Interview: Sir Julian Smithby Karl du Fresne
The <em>Otago Daily Times</em> is the last New Zealand-owned morning newspaper. Its managing director, Julian Smith, talks about the secret to its success.
If you want to know what New Zealand newspaper offices used to be like, a visit to the Otago Daily Times should do the trick. The clunky Imperial typewriters have been replaced by computer keyboards, but in almost every other respect the ODT building is like a time capsule: a rabbit warren of corridors and poky ante-rooms that bear evidence of having been subjected, in time-honoured newspaper industry tradition, to decades of ad hoc alterations.
The ancient, creaking lift is so claustrophobic it can only have been designed for one person (the boss, presumably), and a frequent visitor to the building swears that buckets are placed on the floor in the reporters’ room to catch the leaks when it rains.
The pneumatic tubes that once carried bits of paper around the building – cutting- edge technology 100 years ago – still function, and when trucks enter and leave the narrow tunnel that leads to the loading dock, they block the traffic on State Highway 1, aka Cumberland St.
It’s all rather quaint, even eccentric, and serves to accentuate the ODT’s image as something of an anachronism, working to a pattern and rhythm that has been only minimally disrupted by the arrival of the 21st century. But these are the very qualities that endear the ODT, New Zealand’s oldest daily, to newspaper sentimentalists.
For decades it has been known as the Oddity, a play on its initials. But these days the ODT really is an oddity – the sole survivor from an era when New Zealand newspapers were virtually all family-owned and highly parochial.
Like the Octagon, First Church and Larnach Castle, it’s a Dunedin institution, but it has a special significance beyond that.
Allied Press, the family company that publishes the ODT, stands out as the last bastion of independence in an industry overwhelmingly dominated by big Australian publishers Fairfax and APN (owner of the Listener). Decisions affecting the paper are made not in a Sydney glass tower but in a first-floor office overlooking the corner of Cumberland and Stuart streets.
The company’s owners, the Smith family, are firmly anchored in the local community. They have been here for generations and know their market intimately. They are generous donors to local causes, often without acknowledgment. Their interests are interlocked with those of the community they serve – a factor that sets Allied Press apart from the Australian corporates that publish every other metropolitan New Zealand newspaper, and which are open to the accusation that they have no interest in New Zealand beyond making money.
But although it’s tempting to romanticise the Smiths as heroic guardians of local independence, the company isn’t in business for sentimental reasons. Sir Julian Smith, the chairman, managing director and majority shareholder, is widely acknowledged as a shrewd businessman who has fought off takeover bids and cleverly exploited the strategic strength of his southern citadel, sometimes playing off the two big newspaper groups against each other.
A veteran Dunedin journalist says Smith, who was knighted in the recent New Year Honours, appears never to have made a bad commercial decision. When the firm installed a new multimillion-dollar printing press in 1998, the word locally was that it paid cash. Even now, after some of the most turbulent years in newspaper history, Allied Press is reputed to have a substantial war chest.
Besides the ODT, it has a majority share in the daily Greymouth Star, owns the regional TV stations Channel 9 in Dunedin and CTV in Christchurch and publishes a string of free community papers.
One grudging admirer describes Smith as a “difficult bastard” who stubbornly resists change, doesn’t like travelling out of Dunedin – unless it’s to his holiday home at Wanaka – and has adapted only grudgingly to technology (“I think he’s only just discovered email”).
But the same observer is almost wistful when he talks about the old-fashioned values that prevail in Smith’s realm. By industry standards, the paper is well-staffed, he points out. “You can see the corporate sword hasn’t been through the place.”
He adds that the company is loyal to its staff and vice versa, as is evident in the number of long-serving employees. In an industry where redundancies are commonplace and older staff are usually the first to go, the ODT is notable for the number of grey heads.
A telling indicator of the no-frills Smith style is that important visitors are sometimes taken to lunch down the street at the Best Cafe, a 1960s-style grill room where the house speciality is blue cod and chips.
A MIND OF HIS OWN
Smith is old-school, a throwback to earlier generations of New Zealand newspaper bosses. Clichés about ink in the blood come to mind. Seated behind his desk in a wood-panelled office that is showing its age, the 69-year-old is initially gruff and seems suspicious of the journalist who has flown down from the North Island to question him.
