokes and Bendat."

"They were pioneers in the west, doing much the same as Frank Lowy had been doing with his Westfield group in the eastern states, which in turn was an adaptation of an American template. Tenants paid either a base rent or one calculated on turnover, whichever was greater. They also paid the outgoings such as maintenance, rates, taxes, management and insurance. If tenants thrived, so did the centre owners. Only a sustained financial downturn that squeezed daily household spending — what Stokes calls a ‘major’ in business shorthand — could hurt them badly."

"Pitching for the job in 1966, Bendat had predicted the Plaza would attract an extra $3 million to Bunbury. By 1971, it was pulling in an extra $10 million. It was the sort of ‘mistake’ they could live with, and profit from. Shopping centres were virtual gold mines — and real gold mines were good for shopping centres too. Bendat and Stokes’s next purchase for their public company was in Kalgoorlie, one of the world’s greatest gold-mining centres."

"The idea of making money by ensuring other people lost theirs didn’t appeal to him; the whiff of organised crime behind the glitter and glamour of Las Vegas and some other gambling destinations spelled trouble he thought that he and Bendat could do without. They had agreed that as long as they were partners they would not do anything that both did not support. It would be after they split in the 1980s that Bendat got his wish to invest in gaming — eventually making a reported $24 million out of a timely stake in Perth’s Burswood casino."

"THE BARE BONES of the coup were later exposed in the takeover documents required to be lodged with the Perth Stock Exchange. The two family companies that Stokes and Bendat controlled, Retford and Villaro, had borrowed $2.8 million from Hill Samuel and lent it to North West Mining. In return, North West Mining agreed to transfer 1,430,309 CPI shares each to Retford and Villaro. According to the lodged documents, the market value of properties owned by CPI on 28 February 1977 was about $21.5 million. The statement said this was more than $4.5 million above the value recorded on the company’s books. The new valuation boosted CPI’s net assets from $1.49 per share the previous 30 June, eight months earlier, to about $3 per share. At a glance, the North West Mining offer of $1 a share had seemed generous because it was more than the most recent market price of 70 cents. But it was well below the asset backing of $3 a share — which was why the Hong Kong bankers had resisted selling their holding at $1. But for unsophisticated shareholders, rattled by three years of bad news, it was a chance to get out at what seemed like a profit. After all, the company’s recent track record had been patchy: with sales from as low as 20 cents and up to 63 cents on the eve of the offer. For reasons carefully explained at annual general meetings, it had not paid a dividend for three years. Failed and struggling shopping centre developments in the middle of a recession had shaken shareholders’ confidence and here was a way out."

"DOING BUSINESS IN Kalgoorlie raised other possibilities. To Bendat, a mining town bursting with single men and where brothels and two-up were legal seemed the ideal site for a casino. In May 1972 Stokes went to an international shopping centre convention in Florida. On the same trip he toured other parts of the United States and Europe to look at gaming but returned unpersuaded. He was no Puritan and liked to gamble at games of skill himself, but it seemed to him casinos lured gullible people who lost money and hard people who preyed on them."

"Where the most money was, Stokes decided, was Hong Kong. There was a bank there with more money than some small countries. Its name was distinctly Chinese, but in 1972 the Hong Kong and Shanghai Bank was ‘the most Establishment bank you could possibly be’, Stokes would recall. As he remembers it, the sort of Englishmen who ran the bank acted as if they were defending an outpost of a vanished empire."

"On his way up, Gonski would become a corporate confidant of Kerry Packer, Rupert Murdoch and Frank Lowy, among others. But only one of his tycoon patrons ever personally picked him up from the airport, and that was Kerry Stokes. It was the late 1970s, soon after they’d met, and Gonski had been asked to Perth to work on a project he has forgotten but which was almost certainly the controversial CPI buy-back. What he has never forgotten is the sight of Stokes waiting for him in a blue Rolls-Royce convertible, as casually and quietly as if Gonski were family. ‘That never happens,’ says Gonski of the gesture. Tycoons will spend money on good help, but rarely their own time. Yet Stokes goes out of his way to include relative strangers, to make them feel wanted and ‘on the team’. Some can’t help thinking he means it."

"The decision was good news for Stokes and Bendat. The transaction got the green light and the shopping centre barons became small media players with large ambitions. They were elected to the South Western Telecasters board soon afterwards. Each denied wanting to control the company, saying it was just another investment opportunity. Stokes was quoted as saying he was surprised that outsiders like him and Bendat could spy so much potential and yet ‘so few local people’ seemed to be buying shares in the broadcaster. They wheeled out their families’ respective investment companies Vetlabs and Paulla Investments, which had been used to take CPI private not long before. Between them the two companies bought a block of 500,000 South Western Telecasters shares, which was more than 20 per cent of the broadcaster. By then other companies associated with them had already crept into the share register. By late 1978 Stokes and Bendat controlled 37 per cent of South Western Telecasters. Enough to make their presence felt in the media world."

"By then they had achieved a business structure in which the public company was the mothership supporting their private companies. The two biggest of these were West Australian Property Management Pty Ltd, which managed the shopping centres, and the ABC Building Company, which did their subcontracting work."

"‘If you use the media to grow it will eventually destroy you. If you don’t use it, you don’t lose it. Banks and the people I deal with don’t want publicity.’"

"‘Out of problems come opportunities.’"

"The only test that matters, on the ground or in the boardroom, is getting past the umpires, which the North West Mining buy-out did. Stokes would not always be so…"

"IN THE NEW year of 1978, Stokes and Bendat decided to sell the Bunbury Shopping Centre, by then owned by a subsidiary of CPI. It had been Bendat’s first building venture in his adopted country but he wasn’t sentimental. The centre faced increased competition. It was nothing the pair couldn’t handle but they had other plans. They wanted $1.5 million to sink into ‘new ventures’, a local newspaper reported that summer. In fact, what they wanted was in plain sight of the shopping centre."

"By 1979, the Superannuation Fund’s executive had decided it should cut out the middlemen and become a player. They wanted to own shopping centres themselves rather than lending to those who already owned and managed them. The stakes were higher but so were the potential rewards — or so they imagined. Stokes had been looking around for companies to buy himself. But the superannuation fund’s appearance in the market as a self-managed group, waving a metaphorical cheque book, made him consider selling instead. Everything has a price, and those in charge of the Commonwealth Superannuation Fund Investment Trust had $2 billion to throw around. They were presumably well-qualified people of integrity but they were, at best, public servants out of their depth, in charge of what an auditor-general would later sourly call a ‘milking cow’. For Stokes and Bendat, the milk was mostly cream."

"Stokes and Bendat had turned a $2.8 million loan into ‘paper’ worth $8.5 million. This gave them effective control of assets that were soon worth at least $20 million, yielding some $2 million a year in rent. It was good to buy back the farm when…"

"enemy more easily, Fairfax’s directors had sacrificed an irretrievable asset in their rush to defend the Herald & Weekly Times against Murdoch. As Stokes and the wily Ken Parker would find out, Fairfax had held a unique advantage for a decade: it enjoyed what was dubbed the ‘grandfathering’ exemption from media laws passed in the 1960s to prevent any one owner from controlling three television licences. Because Fairfax already owned interests in television stations in Brisbane, Sydney and Canberra — and what Stokes calls ‘a cobweb of interlaced shareholdings in regional TV stations’ — before the legislation was passed in 1969, it was allowed to retain the three capital city licences. Latecomers had to be content with two. By buying a 15 per cent stake in the Herald & Weekly Times to fight off Murdoch’s apparent raid, they had breached the ‘grandfather’ clause — and, in effect, would be forced to sell either QTQ-9 in Brisbane or CTC-7 in Canberra. Not only had Fairfax breached the rules, and in doing so abandoned an edge it enjoyed in the media marketplace, but it had also borrowed a fortune to do it. With Potter Partners leading the stampede, Fairfax had spent $50 million on 9.5 million HWT shares. Queensland Press had spent $20 million. Hindsight would show that in doing so they had both squandered the contents of their war chests — paying too much for newspapers that had reached their peak of influence and profitability and were now blundering towards a cliff no-one could then imagine, let alone see. Later, Stokes would link the decline of the once great house of Fairfax with this panicky response to the first Murdoch raid."

