Seven

"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."

"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."

"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."

"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."

"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”.’"

"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."

"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."

"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."

"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."