He appears impatient and mutters that something (the interview, perhaps) is a pain in the arse. This corresponds with his reputation as a man with a crusty exterior and a mind of his own.
But as the interview progresses, he warms to the subject. He’s proud of his family’s long involvement in Dunedin newspaper publishing and takes time to explain the ODT’s convoluted history.
Smith’s great-great-grandfather, George Bell, arrived in Dunedin from England during the Otago gold rush of the 1860s and got a job writing editorials for the ODT under its founding editor, Julius Vogel (later to become New Zealand premier). In 1867, Bell went out on his own, launching the Independent and later merging that title with the Evening Star, which he acquired when it fell into the hands of receivers
Bell established a newspaper dynasty. His grandson, C Stanley Smith – Julian Smith’s grandfather – was chairman and managing director of the Evening Star in the 1920s when the paper moved into the handsome building that is now the Allied Press headquarters. Designed by distinguished architect Edmund Anscombe, it is listed as a Category II historic place and is part of a historic precinct with the nearby law courts and the ornate Dunedin railway station.
Julian Smith’s father duly served in turn as chairman of the Evening Star, which merged with the ODT in 1974 to form the publicly listed company Allied Press. The Star ceased publication in 1979, one of many afternoon papers to fall victim to declining sales as a result of competition from television, and the ODT moved into the building.
Prior to 1974, when he joined the board of the Star on the death of his father, Julian Smith had no involvement in the newspaper business, although he’d been in and out of the Star’s offices all his life. “I’d always been told not to expect a job here,” he explains.
“I was expected to make my own way in the world.” An accountant by training, he was then general manager of local fruit and produce firm John M Fraser & Co.
He was soon to show both his sharp business instincts and his strong sense of parochialism. Allied Press learnt that outside interests – Smith mentions the name of Ron Brierley protégé Bruce Judge, who was later to become a central figure in the 1980s sharemarket boom and bust – were quietly amassing shares in the firm with a view to gaining control. “We risked losing ownership out of Dunedin,” he recalls.
In cahoots with the chairman of Fraser, Smith formed a new company, Otago Press and Produce, and executed a reverse takeover of Allied Press, thereby seeing off the interlopers and ensuring the ODT remained in local hands. As part of the deal, Smith became managing director.
In the mid-1980s, it again became necessary to defend the paper against what Smith terms “unfriendly share-buying activity” – this time thought to have been from now-defunct Auckland-based NZ News, owner of the Auckland and Christchurch Star dailies. Swift action was imperative; as Smith points out, “I was still in my thirties. If someone had taken us over, I would have been buggered.”
The strategy this time was a management buyout, the result of which was that ownership and control reverted to the Smith family and the firm became Allied Press again. Julian Smith ended up with 60% and his younger brother Nick, the genial business manager of Allied Press, got the rest.
Julian Smith laments that more old Dunedin businesses weren’t able to hold their ground. Too many – banks, woollen mills, engineering firms – were taken over or shifted north. The Hillside railway workshops are the latest symbol of Dunedin’s decline. It’s tragic, he says.
He has little confidence in the ability of overseas-based boards to make the right decisions about their New Zealand operations and says they need strong New Zealand managers to point out “we do things differently here”.
That can only be interpreted as a swipe at Fairfax and APN, although Allied Press has a news-sharing arrangement with APN and Smith says he gets on well enough with the Australians and their New Zealand managers.
Lest there be any doubt about his feelings, he makes it clear he is still unhappy at the dismantling of the industry-owned news agency NZPA in 2011, and by changes forced on other long-established joint industry initiatives such as the Newspaper Advertising Bureau. These were New Zealand models that worked, he says. “We could sit around the table and not be at each other’s throats.”
The problem, as Smith acknowledges, is that the industry’s dynamics have changed irrevocably. In the halcyon days, newspaper proprietors could agree on collaborative arrangements because there was virtually no head-to-head competition. Each paper served its own region and there was little overlap.
Even when the old family-owned provincial papers were gradually swallowed by Wellington-based INL and Auckland’s Wilson & Horton, long-standing agreements were essentially left undisturbed.