"Gonski would help Stokes with one of the most important deals of his career, one that took him into the national arena. ‘Kerry was a very loyal and wonderful client,’ he would say. ‘I never had a problem with him.’ In fact, he says, the only disagreement they ever had was when Stokes urged him to charge more for some particularly valuable advice. Stokes advised, ‘It’s not the billable hours worked, it’s the quality of the thought that counts.’ Gonski thought it an excellent philosophy and adopted it. It has proven to be a nice little earner for the prophet of profit."

"Stokes agreed. Next morning, 10 April, Stokes went to the bank’s main Sydney branch in Martin Place and picked up the cheque made out to Fairfax. He signed a receipt for it, slipped it into his coat pocket and went off to meet the waiting delegation. He had long since learned the value of silence, a tactic that originated when he was surrounded by educated and articulate people fond of giving orders and being listened to by underlings. Falkingham didn’t disappoint in this respect. Stokes’s memory of events goes as follows. As soon as they met that morning, Falkingham said something like: ‘You are going to tell me you need more time to pay.’ Stokes shrugged and made a noncommittal comment. He was happy to wait till right on the deadline. When the clock hit 10 a.m., Falkingham said words to the effect of: ‘Your time is up. I told you to have a cheque ready.’ Stokes, deadpan: ‘Is a bank cheque all right?’ He fished the cheque from his jacket and handed it over. He recalls Falkingham saying: ‘You are full of surprises. You will have a deal by lunchtime.’ The deal was closed, but they kept sparring almost to the end. ‘We had this interesting conversation, with Falkingham saying that [price] won’t get the deal done . . . and I stood there and said you have two choices: you can deal with Rupert Murdoch’s friend [Bruce Gordon] or you can do what you said you would do and sell to me at a higher price. I have not come here to be chiselled and I’ve put $1 million in good faith on the table without a contract. ‘They finally agreed they would accept my offer. And Mr Falkingham said: “Well, Mr Stokes, that gives you 30 per cent but I fear Mr Gordon’s head start [a 14 per cent holding in Fairfax] may be too much for you.”’ Stokes played the Edmund Rouse card — the option to buy the Tasmanian’s 12 per cent stake. ‘I responded: “I wouldn’t worry too much, Mr Falkingham. I already own Launceston TV shares in Canberra and that gives me 42 per cent and I’m pretty confident before this day is over I will have what I need to take it to 50 per cent.”’ And apart from a little argy-bargy with Bruce Gordon, that is the way it evolved.’"

"Pulling off the intricate share play had him thinking he could do it again. As he says, looking back on the deal, ‘There’s a pattern emerging here.’"

"The fund chairman opened negotiations by saying he wanted to buy the shopping centres at a discount. He and his fellow directors were determined that their first venture look good. The custodians of the superannuation of tens of thousands of Commonwealth employees could not be seen to do anything risky or that didn’t pay well. Stokes’s view of what happened next is that he and Bendat worked out a way to keep both sides happy. Not everyone would agree with this later. Stokes and Bendat outlined a deal that saw them get paid less upfront than the going market price, a figure based on a multiple of rent returns. Stokes explains: ‘The shopping centres were selling at a yield of about 8 per cent — roughly the value of the rent roll multiplied by twelve, so if you got $10 million rent a year then to buy the building is $120 million. But the super fund wanted to give a better immediate return to its members, so it needed a 10 per cent return, not 8 per cent. We said we’d share the future in return for giving away a bigger share of the present.’ Bendat and Stokes agreed to sell the shopping centres for ten times the annual rent value instead of twelve times — a big discount that came with some long and lucrative strings attached. Lucrative for the sellers, that was. ‘We finally did a transaction where we shared in the rental income and some of the capital growth, so that after five years we shared 50–50 in any rental increases and at the end of ten years we’d take a share of any increase in capital value.’ This arrangement would be ‘locked in’ for thirty years."

"The fund managers grabbed the discounted purchase price along with the back-end deal that meant Stokes and Bendat were betting that the market would rise. If the six shopping centres at stake did not rise in value, and rents likewise, Bendat and Stokes would have effectively given away two years’ worth of rent, which was several million dollars. This was not as much a gamble as a calculated risk. The partners backed their judgment against the fund managers’ anxiety to make the deal look attractive to its members. They were confident of the bet. For one thing, their stable of support businesses was still managing, maintaining and cleaning the shopping centres. They reckoned no one understood the housekeeping side of the business better than they"

"If Fairfax had to jettison the station, Stokes needed to know how it worked and how it might be improved before he would consider bidding for it. His rule in all things was to ‘buy right’, but the more complex the business was, the harder it was to gauge what good value might be. The elements that make up a television station are less tangible than those of a business that manages shopping centres. In the words of Bob Campbell, who would be moved on from Seven by Stokes years later, television is ‘luck, talent, alchemy and competitive disarray’; the trick is to mix them the right way. Like roulette, it’s easy while you’re winning."

"‘Owning a shopping centre isn’t an investment — it’s a business,’ he would say. Running them meant acting as a ‘super’ storekeeper managing scores of tenants, each a small business with the potential to fail and disappear. An empty store at a shopping centre didn’t just mean reduced rent returns. It was like a missing tooth in a smile: it looked bad, and had to be replaced as soon as possible to keep up appearances. For the management, it was more like running a busy hotel than being an absentee landlord. The more centres Stokes and Bendat’s company owned, the more tenants they had to manage to guard the rent return underpinning the company’s value."

"He’d come from the east at nineteen with £150 in his pocket. Twenty years on, he was going back with a war chest of more than $10 million; he owned assets worth millions, was owed many millions more, and co-owned businesses with enormous cash flows. It was the beginning of what he calls ‘one of my defining moments’."

"Stokes sensed Rouse was a man he could talk to, so he telephoned him. He knew that few are as susceptible to the promise of the easy dollar as the sharp operator. Stokes used a high-finance version of the old car-buying routine of flashing a wad of cash to whet a seller’s appetite: he offered Rouse’s company an eye-catching figure — he thinks it was $100,000 — to give him an option to buy its shares in Canberra TV at whatever price the final recommended offer was. It wasn’t hard to persuade Rouse that Rouse was the smartest man in the room and that it was natural that people would give him money for nothing."

"‘No one thought they’d need me but when the music stops I’ve got my chair — and my lunch.’"

"But in Sydney, it was clear Falkingham thought Fairfax was a cut above dealing with johnny-come-latelies from the provinces. Stokes ignored this thinly veiled snobbery but didn’t forget it. It added piquancy to the deal, which now had his total attention. Another of his ‘sweaty palms’ moments."

"To make sure there were no last-minute hitches or double-crosses, Stokes had quietly sewn up options on other shares as well as Rouse’s. Newspaper reports the next day — 11 April 1980 — indicated that he had stitched together a majority shareholding of 51.6 per cent. It was enough for total control, once all the documents were signed and sorted."

"By July Stokes had bought all the remaining capital in Canberra Television Ltd at $5.30 a share. If he was going to be a media player, he was going in full bore. He would not be accused of not putting his money on the line."

"There’s a moral to the tale, he says three decades later. When it mattered, the bank had trusted him with a $1 million advance without formal documentation because he ‘always religiously paid’ whatever he owed. ‘You only have to make the payment once so you might as well pay on thirty days. I did, and that’s why I didn’t have any trouble with banks.’ Nor with creditors, he says, who also knew they could count on swift payment."

