Chapter Nine: The Main Event – Round Three – 1981-1990: Introduction: This chapter concludes the examination of the inextricable melding of Television Audience Survey Ratings, Financial Returns and Local ‘Live’ Production. While there was still intense rivalry between TVW7 and STW9, other forces were coming into operation in the succeeding period from 1981-1990. In this decade both TVW7 and STW9 were subsumed by much larger corporate entities. At the level of programming this led to a notable decline in local ‘live’ production, as a result of national networking and a corresponding diminution of community responsibility. During this period there were to be big changes in the structure of what can be termed the era of the two ‘family television’ companies in Western Australia. The chapter examines the events that led to TVW7 becoming part of the Robert Holmes a’ Court Bell Group, the retirement of Sir James Cruthers (considered by many to be ‘the Father’ of Perth television) and the sale of STW9 to the Bond Corporation. Another development, the introduction of the Aussat Satellite System was to have a huge impact on program transmission and in conjunction with Networking, perhaps deliver the mortal blow to the local ‘live’ television industry. The chapter concludes with the first two years of a three-station System in Western Australia’s capital city, when NEW10 went on air in 1988. Examination of the correlation between audience ratings surveys and Company profitability continues and so are their combined deleterious effects upon the former showcases of the two original stations, their respective Production Departments and the wealth of output from their in-house studios. In the Twenty-Third Directors’ Report TVW7 19811 full-page colour photographs were the order of the day and one showed Sir James Cruthers with Garry Meadows and others at the station’s 25th Birthday Party, the TVW7 helicopter with the Newscruiser camera-crane truck, Sir Charles and Lady Court arriving to open Cinema City, Lionel Yorke on Yorkie a short- lived variety program. ‘Cop Shop stars John Orcsik2 and Paula Duncan with jockey Mick Gorham after he had won the $250,000 Channel 7 Australian Derby at Ascot Racecourse’, ‘Singer Normie Rowe on camera at SAS Channel 10’s Adelaide Studios’ and the TVW7 Hole-in-One day, shot from the air.3 Apart from the Yorkie photograph the promotion was for imported ‘stars’, station activities, pursuits outside of television production and acknowledgement of community service involvement. One of the biggest television news events since the establishment of the medium was announced on page 3 of this report. Accompanied by a photograph of Mr. Robert Holmes a Court (the controller of the Bell Group of companies) as the new Chairman and Chief Executive of the Group it was announced that Sir James Cruthers had retired. Holmes a Court stated that, ‘TVW Enterprises has a long and proud history…it has a record of serving the communities in which it has operated…I am committed to continuing this record and to building on it.’4 Net profit had risen by 6.5% to $4.53 million and the Group had acquired a 30% holding in the Albany Advertiser Moves were also announced to acquire all of the issued capital in Western Mail Ltd., while ‘significant strategic holdings’ were acquired in Herald and Weekly Times Ltd., and John Fairfax & Sons Ltd. The Group had also acquired a 21% interest in the 1 TVW Enterprises Ltd. 22nd Annual Report and Financial Statements, Tuart Hill, November. 1981. 2 See Appendices for photographs. John Orcsik was a former Health Club instructor and Perth actor who rose to prominence on the national program Cop Shop . 3 Ibid, various pages. See Appendices for photographs. 4 Ibid. See Appendices for photographs. giant UK media and entertainment conglomerate Associated Communications Corporation Limited.5 In 1971 TVW7 Limited began an expansion program following on from when it became a truly independent Company. This followed the action of the Melbourne based Herald and Weekly Times Limited divesting itself of a long standing holding in TVW7 by West Australian Newspapers.6 Sir James Cruthers said that the holding was 44% representing the 3/7ths control of the original share issue.7 In 1971 James Macartney ‘retired’ as head of West Australian Newspapers Limited and Goss White took over as Managing Director. According to Cruthers, in 1971 the Board of TVW Limited became aware that the head of Sydney’s Consolidated Press, Sir Frank Packer was interested in taking over West Australian Newspapers Limited. Because of the Broadcasting Act 1942 ruling that no person could control more than one television station in