All that changed after Fairfax took over INL – publishers of the Dominion Post, the Press (Christchurch) and the Sunday Star Times, among others – and APN acquired the New Zealand Herald, the country’s biggest paper, originally controlled by the Horton family.
From the outset, the Australian companies, old enemies on their home turf, struggled with the notion of co-operating with each other. Competitive tension between the groups was cranked up several notches in 2004 with the launch of the Herald on Sunday – direct competition for the Fairfax Sunday papers. Fairfax refused to share news with the newcomer, thus triggering NZPA’s ultimate demise.
In the meantime, the industry was being plunged headlong into the digital information revolution – “this bloody internet thing”, as Smith harrumphingly describes it. With the advent of 24/7 news websites that recognised no geographical boundaries, each racing to be first with the news, it was scarcely surprising that cosy old collaborative arrangements were blown out of the water
The new model doesn’t make much sense to Smith – he points out the Australian groups’ flagship titles in New Zealand are losing money – but what can he do? Asked whether it makes him feel proud or sad that the ODT is the last New Zealand-owned morning paper, he pauses briefly before replying: “A little bit of both, I suppose.”
Although Allied Press can’t entirely escape the turmoil engulfing the industry – it recently shed a handful of jobs from its staff of 400 – Smith points out that a private company can be more tolerant of losses than one that has to answer to irascible shareholders at annual meetings.
In any case, the ODT seems to be doing quite well by industry standards. Its circulation has remained relatively stable over the past 10 years while other metropolitan dailies have struggled with declining sales. The paper has an unusually high penetration rate, meaning it’s read by a large proportion of the local population, and a high ratio of subscription sales to casual purchases – a circulation manager’s dream.
It has achieved this through a simple but effective strategy of unabashed parochialism in its editorial content. It’s a rare day when the main story on page one isn’t local. As Smith says drily, “We don’t see much point in competing with the BBC.”
Ironically, the paper is edited by an Australian. Murray Kirkness, 44, began his newspaper career in Tamworth, New South Wales, and married a Taieri girl whom he met in Queensland. They moved to Dunedin with their two sons (a third has since arrived) in 2000.
Before becoming editor in 2007, Kirkness was in charge of the Allied Press stable of community newspapers. A big, genial man, he has a touch of Aussie brashness that sets him apart from his low-key predecessors in the ODT editor’s chair.
He has worked for the big, impersonal Australian media companies and was initially uneasy about joining a paper where the owner was in the same building, but he likes the fact that the Smiths have been publishing newspapers in Dunedin for five generations and “live and work here every day”.
Kirkness is an articulate and energetic editor; an old-style newspaperman who likes to feel the floor vibrate when the press starts rolling and firmly believes that print journalism still has a future.
He says he no longer bristles when he hears people refer to his paper as the Oddity. He’s proud of the ODT’s saturation coverage of local affairs and not embarrassed to joke about the mythical headline “Lone pine survives hoar frost at Ranfurly”.
“Hyper-local” may be the buzz term in journalism, he says, but the ODT has been hyper-local for 150 years. It has reporters in Queenstown, Alexandra, Wanaka, Oamaru and Balclutha and is perhaps the only New Zealand daily that still provides significant coverage of the courts. Few cases go uncovered – not even when a young member of the Smith family appeared on a drink-driving charge.
In 2010, Kirkness greatly boosted the paper’s profile when he and Southland Times editor Fred Tulett launched a joint campaign to retain neurological services in the lower South Island. The successful campaign, under the slogan “It’s a No Brainer”, was a rare example of co-operation between rival papers and attracted national attention. It played strongly to southern pride and solidarity, a factor not to be lightly dismissed in that part of the world.
Still, the ODT has its critics. Dunedin Mayor Dave Cull chides the paper for portraying local issues negatively – a not uncommon complaint about the media from civic leaders – and local journalist Neale McMillan accuses it of not tackling “the hard stuff”. On the red-hot issue of whether to build the Forsyth Barr Stadium, for example, McMillan says the hard questions came not from the paper but from its readers.
Nonetheless both Cull and McMillan acknowledge the ODT is generally regarded with affection locally. Why? McMillan supplies the answer. “Because it’s ours.”
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