"‘I had more publicity and more media exposure in a few months than in my previous twenty years of business,’ Stokes said later. ‘It seems all out of proportion. I paid $13 million [for CTC-7], yet about the same time an office building in North Sydney sold for more than $100 million and hardly rated a mention in the financial pages.’ It was the difference between business and showbusiness. You could get to like it."

"Rayner was delighted to have a boss who liked the business as much as he did. Stokes proved, Rayner later said, to be more builder than deal maker. ‘He always leaves things in much better technical shape than he found them’ is the way he describes the man who would be his boss for the rest of his working life. ‘With Kerry, it’s more than just money. It’s an attitude, an enthusiasm for the task, not just the business. He wanted everything clean and sparkling and happy. In fact, he more or less demanded it. He wanted to make it the best ship on the line.’"

"The station was pitched at 18- to 39-year-olds, baby boomers and their children who’d mostly grown up listening to rock music and, since 1959, watching television. Stokes, who turned forty a month after the launch, had just drifted out of the demographic. Bendat was old enough for his children Paul and Laura both to be in the target market. This wasn’t a shopping centre; they had to trust the experts they’d hired to make it work."

"Stokes didn’t want to send the old station to the knackers and start again but he did want to know how best to groom it. He commissioned Ogilvy & Mather’s Perth marketing agency to do the job. They came up with an award-winning campaign, pitched to Stokes over coffee and sausage rolls in the boardroom. The pitch was to rename the station Capital 7 and the company as Australian Capital Television, a natural play on the acronym of the Australian Capital Territory. Almost as an afterthought, the agency also suggested Stokes call his holding company Australian Capital Equity — ACE."

"Knox says the joke at Australian Capital Equity head office was that he became the ‘Minister for Crap Incorporated’. It was a backhanded compliment: he was called in to help patch up stray business ventures so they could be saved and sold or, if hopeless, quietly strangled. At Stokes’s behest, he and Parker would later also work behind the scenes to help Stokes’s oldest children, Raelene and Russell."

"Stokes says he invested in the station but didn’t indulge it. In line with his instinct of always ‘buying right’, he knew that people equipped with the right gear do a better job and have no excuse for failure. ‘I didn’t get a reputation for extravagance but I liked to invest in people. It created a buzz, and that helped generate revenue.’"

"Stokes liked both ideas. He approved a new station logo, a jingle and a series of advertisements. It cost money. So did a new one-hour news service produced in-house. This meant setting up a foreign desk, a sports desk and other innovations to bolster the bulletin with national stories the way bigger stations did in Perth or Brisbane."

"Rayner notes drily that ‘private enterprise entrepreneurs were a scarce commodity in the national capital’, which was bulging with bureaucrats and their political masters. The tycoon who drove a Rolls-Royce but spoke Holden-ute English intrigued people. He was easy to meet and hard to categorise."

"His attitude could be summed up by the builder’s maxim ‘A clean site’s a happy site’."

"Since Stokes had arrived in Perth, there had been only two commercial television channels there — Seven and Nine. For the past few years the rumour mill had been whispering that the market was ripe for a third. The key to Stokes’s bid for this third licence would be his ‘principal solicitor’ Neville Owen, who also became a trusted commercial advisor, friend and executor — ‘more than just a lawyer to him,’ says Owen. In 1983 Stokes had persuaded Owen, a partner at Robinson Cox (later Clayton Utz), to devote most of his time to Stokes’s expanding affairs while remaining with the firm. Owen would spend the rest of the decade at Stokes’s elbow, often working alongside Anthony Kiernan, a lawyer with radio and television experience. Owen had shown his natural ability and amiable nature while doing legal work on earlier media deals involving South Western Telecasters and the new radio station, 96FM. Now Stokes asked him to help draft a formal application to the Australian Broadcasting Tribunal to be granted the third commercial licence. He knew plenty of others would want it and was determined to go into the battle better equipped than anyone else. ‘I was preparing from 1983 for the [licence] inquiry in 1984,’ Owen recalls. ‘I was principal solicitor, led by Daryl Williams QC, later Commonwealth Attorney General. The junior was Michael Slattery, later a Supreme Court judge in Sydney. It really was a combined effort of lawyers and commercial people. A full-time commitment.’"

"As Knox recalls it, he and Stokes worked on diluting the costly problem of making golf clubs (in a market swamped with cheap imports) by buying into other businesses that distributed Adidas sports gear and Prince tennis racquets. Bundled together, the three businesses made one strong one, a combination that eventually snagged the attention of the Singapore Government, which backed a local firm (the makers of Tiger Balm) to invest in the dominant sporting goods distributor in Asia."

"‘Kerry’s got a multi-track mind. He’s always across the material,’ says Rayner, who paints a picture of a restless intellect with a roving eye for opportunity, of a loner who was rarely alone because he also had the knack of leadership."

"Stokes and Bendat thought they’d been patient long enough: it was time to throw the switch to profit. Stokes recalls: ‘It lost three times as much as we expected the first year and people said of course it would, because you are not selling ads! The second year it lost twice as much as the business plan said. The third year it was off to the races. We creamed it.’"

"Stokes suspected intuitively what Knox knew from experience: the best way to do business in Asia was to use local customs. ‘We were very conscious in Asia of always collecting the money [for the goods distributed],’ says Stokes. The only safe system was the Asian one of having people physically collect owed money on time, like a landlord knocking on doors for rent. The Singaporeans ignored their own hard-won wisdom and tried to introduce the latest Western methods, employing a Harvard graduate who put in an American payment system. It didn’t work. It was a lesson that when in Asia, do as the locals do, something Stokes would remember in China much later."

"‘Ken said when you come back [to Australia] give me a call, which I did,’ Knox recalls. ‘I consulted to Stokes one day a week, which developed into seven days a week.’ Seven days a week would become fifteen years — although Knox prides himself on the fact that he was never on the payroll. He was his own man, retained as a consultant."

"Stokes had raised a loan from the Royal Bank of Canada to fund the radio venture. He and Treasure prepared a three-year business plan with projected earnings. It was a nervous wait."

"The Japanese were eager to reciprocate Canberra’s hospitality. The gesture of making Canberra and Hiroshima sister TV stations would have done, but the President of Sony was determined to sell Seven Canberra the best transmitting equipment the company made at a bargain price to promote its use in the great Australian capital. He pressed Stokes to say what he could afford to buy. Embarrassed, Stokes said he could not afford any of it. The Sony man asked him how much money his station could afford to spend and Stokes mumbled: ‘Maybe a million dollars or a million and a half?’ It was the Sony man’s turn to be embarrassed. The equipment was worth many times that. But the Sydney stations had been so discourteous, he said, that he was determined to show them what they had missed out on. He accepted. ‘So we got all this equipment for $1.5 million!’ says Stokes, still amazed. For years after that, Seven Canberra had the most advanced equipment in Australia. The trip had turned into a huge success, all because of a barbecue and a joy ride in some old cars that would otherwise have been sitting in a garage."

"To that end, Stokes put a deal to Fairfax in mid-1987 that valued what would become the Seven Network at around $700 million; he proposed paying a third cash, a third in shares and a third on credit. It seemed a sensible compromise — what he calls ‘real’. (Fairfax had cemented its hold on Seven by buying Melbourne’s HSV7 from Holmes à Court shortly after Murdoch sold it to him.) The supercilious Fairfax executives had amused Stokes when he’d dared buy their Canberra station six years before. Now they astonished him with their unworldliness. Mr Falkingham of the pinstripe suits and patronising manner had gone but he might have handled the sale better than his successors did. Stokes thought the ‘pretty nice combination’ of cash and shares upfront and the sustainable terms he was offering would appeal to a realistic seller. So he was dismayed to get a telephone call at 11 p.m. one night from a Fairfax advisor, Tony Bourke, to say they had done the deal with another bidder: former business reporter Christopher Skase, one of the more colourful figures in a colourful era. When Stokes asked why Skase, the Fairfax man said: ‘He’s got cash.’ When Stokes heard that Skase had given an undertaking to pay nearly $900 million for the network, he almost laughed."