Australia,8 the 44% holding would have to be divested by Packer and TVW7 would then be open to a control bid. To counter this contingency, the Board of TVW Limited proposed a reverse take-over of West Australian Newspapers Limited, endeavouring to ‘keep it all local’.9 This proved to be not acceptable to the newspaper group. Sir John Williams, the head of the Herald and Weekly Times Group in Melbourne had given an undertaking to the Board of W.A. Newspapers that he would protect them from Packer and to that end made an offer of $5 a share which was accepted.10 However, this placed the new owners (who also controlled HSV7 in Melbourne) at odds with the ‘two station’ rule and a controlled divestiture was formulated.11 With the connivance of a ‘friendly’ Melbourne stock-broking firm, the 44% was placed with a disparate group of institutional buyers such as the AMP Society and Colonial Mutual Assurance. The new shareholders were limited to about 5% each of the TVW shares. In the mid 1970s Robert 5 Ibid, p.4. 6 Ibid. 7 Sir James Cruthers, telephone conversation, 17 July 2002. 8 See F/N 6 Chapter Three. 9 Ibid, 4 June 2003. 10 Ibid. 11 Ibid. Holmes a’ Court, operating through the Albany Woollen Mills started to build a small stake in TVW. According to Binks, when this information became known to the TVW Limited Board of Directors they operated to thwart him in the market, with ‘friends’ acting to curtail Holmes a’ Court’s purchasing activities in TVW. Because of his reputation as a corporate predator he was not a welcome newcomer to the share list.12 Sir James Cruthers said that the first part of that information is arguable, as Binks did not attend TVW7 Board Meetings.13At this time TVW shares were selling at $2.25.14 The ANZ Bank was at $5.10; Bank of NSW $2.90; National Bank $2.70 and Bell Group $4.20.15 The R & I Bank were offering interest rates of 6% at call, 12% for 30 days and 12.75% for 3 months; Perth Building Society 13.5% for 12 months; Resources Bank 15.75% for 10 years; General Credits 15.75% for 3 years and Perpetual Trustees 15% for 3 months.16 At this time Rupert Murdoch (through News Limited) in the role of a ‘White Knight’17 purchased a holding of about 5% in TVW7. At the same time Murdoch was making moves associated with Ansett Transport Industries (in which he held a 5% stake) to gain a greater stake in Melbourne’s Channel ATV10. As part of this he wished to acquire the Bell Group’s 10% interest in Ansett Transport Industries.18 Murdoch and Holmes a’ Court met in Melbourne in October 1979 for a weekend at Murdoch’s property Cavan. In a share swapping arrangement, Holmes a’ Court came away with Murdoch’s 10% interest in TVW and Murdoch acquired the Bell Group interest in A.T.I., subject to approval of the Australian 12 Alf W. Binks. 13 Sir James Cruthers, written communication, 11 December 2003. 14 The West Australian, Perth, 5-8 October 1981 15 Ibid. These were $1 shares as opposed to 50c for TVW Ltd., so there was obvious parity. 16 Ibid. 17 Bruce Benney, personal communication, May 2003. White Knight is a term used to describe a ‘friendly’ investor which can possibly be relied upon to protect the company in which it has taken a stake. 18 Australian Broadcasting Tribunal, ATV10 Melbourne/Control Investments Pty Ltd Share Transaction Inquiry Decision and Reasons for Decision, Australian Government Publishing Service, Canberra, 1980, pp.30-36. Broadcasting control board.19 Although Binks said that many were surprised when Sir James invited Holmes a Court to join the board20 Cruthers said that this did not happen and that the Board had little choice as 15% is considered to be a ‘substantial’ holding in any company,21 and acceded to Homes a Court’s request for a seat on the Board.22 Although it might be seen that Holmes a’ Court ‘pushed’ Cruthers out of TVW7, according to the latter person this was not so. Both Cruthers and his right-hand man Max Bostock23 had decided some years before that they would both retire at the age of fifty-five. That time arrived with Holmes a’ Court’s interest in acquiring control of TVW7 and as he baulked at losing the two top executives, Cruthers and Bostock agreed to stay on for a six months change-over period.24 Holmes a’ Court engineered several rights issues underwritten by the Bell Group and the later acquisition by TVW Enterprises Limited of the Western Mail newspaper then owned by the Bell Group in exchange for an issue of TVW7 shares . The net result of these corporate manipulations was that the Bell Group picked up a further significant parcel of shares in TVW. This placed the Bell Group in a position where it was able to make a full takeover for the Company.