Press plan brought back to life
INTERESTING times are about to hit Perth’s tight-knit media world with the ghost of the late Robert Holmes à Court scheduled to make a surprise appearance in the office of WA Newspapers chief executive, Ian Law, and on an industrial estate in Mandurah.
Bringing back memories of Hacca is a $25 million investment by the Rural Press group in a Man Roland newspaper press which will be used to print the highly-successful Mandurah Mail newspaper, other papers in the expanding empire of Rural Press and commercial jobs sucked in from Perth.
The new facility at Mandurah, which will rank third in Perth’s press pecking order after WAN and News Corporation, will be a wake-up call that, when you run a near-monopoly, competition can arrive quite unexpectedly.
What makes the Rural Press decision even more delicious than meets the eye is that it picks up a project started by Hacca in 1989, and makes Law’s old firm his most significant adversary, especially as WAN and News appear to have a gentleman’s agreement to not compete – the "you have mid-week and Saturday and we’ll have Sunday” arrangement, as the rumour goes.
Over the past few days Law, who was once the number two man at Rural Press, has had to sit back while his ex-colleague, Brian McCarthy, who is now the boss cocky at Rural Press, has been slipping around Perth trying to stitch up work for his new Mandurah Press.
For anyone who is having trouble following the plot, this is how it unfolds. Way back in ’89, Hacca decided it was time to re-grow his newspaper interests. He bought the Collie Mail from Mark Hohnen, installed a few extra press units, launched the Bunbury Mail and planned to expand into Mandurah (with a diversionary look at Albany), when the Grim Reaper struck.
However, by the time Hacca was hit by the ultimate takeover bid, he had worked out a plan, in which Briefcase played a small part. This quote from Hacca, not used before, tells part of the scheme. "Hmmn, Bunbury and Mandurah, both marginal seats, aren’t they" (Hacca, London, 1989).
Political power was step one for Hacca. Step two: was to move up the coast, steadily expanding until his publishing business was on Perth’s doorstep.
Death, corporate meltdown, asset sales and time washed away most of that plan. Until now. What McCarthy is doing is picking up where Hacca left off. Mandurah is (almost) on the freeway to Perth. A Man Roland press will be able to take on a lot of work, some of it from WAN’s commercial printing operations. Price will be the key to anyone making a switch with their press contract and Law must retaliate or risk losing valuable print jobs like his predecessor lost the Community Newspapers work when blind-sided by Kerry Stokes and Lachlan Murdoch.
The word reaching Briefcase is that WAN is likely to boost its commercial printing capacity at its Victoria Park works (home of the long forgotten Sunday Independent of the late Lang Hancock and Peter Wright) with a new $25 million press identical to that being installed in Mandurah.
So far, all we have is the start of a media skirmish based on an old, but valid, plan to slice a few layers of sales revenue off WAN, and give the local monopoly a bit of a fright. Law, who is not a chap to scare easily, will be a stronger opponent than previous WAN management – though there is not a lot he can do as Qantas is discovering in trying to protect its near-monopoly from a low cost airline rival in Virgin.
The best WAN can hope for is that it does not lose too much revenue, though lose revenue it will, either by Rural Press pinching work, or by WAN upping the skirmish by boosting investment in its lacklustre regional publications.
The worst outlook for WAN is that Rural Press actually means to go the whole hog, invests in Mandurah, salami slices WAN’s revenue and then moves into Perth itself, driving WAN into a price war, really hurting revenue, really hurting the share price and then suggesting a merger, or launching a takeover – not such a silly suggestion as Rural Press has grown to be a bigger business than WAN and has capital city ambitions as shown by its acquisition of the Canberra Times – a business once run by Law. The unfolding game is so delectable that Briefcase can almost hear Hacca laughing on the other side.
SPEAKING of the media, there is an interesting theory floating around Perth that this town will be the only place in Australia unaffected by falling property prices.
Briefcase knows this is true because it was the front page headline in Ian Law’s paper last Tuesday – "Perth to defy housing slump". A story based on a BIS Shrapnel study of residential property prices out to 2007.
It has always surprised this humble columnist that one part of Australia can be viewed as immune from diseases as infectious as rising interest rates, or currency fluctuations – and to argue that rising interest rates do not mean falling property prices is right up there with dear old King Canute’s efforts to turn the tide.
Perhaps, and this is a devilish thought, the kids at WA News think it best to keep talking up the local property market because so much of their revenue depends on real estate advertising. Surely not.
But, if that is the plot then they had better look at last Friday’s Financial Review where three price surveys (as opposed to WAN’s one) appear to indicate that Perth house prices are flattening and may even be falling already.
The Australian Bureau of Statistics rates Perth as the second worst property price performer when comparing the December quarter last year with the latest March quarter – up 1.2 per cent compared with Sydney up 3.5 per cent and Brisbane up 6.2 per cent (only Melbourne was worse, down 1.3 per cent). The Residex survey has Perth prices falling the fastest in Australia, and Australian Property Monitors has Perth prices flat, which is not as bad as some other cities according to its survey.
The truth about property is that like all markets it is cyclical. Prices have gone too high. They are now falling and no amount of bluster, bravado and bull from anyone trying to talk the market up will work – until the cycle has run its course.
"Newspapers are a device unable to distinguish between a bicycle accident and the collapse of civilisation." George Bernard Shaw.