"In January 1987 Stokes was moored off Rottnest Island when the time came to call Kerry Packer and bid on Nine. He paddled a dinghy to shore and queued in his shorts and thongs to use a telephone box to ring Packer in Sydney. He didn’t have any change, so had to make a reverse-charge call. He knew what Alan Bond was offering. ‘I’ll offer 50 cents more than Alan Bond if I can get some support from you,’ he recalls telling Packer. By ‘support’ he meant a break on programming costs, which Packer could control because he had long-standing deals with American production houses. Stokes also suggested he would be a more stable owner for Nine than Bond. Packer grudgingly agreed, but it didn’t help. That night the news broke that Bond had offered another $1 a share, putting his total bid above the billion-dollar mark. It was an offer Packer could not refuse and Stokes would not match, especially the extra $50 million of borrowed money he says Bond grafted on top of the agreed price, like a cherry on a cake. The two Kerrys sat back to wait for Bond to implode. Watchers weren’t sure where the extra $50 million went but some speculated most of it would find its way back to Bond. He was clever like that."

"Most deals rely more on relationships between the parties than on money alone, he says. This lesson had been reinforced when he’d dealt with Fairfax to buy their television station. He’s sure they would have ignored the uncouth Perth shopping centre man if Ken Parker hadn’t quietly introduced him to the venerable Sir Vincent Fairfax, who decided he would pass muster. ‘Most things don’t get done only for money,’ he says. ‘Money has to be there but it’s not always the highest price. Quite often you need something else as well.’"

"WHEN PETER GAMMELL paid a visit from Scotland to see his ‘godfathers’ Stokes and Parker in mid-1987, he was impressed. Australian Capital Television had flourished to become what Gammell calls ‘an engine for growth’: its operating profits had paid off the $13 million purchase price so rapidly that only $4 million was owing on an asset now valued in tens of millions. With the golden goose 96FM and Jack Bendat’s Golden West Network (as South Western Telecasters had become), Stokes and his…"

"On their last day in Japan, Stokes and Rayner were having a meal when some young Japanese students asked them if they could practise their English with them. The two men obliged. Stokes asked one of the students what her plans were for the future and she said to study English and become a professional translator. He asked what it would cost to do the course; the answer (in yen) was about $2500. Stokes pulled out his unused travellers’ cheques and handed over $2500, a lot of money in Japan with the exchange rate at about 380 yen to the dollar. Rayner was shaking his head. Stokes told him: ‘We’ve had a great trip so let’s leave a bit behind.’ The student took his business card and the cheques and thanked him and he didn’t think of it again. Twenty years later a brown-paper parcel the size of a shoebox arrived at Australian Capital Equity’s office in Perth. Assistant Kathy Bohn opened it cautiously. Inside was a huge pile of Japanese currency and a note from the student. It said, in fluent English, that many years earlier the sender had borrowed $2500 from Stokes to pursue her language studies and that it had changed her life. She had met and married her husband at college and now they both had successful careers as translators for big companies. The cash added up to $12,000. The exchange rate had tumbled from 380 yen to 75 to the dollar. Stokes had done bigger deals but not many better ones, and he’d only been trying to help."

"‘Always be smooth with people because the more they want to help you the better the outcome’ is one of his thoughts. And he never forgot his early mentor Harold Seymour’s advice never to worry about the money you were going to make on a deal instead of concentrating on doing the job well."

"Stokes’s recollection is that he told Lowy, ‘With the price you want for your stations I’d be better off selling you mine.’ And he did, selling him his basket of media properties all rolled into BDC, the jewel of which was the new Perth television licence. The price of some $330 million was on condition that Stokes accept a promissory note for $190 million for a year, and Lowy give Stokes or Bendat first offer to buy back Golden West if he decided he didn’t need the regional network as much as he needed the money it was worth as a stand-alone business. The deal they struck meant Lowy would pay out the other BDC shareholders — notably Bendat (with 12 per cent) but also cashed-up Elders identities Peter Scanlon and Bob Cowper as well as members of the public. Stokes owned the lion’s share but agreed he would wait if Westpac would guarantee the money. Westpac did."

"STOKES’S INSTINCT TO avoid the mob turned out to be strong. So did his misgivings about whether the boom would last. But the itch to join the big league of media players niggled at him. It was a make-or-break moment. If staying in the market was a test of nerve, as so many of the 1980s big shots implied, would selling out brand him as some sort of failure? Even (or especially) with hundreds of millions of dollars at stake, the politics of it was as primitive as playground push-and-shove. Nobody wanted to blink first. But Parker advised Stokes to follow his instinct and step off the train in case it crashed. Parker had got it wrong with PGF and Stokes had got it wrong with Pacific Film, waving aside Bill Rayner’s gentle protests that film processing was…"

"When Stokes relayed that story to Bourke, the Fairfax advisor admitted giving him sixty days to scrape up a deposit — and that they were accepting a promissory note for the rest. So, said Stokes, he hasn’t got the deposit and he’s still got to find someone to back him? It was more accusation than question. ‘Two days later,’ recalls Stokes, ‘I pick up the paper and see Skase is off to the US to buy MGM. Then he’s off to Japan to raise money, which he doesn’t get.’ Amazingly, in July 1987, the man with no money was allowed take control of Seven on the strength of a shoeshine and a smile. That was when Stokes realised the game was out of control."

"Valuations rocketed when Stokes and Bendat rolled all the holdings into a company called BDC Investments that year (1987) and floated it on the stock exchange. But a bigger reason was that the bull market had turned into a mindless stampede. Gammell marvelled at the hand Stokes held in the game but was taken aback by the high stakes: ‘I said I couldn’t believe the value of the businesses and asked what happens when the music stops.’ Stokes said he had little debt and was confident of riding out whatever trouble was ahead. In truth, he was a little uneasy. He wasn’t a herd animal and stampedes…"

"WHILE OTHERS RAPIDLY made and subsequently lost fortunes, Stokes mostly stuck to making plans and watching them unfold. And next on his list was an ambitious project that had been on the cards for quite some time."

"For Lowy, the BDC deal wrapped up a national network of television and radio stations that Stokes estimates cost a total of $1.2 billion. Kerry Packer had said you get only ‘one Alan Bond in a lifetime’, but getting a temporarily dazzled Lowy wasn’t bad."

"The law of unintended consequences helped balance the ledger for the boys, she thinks. Faced with being a single father, Stokes cut down his work and travel commitments to concentrate on being a better parent. One night he had dinner at friend Santina Stransky’s house and bagged the leftover schnitzel to take home to make the boys’ school lunches. Stransky (a European countess, Perth socialite and one of Australia’s pioneer television cooking show hosts) still laughs about that. No matter how much money he spent, he didn’t waste much."

"One night at a party at Holmes à Court’s, Denise criticised a curious official decision to let a wealthy boat owner use explosives to blast a bigger mooring for his boat at Marjorie Bay on Rottnest Island. ‘On the Monday Kerry got a phone call from Brian Burke,’ she recalls. The Premier tried to bully Stokes about his outspoken wife and advised him that she should keep quiet. It left a nasty taste."

"If the Gammells were prosperous and well connected, they were also tough and practical Scots. The family rite of passage was to send each grown child ‘somewhere in the world’ with a one-way ticket the year after leaving school. One brother went to Tanzania, another rode the range in Texas, a third went to Canada and their sister went to Pennsylvania. Bill came to Australia to work as a roughneck in a geological mining crew at Tennant Creek in 1970."

"The cattleman and the mogul would team up again to build a less ambitious and more profitable pastoral empire at the opposite end of the country, buying a string of farms on Kangaroo Island and the Fleurieu Peninsula in South Australia. That was in the 1990s. For Murray, it was a way of life. By then, for Stokes, it would be just another hobby — although the long-term promise of owning many kilometres of scenic coastline appealed to him too. Not because of wool prices but because they’re within easy reach of an international airport."

"‘Kerry is very intelligent and can foresee the future,’ he says. ‘He’s a forward planner and very clever at picking good people’ but an ‘iron disciplinarian’."

"The first steps were to find out who was handling the fire sale and establish what the tower had cost to build — and how much less would buy it. The answer to the question of what the building had cost was about $US240 million, most of it still owed to the mortgage holders because the building’s backers were in more trouble than General Custer. Construction had finished in 1986, just in time for the 1987 crash, which had poleaxed the Texas economy. The Stokes camp reasoned if they could buy the tower for less than $200 million it had to be a bargain because, they assumed, it was far less than replacement cost. When they did the deal for $178 million Stokes was delighted — except for one detail that swiftly assumed great importance. He had requested a guarantee that if he wanted to quit the tower he could offload it back to the seller for a minimum of $150 million — but in the hurly-burly of doing the deal in New York, Stokes’s chief negotiator had taken a verbal assurance as a binding promise."

"MAKING MONEY WAS one thing. Stokes had known he could do that since he trapped rabbits. Keeping it was harder because the position was reversed: the traps were set for him. As he would joke later, even ‘carnivores’ at the top of the food chain get hunted. ‘Everyone wants to help you invest the money.’"

"PACIFIC FILM HAD one thing in common with PGF: Stokes bought it just as its market was colliding with technical changes that made long-held knowledge and ‘advantages’ obsolete. Buying Pacific Film was ‘like buying a yacht with a big hole below the water line’. He explains: ‘I misread the problem. I thought it was marketing but it was the same problem Kodak had: the world was going digital.’"

"‘It’s the best business since the shopping centres,’ Bill Rayner would say later. Neville Owen agrees. ‘Caterpillar is one of the world’s great survivor US brands — better than Boeing, Harley or Levis,’ he declares. Stokes had picked up what would become one of the best Cat franchises in the world, and would eventually add two more. He would be far better known for media ventures, but the union with Caterpillar would be his greatest business move."

"WHAT MATT WOULD have called ‘horse sense’ applied in the stockmarket as much as in the stockyards: to avoid getting kicked, stick close to the horse so you can feel what it’s going to do. It’s a homespun version of the Mafia maxim that says to keep your friends close and your enemies closer, and Stokes’s experience in Dallas had underlined the truth of it."

"Wigmores had taken on agricultural implements from chaff cutters to stump-jump ploughs, seeders and harrows: the sort of horse-drawn machinery Matt Stokes had grown up with in the Mallee. In 1922 the firm had taken on tractors — and in 1925 it became the Western Australian dealer for Caterpillar, the American firm that made ‘crawler’ tractors, the peacetime cousins of the primitive World War I tanks that were the forerunners of bulldozers. Wigmores was only the second Caterpillar agent appointed outside the United States and its dealership flourished in the west as farming and mining grew. The big yellow ‘Cats’ were ideal for clearing bush and moving mountains of ore."

"‘Work hard when it’s hard to work,’ Stokes told his boys. Matthew Phillip Stokes had done it all his life."

"Matt’s ambition was humble and his world was small, but in him were pride and perseverance and a bottomless capacity for work. It’s one definition of true grit and they shared it."

"To reverse one of his favourite metaphors, he was weeding the garden rather than bulldozing it."

"‘When a company is at war with its two major shareholders there’s always an opportunity for a man of peace.’"

"the sharpest of all was in damage control: the necessity to cut losses hard and swiftly instead of what he calls ‘going into denial’. He explains drily, ‘When everyone says you’ve cut too much, you’ve got it about right.’"

"Stokes was in the United States regularly, having set up an Australian Capital Equity branch in Texas, largely to oversee the campaign to lease or sell the Dallas skyscraper. On one trip he invited Caterpillar decision makers ‘to have a heart-to-heart’ in his splendid office in the refurbished tower, by now called Fountain Place and winning international architecture awards but not enough high-paying tenants. Whatever Stokes said worked: Caterpillar agreed to take the franchise from Morgan and give it to him."

"This involved dealing with an American cowboy businessman with a dash of J.R. Ewing in his makeup. His name was Hal Morgan, he was an earth-moving equipment dealer and he had been a stone in Stokes’s shoe for months. But in the last week of 1989, the troublesome American finally agreed to a deal Stokes had been waiting for ever since the 1987 crash had left blue-chip businesses ripe for takeover."

"Deveson was to chair a board meeting on 30 March in Perth. He decided not to call a crisis meeting before then and did not brief other directors in detail, which made some unhappy when the story broke. They started blaming Deveson as well as Campbell. Stokes can recall being in his office with Peter Gammell when the rate-card story broke in March 1995. He and Gammell looked at each other and Stokes said something like: ‘I think we just got the chance to take over Seven.’ Stokes tends to sum up complex matters with a pithy line. ‘When a company is at war with its two major shareholders there’s always an opportunity for a man of peace,’ he deadpans, then chuckles."

"‘There’s a theme here,’ Owen adds. ‘The media deals [selling television and radio assets in 1987] came out of the failure to buy the Seven network ahead of Skase. By biding his time Kerry was able to get better assets at a better price. The Cat deal came out of a failure to get the franchise the first time around. It’s a question of biding your time.’"

"COWLEY STRUCK THREE hours before the deadline for tenders from Optus and Foxtel. Instead of submitting a Foxtel bid, he sent a hostile note some Seven directors saw as threatening. The directors called in a Queen’s Counsel to advise them on whether it was legally prudent to defy it. Meanwhile, the Optus offer arrived — and greatly impressed the Seven directors. But their silk warned that if they rebuffed the offer, Optus might sue. However, if they took the offer, News might sue. Campbell urged the board to go with Optus and the board voted to take his advice. Two people were deeply unhappy. One was Dulcie Boling, prevented from voting because she represented News; the other was Stokes. Boling got mad and Stokes got even. He calmly threatened to sue the directors individually over the Optus decision — which, he argued, should have gone to shareholders. Not all company directors are automatically indemnified against actions by major shareholders and so the threat worried the board. Threatening directors and running press campaigns had been standard procedure in the 1980s, especially in Perth, but most of the Seven directors had not encountered these tactics before."

"Stokes had read the future acutely from the podium when he warned that the Australia he knew was morphing into a version of Los Angeles. ‘This is no particular slight on Los Angeles — it’s just that Los Angeles is not Australia. And there is no need for us to surrender our cultural identity, certainly not without a fight.’"

"‘You seem to have a lot of money,’ she recalls saying. ‘What do you do?’ ‘I own things,’ he told her."

"The nuts and bolts of broadcasting fascinated Stokes. He had trouble remembering dates and people’s names, even figures once he’d finished with them. Money bored him once it was made and reinvested. But technology had always intrigued him. Inside Australia’s new media mogul was the little boy squatting in the squalor with his Meccano set at Watsonia barracks, the bigger boy who built a crystal set, the teenager who grafted an electric fuel pump onto his first jalopy and the offbeat property developer who was among the first in Perth to have a home computer. Now he was gripped by the idea of creating the first digital broadcast centre in Australia. His eyes gleam and his voice is animated when he talks about how they did it."

"when Stokes heard she had relapsed after treatment, he organised an appointment with Sydney’s best specialist and flew them both there. Hull would never forget the gesture. Nor the fact, years later, that Stokes discreetly helped him in a legal matter that was important to Hull and of no advantage to Stokes, by then his former employer. Hull didn’t know then what he heard about later: that Stokes helped a lot of people on the quiet."

"Left over from his time in overalls was an interest in and knowledge of printing and publishing machinery and the people who worked it to create the small daily miracle that rattled off the presses. He committed to spending millions of dollars on a new Manroland press from Germany. But buying the state-of-the-art press was just the beginning. He didn’t want to drop a V8 engine into an old jalopy; instead of haggling over discounts or other side benefits, he negotiated an agreement for Manroland to refurbish the entire plant. Years later, one of Stokes’s employees would also recall his far-sighted plan of laying a new concrete floor in the press hall, precisely formed with a tiny downward incline so that the huge reels of paper could be rolled into place with no strain on the pressroom hands. The boss remembered what it was like to do the dirty work, and created one of the cleanest and best press halls in the country."

"On one hand, new technology promised a higher standard of living and broader knowledge. On the other, the ‘globalisation of the information industry’ threatened to turn Australia into a cultural colony. He was already on the record with a prediction that by 2010 everyone would have laptop computers, which in 1994 were an expensive novelty for a tiny elite."

"The judge agreed with Seven’s barrister that the union had used misleading and deceptive behaviour. It was the beginning of a series of legal actions that would see union officials found guilty of coercion, fined heavily and ordered to pay punitive damages and Seven’s costs. Mighell’s chutzpah astonished Aspinall. He says Mighell called and offered him a deal: if every member of the union switched their mobile telephone account to Seven’s B Mobile company, would Seven drop the demand for costs? ‘I said: “Mate, you’ve just been done for coercion and now you’re trying to do it again! Just pay the money”.’"

"A new chairman was appointed that day but resigned seven weeks later, which might be some sort of record for brevity. Stokes became chairman on 27 June 1995. The paperboy was back in town and now he was boss. From the executive suite in the HSV-7 office in Dorcas Street he could see where he’d ridden his patched-together bike to Warner’s Astor radio factory down the road in Sturt Street. ‘But I wasn’t thinking about that,’ he admits. With him, it was always the next big thing then the one after that. He had his Seven-League Boots on and anything was possible."

"The appeal of also moving Seven to Docklands was clear, apart from the obvious motive of quitting the old building in Dorcas Street. It was a natural fit for the station that had, after all, been broadcasting AFL football in Melbourne for forty years. But this wouldn’t just be moving house: Stokes saw it as a chance to leapfrog competitors in terms of technology and efficiency. He decided, as he said later, not just to ‘weed the garden — but to build a new landscape altogether’. He thought out a plan to build a national broadcast centre next to the Docklands dome that would become one of his most satisfying achievements, although the gleaming news centre he built next in Sydney’s Martin Place wasn’t far behind."

"King observed the way Stokes dissected the deal ‘like slicing an orange a certain way’ so he would end up with the bits of the finished project that he could control best. Instead of banking on bums-on-seats ticket sales and related food and drink concessions, Stokes chose the naming and advertising rights to the stadium, and a new concept: premium seats. These were all elements he could market on television or use for his own ends. By comparison, the stakeholders in the Packer-led consortium had ‘sliced the orange’ vertically, so each member would have the same exposure to all money-making (and losing) parts of the operation, sharing fat and lean equally. As it turned out, Stokes’s bet was the right one. But he had other plans for the site besides turning a dollar on the rights Seven had bought."

"STOKES WAS NEARLY sixty and rich beyond most people’s dreams when he started doing business in China, a vastly different proposition from his early forays with the Hong Kong and Shanghai Bank. He didn’t need to do it and could have chosen to chase health and the sort of happiness most people associate with rest and recreation. He was hovering over Seven and WesTrac and his pastoral and property interests, managing the managers he’d hand-picked to run each outpost of his empire."

"A boss might fake interest but no-one gets away with faking knowledge among experts. ‘The engineering people were floored by this — and excited because they could all talk the same language with him,’ recalls Susan Wood. ‘It was mesmerising. He wanted the best in the world. He’d want to know what your problems were. He’d ask, “What do you need?” and then he’d seek them out on his next visit to see how it went. He’d ring them at random at the drop of a hat.’"

"Kerry Packer: ‘I should have crushed you when I had the chance.’ Kerry Stokes: ‘But I never gave you the chance.’"

"It was time for Stokes to apply his philosophy that problems throw up opportunities. Seven had started as a 6 per cent shareholder in the stadium and was the only foundation investor to have made money out of it. Under the new structure, it would take over operating the stadium but keep Ian Collins on to run it. It was like coaching a bottom side — the only way was up."

"Stokes quickly worked out a couple of things many Western businesspeople didn’t. One was not to look at his interpreter but at the person whose words she was translating. ‘And I never said I’d “teach” anything to people with a culture that was thousands of years older than mine.’ Instead, he told the Chinese he wanted to share his experiences with them, the way friends and equals do."

"So why bother with China as well? ‘I still like to feel sweaty palms,’ he admits."

"In one of Stokes’s long-range chess moves, he put former Woodside Petroleum chief Don Voelte in the media-group chair — where he took a chainsaw to costs — ready for Worner to take over the big job in 2013. Although Stokes sees Voelte as a tough all-round manager, his ultimate value lies in his knowledge of the energy business, which explains why the American became head of Stokes’s Seven Group Holdings with a brief to examine gas extraction."

"Then came the sting. ‘He told me being a friend of China is never going to be easy,’ recalls Stokes. ‘He said something like: “We appreciate our friends from time to time but we don’t appreciate people who say they are friends of China and then are not friendly”.’"

"Cut to 2006. That year, as Peter Gammell puts it, ‘private equity came to town’, its saddlebags stuffed with billions. New York outfit Kohlberg Kravis Roberts & Co (KKR) was the underbidder when James Packer sold the Nine Network, then threw itself at Seven on the rebound. It was a decisive moment. Seven was charging back in the ratings and revenue; conventional wisdom was to stick with a winning formula. But once again, Stokes’s antennae picked up a change in the climate ahead. Stokes refused to sell outright but agreed to a swift and private deal for a 50–50 joint venture with the New Yorkers. Within thirty days the new partners had formed Seven Media Group. Stokes banked a dowry of $3.2 billion, paid off all Seven’s debt and had $1.5 billion left."

"As Stokes spoke, he looked above the row of ‘suits’ sitting at the front to the bunch of apprentices in orange overalls standing self-consciously at the back. He told his audience that when he’d taken over the Perth dealership in 1990 he had relied a lot on the general manager Frank Johnson, who was an ex-tradesman and believed fiercely in the people on the workshop floor. Johnson had been right, he said: ‘The guys on the floor always know better than management!’ The apprentices relaxed visibly and sneaked glances at each other. He had them in the palm of his hand. ‘We strongly believe the trades should be an entry to management,’ Stokes went on. ‘The tradesmen and women love what we do because they know it better than anyone else.’ He said other companies stole tradies from WesTrac, ‘because not one of them trains their people like we do’. He had appointed three executives at WesTrac who’d ‘come off the tools’. At this, the apprentices were starting to look pleased with themselves and the other guests began to look at them. The boss had made them the centre of attention. Stokes rolled off a few more sentences, then paused and lowered his voice for the punchline: ‘Every one of you will be better qualified than I ever was.’ That was when the audience clapped, like players applauding their coach after a win. They were on Stokesy’s team. Senator Chris Evans spoke next. As the Federal Minister for Tertiary Education and Training, he represented the government, which had put big money towards the joint training venture. But he couldn’t top the previous speaker; Stokes had stolen the show. After Evans unveiled a plaque, Stokes slipped behind the microphone for an encore. ‘You all have to go back to work now,’ he rasped. Everyone laughed."

"‘Cash in before a crash, ready to buy later’."

"FOR SOMEONE WHO has done a lot of deals, Stokes doesn’t see himself as a deal-maker. His deals have mostly been towards an end: to acquire and build businesses."

"Like playing Russian roulette or defusing bombs, it looks easy when you get it right, and most of his life Stokes got it right — picking his moment to sell then waiting to swoop on another opportunity, often involving a completely different business. He recalls the date and duration of every recession and credit squeeze in half a century, and sensed most of them coming. Turning himself from battler to billionaire was like tossing seven heads in a row, betting all up."

"‘People can get lucky but you have to work,’ he repeats. ‘You have to work hard when it’s hard to work.’"

"‘He told me to make sure you can get away from any situation because you never know who you’re going to be fighting.’"

"A grin sneaks over his face as he recalls this a lifetime later. No coup is so long ago or so minor that revisiting it doesn’t please him. Pulling off the job with Ron Shaw was another example of something he would do all his career: harnessing the fear of failure to overcome whatever obstacle is in his way. ‘Sweaty palms’ is his shorthand for it."

"‘I’m a chameleon,’ he says in a revealing moment. Just to prove it, another time he describes himself as a ‘technocrat’."

"Stokes is tactful about most of his contemporaries in business but his real opinions are crisp. Most of them, he says, were specialists: people who struck a formula and perfected it. He avoids saying ‘one-trick ponies’."

"He still loves a bargain, from jeans to jets. Price doesn’t matter but value does."

"to survive you have to ‘buy right’ so that when you sell you still have your stake."

"Packer states as fact he could not be close to Stokes if he were still running Nine. Playing business as a blood sport runs in the genes. Packer’s attitude that business rivalry endangers friendship seems to stand up. Stokes is on good terms with anyone he isn’t competing with."

"Thomas De Quincey’s judgment: ‘No man will ever unfold the capacities of his own intellect who does not at least checker his life with solitude.’"

"Stokes is unpretentious about food and clothes. He arranges sausage rolls with tomato sauce instead of hors d’oeuvres at board meetings and corporate functions: he likes them and he knows most other people secretly do too."

"When Stokes was making his way in real estate in the 1960s a young doctor told him he was thinking of quitting his practice to buy and sell land because there was obviously more money in it. The implication was he could do anything Stokes could if he merely turned his brightest-boy-in-class mind to it. Stokes remembers looking at him and saying, ‘No, you won’t.’ ‘Why not?’ asked the affronted doctor. ‘Because I had nothing to lose — and you have,’ Stokes answered. ‘I went hungry. You won’t do that now.’ The comfortable wouldn’t risk what they already had for the chance of future reward. They wouldn’t match the fierce way Stokes backed himself. All champion fighters come from ghettos and barrios and slums."

"In Perth, WesTrac’s longtime general manager Jim Walker had to fix the problem at long range. Walker was an example of Stokes’s philosophy that everyone in the business deserved a chance to run the show: he had started as an apprentice diesel fitter and worked his way to being sales manager under Harold Morgan before taking the top job for Stokes. He was living proof of what Stokes would say in his Guildford speech years later. In desperation, Walker used his own experience as a guide. He sent two young ‘goers’ who had been apprentices of the year, Mark Hatfield and Peter Kosick, to work in the Tianjin workshop. It was a turning point. Hatfield and Kosick were young, polite and practical, and led by example ‘on the tools’. Their instinct was to work with the locals rather than order them around. They picked up basic Mandarin as their new workmates picked up advanced mechanical skills. The accidental psychology hit the spot. It gave the new Chinese workers alongside them an ideal role model — by showing, not telling. Within months, the difference was obvious. Over the next couple of years, the workshop would become the heart of an import–export business that reconditioned used machinery from all over the Pacific and resold it on the world market."

"Property is the safest long-term investment when the market crashes, he says, which is why he has quietly kept gathering it."

"‘If things get tough, it’s a survival skill to address it quickly — to sell things at a loss, even. You have to think clearly.’"

"‘the coldly economic mind’ that it operates efficiently under life-or-death pressure."

"Waiting below are people to meet, deals to stitch together, plans to make. He’s never wasted time in his life; now that time’s wasting him, it is more important than ever to fit in all he can. He was born restless, knowing instinctively what most learn too late: that life is short. Maybe that insight marks Golden Dragons, the rare ones destined for success and condemned to chase it to the"

"Even sitting still, he is never really idle. As he once told a young David Gonski, it’s the quality of thought that counts, and he still does plenty of thinking."

"he draws a lesson about business and about life from the story of the Antipodean: people who lose money usually go into denial and won’t act quickly enough to cut their losses. ‘Waiting doesn’t help,’ he says. ‘If you don’t get ahead of the curve you get wiped out by the wave.’"

"‘I’m no saint,’ he says. ‘But I’ve done a few interesting things.’"

"‘If I didn’t have this [the jet] I wouldn’t be able to do business the way I do at my age,’ he says. It’s not a glib statement. He doesn’t complain but he’s obviously in pain. He’s been sitting uncomfortably for days, trying to ease the aches in his back and neck: the effects of wear and tear inflicted by a careless young owner in the foreign country he’s left behind."

"STOKES’S INTUITION IS what Australia’s sometime richest man Andrew ‘Twiggy’ Forrest calls ‘the raw logic’ that comes from ‘working with your hands among working-class people’."

"Business comes first and if there’s any spare time, he’d just as soon spend it quietly with his sons, his wife and a handful of others, skiing, diving or boating. And thinking."

"He lists Stokes’s good points but admires him most for his ability to sidestep the economic hazards that hurt brasher players."

"‘Kerry’s a bit of an iceberg,’ he offers, then explains: ‘not frigid — more under the water than on the surface’. ‘If he asked me to do something for him I would say yes even before I knew what it was. He gets ten out of ten as a businessman and ten-plus as a bloke. His track record speaks for itself.’"

"Gower lists the catch-all qualities Stokes possesses — ‘enthusiasm, application, drive, intellect’ — then stresses a specific talent: ‘He selects subordinates well so he can look ahead while they do the day-to-day.’ He observes the instinct for planning that another engineer,"

"Stokes can tick off a dozen economic downturns he’s anticipated, but Court talks about the biggest one: the crash of 1987 that smashed Western Australia. He says Stokes had ‘intuition that things were too good to be true’ and the patience to sit out a crash then ‘move on some good assets’ in an ‘awful era when not only did the rest go broke, some went to jail’."

"they and the Vignacourt photographs have fired the public imagination. ‘The public recognition was overwhelming,’ he recalls of the reaction to his contribution to the Wheatley VC. ‘But the real story is about the widow.’ He pauses as he talks about this, choked up and blinking back tears. ‘It had a very strong effect on me. The thing is that apart from being a VC winner, Dasher Wheatley was a bit of a rogue. But his widow and four kids are left in a housing commission flat. Nobody calls on her. Nobody helps. And in the end she has to sell the medal so she can have a home.’ He pauses again, voice ragged with a stronger emotion than conveyed in the deliberately mild language he uses. ‘That was pretty shabby treatment,’ he says at last."

"Stokes flew to Borneo to inspect the rich man’s toy, fading in the tropical sun. He knew that Mercedes Benz had ‘a note’ on it — a mortgage for money the owner owed. ‘I go to see him [the owner],’ Stokes says. ‘The boat’s looking a bit shabby because he’s not maintaining it. I told him, “I love your boat but there’s a recession on — it’s too dear.” He says he doesn’t want to sell it any cheaper.’ Stokes dived under the boat to make sure the hull was sound. He chatted to the skeleton crew, who let slip that they were moored at Kota Kinabalu because it was a jurisdiction where the mortgage holder could not seize the boat. The two crewmen hadn’t been paid for months. As Stokes left, he gave them a contact number ‘for the people who really own the boat’ and suggested they use it. He suspected Mercedes would pay the crew their back wages if the boat was in a jurisdiction where it could be seized. Soon afterwards, Mercedes called him to check if he’d be interested in buying the boat. He told them if it appeared in a legal jurisdiction he would ‘pay out the mortgage plus costs plus the crew’s wages’. A month later the boat arrived in Bali; the crew had fled Borneo on the promise of getting their wages. When Stokes got the news, he said: ‘Fill it full of fuel and send it to Fremantle and I’ll buy it.’ He says it cost less than $5 million, plus what he’s spent since to bring it to mint condition. He estimates it had cost more than $10 million to build — and building a replacement would be more than $20 million."

"saw something in me,’ says Vlahov, who certainly saw something in Stokes: ‘a relaxed intensity’ and ‘competitive mindset’ that reminded him of elite sports coaches. Stokes could pick talent and encourage it and was prepared to be ruthless when it mattered. He was friendly, generous and much admired but was prepared to do what leaders must in team sports: to be everyone’s confidant, no-one’s best mate and a nerveless executioner."

"The family has grown up with wealth and quality but without lavish spending on ostentatious things. The brothers have been raised often using hand-me-downs, from ski gear to cameras to cars."

"‘There’s never a conversation without business in it. He lives and breathes it.’ (Ryan Stokes on his father)"

"Being Columbo incognito can have small drawbacks. One dry season in Broome a few years ago, an alert bank teller telephoned Australian Capital Equity in Perth to say a weather-beaten man wearing shorts and a T-shirt was attempting to cash a small personal cheque in the name of ‘Kerry Stokes’. The mystery man was, in fact, Kerry Stokes. At that stage he’d owned the best house on the coast for nearly twenty years and before that was joint proprietor in a dozen huge cattle stations in the Kimberley. He could have raised a cheque to buy the entire town but he didn’t even raise his voice. He likes to see people doing their jobs properly and has never wanted to be recognised in the street."

"Denton knows Stokes’s gesture to save the Rabbitohs was where altruism meets business. He also knows that doing the right thing can be the best public relations exercise of all."

"‘He never really shuts down from work,’ Ryan says of his father. ‘But when we’re skiing the immediate pressure points aren’t quite as acute. It’s an important time . . . to get a chance to connect and talk.’ They talk about skiing and family things but it always drifts one way. ‘There’s never a conversation with him that doesn’t have business in it. He lives and breathes it.’ Stokes’s biggest assets, says his son, are that he ‘hones in on problems’ quickly and judges people shrewdly. He is loyal but rarely sentimental."

"It took Stokes a while, for instance, to realise that his managers would have to sidestep the conventional management hierarchy to get results. Selling new equipment wasn’t so hard but the failure of the vital maintenance and reconditioning side of the business choked profits and progress in the first years."

"Edna Wheatley put the medal on the market with an international auction house. It was the first VC to be sold for many years. The Returned and Services League was alarmed that a foreign collector might buy it, and asked Australian servicemen and women to donate $2 each, which would raise some $60,000. This caught Stokes’s eye. He called the RSL and privately offered to ‘top up’ the price, if needed, to keep the medal in Australia. The medal went for $160,000 but could as easily have made half that. Stokes didn’t mind. At the time, it was reported that ‘a businessman’ had donated the $100,000 to meet the price but his identity soon leaked out. Bruce Ruxton was Victorian branch president and a champion talker. It was the start of Stokes’s interest in buying Australian VCs to donate to the Australian War Memorial. He would later buy another six (to the time of writing), some for massive sums. He doesn’t talk about the cost of individual medals, because each, having been earned by blood and bravery, is worth as much as another regardless of an auction result. The fact is he has spent millions on the medals, on the war memorial’s Hall of Valour and on repatriating the Vignacourt collection of some eight hundred plate-glass negatives of Diggers taken by French photographers in World War I. Stokes shrugs it off. ‘I’m lucky enough to be able to do what most Australians would do if they could,’ he says. He might be right."

"In 2010 Stokes merged Seven Network Limited and WesTrac to form Seven Group Holdings, a transaction that made the previously private WesTrac Group public. The corporate union of television and bulldozers seemed as unlikely a mix as machine oil and Evian water but Stokes argued, successfully, that everyone would ultimately benefit. The deal set up an even more ambitious plot twist the following year."

"All of it said something about Kerry Stokes. He’d walked away from religion long ago but religion hadn’t altogether left him. All his life, the better angels of his nature had pushed him to create order and beauty in a chaotic world. In a swampy cow paddock near Newcastle, where others might have put up a big shed, the onetime altar boy had built a cathedral of industry."

"Building began in February 2011 and would be finished in June 2012. First the 23-hectare site needed 120,000 cubic metres of sand to be rolled and compacted to build it up above the floodplain. Then paving was laid indoors and out that had to be strong enough to carry 110-tonne machines. Water harvested from a roof area the size of the Melbourne Cricket Ground ran into a massive gutter spanning the length of the spine and from there into a 2-million-litre storage tank that made the plant self-sufficient. Kilometres of cabling, pipes and ductwork were neatly hidden behind smooth panelling, while the vast workshops had airtight doors to seal out the dust and be kept as clean as a hospital ward."

"Stokes spends most of his time in Sydney and most working days in the same Pyrmont offices as Worner: a converted dockside warehouse that’s all polished timber floors and exposed brick and beams. Those working there see Stokes in the lift, and he’ll quiz them about how their part of the business is going. ‘He’s more likely to say g’day to someone in the lift than they are to him,’ says Worner. The way he ‘gets’ the engineering side of the business always delights the technical staff — and terrifies Worner, who knows little about what makes digital broadcasting equipment actually work."

"If Seven and WesTrac was an arranged marriage, Stokes’s next proposal — that West Australian Newspapers should swallow the entire Seven Media Group — seemed more like a contortionist’s act. West Australian Newspapers was valued at $1.4 billion and Seven Media Group at $4.1 billion. Shareholders were nervous and some downright hostile to a related party transaction, but Stokes managed to persuade enough of them that Jonah could swallow the whale and would benefit hugely from the experience. Apart from a little indigestion, what could possibly go wrong? When Stokes had done the original deal with KKR in 2006 he had been able to take out $3.2 billion in cash, keep half the business and leave the joint venture holding all the debt. Now he was able to merge it back into the rest of his media interests and raise $1 billion in new equity to pay down the debt — and still maintain control. Seven West Media was born. It was one of the great coups of Australian business history."

"Tamworth made a good test case. WesTrac built a gleaming new dealership there and brought in new uniforms for the staff. They responded to the faith shown in them and Tamworth became a model dealership. But the next job was much bigger: to replace the hotchpotch of workshops, depots and warehouses throughout New South Wales with one central location that reflected the new reality that most earthmoving equipment in the state was used north and west of Sydney, especially in the Hunter Valley coalfields. Stokes tossed Aspinall the keys and said he would be watching with interest."

"Whereas Packer’s Nine was a dictatorship that ran on fear of failure, Stokes has created a culture where there’s no such fear. ‘That comes from the chairman’s office all the way down,’ says Worner. ‘It’s not okay to fail repeatedly but it’s definitely okay to fail. When something tanks in the ratings he calls and you see his extension number come up and you think, “Oh, my God”, but he says, “That’s okay. Learn from it. Look for the next thing.” ‘Having no fear of failure in a creative organisation is very important. He understands that better than anyone.’ The surfer who loves football metaphors suddenly switches sports: ‘You’ve got to keep swinging for the fences, got to keep having a go.’"

"The scale was industrial, but the effect was as close to beautiful as a factory gets. The architects and the builders had delivered on a brief to create something that would improve the landscape, not be a blot on it."

"Stokes’s sardonic summary is: ‘The judge found he was telling the truth when he wasn’t lying. But that was all right, apparently.’"

"‘This is a showpiece for WesTrac,’ David Aspinall said a few weeks before the formal opening in late winter of 2012. ‘We wanted somebody who could build a building that wasn’t just a shed with finish.’"

"He and Gammell and their advisors started planning a series of interlocking moves. The first was to form a joint venture with another private equity outfit, the Carlyle Group, then use their company National Hire to swallow the market leader, Coates Hire, in a $2.2 billion takeover that would put all the machinery businesses under the WesTrac banner."