Kerry Stokes: Seven West Media chairman shares inside stories on decades of success

Self-made billionaire Kerry Stokes isn’t one for reflection, preferring to look to tomorrow, but as he prepares to step down from his flagship company Seven Group Holdings, his remarkable Australian corporate success story — from installing TV antennas to running his own station — is worth reflecting on. The Perth-based businessman’s decision to retire as chairman of Seven Group at its annual meeting in November, handing the reins to long-serving director Terry Davis, is a “stepping aside” move, according to the 80-year-old. He will still be very hands on at Seven West Media, which he chairs, and remain chairman of the Australian War Memorial and his private investment vehicle Australian Capital Equity. Mr Stokes says he decided about a year ago it was time to hand over the top role at Seven Group because it is in a strong position with its chief executive, his son Ryan, supported by a solid board. “I can’t endorse our board strongly enough, it’s one of the better boards in the country,” he tells Agenda. “It’s got a really good chemistry.” It’s fitting that Mr Stokes, a constant figure in historic deals in corporate Australia, announced he was stepping away from Seven Group’s board as it finalised a remarkable move on building products and construction materials group Boral, emerging with a 70 per cent stake. He says Seven Group had little debt and was well placed to move on Boral. It had been on the group’s list for a couple of years, but it was valued at about $12 billion when it first looked at it. A couple of profit downgrades and a few missteps later, the value was soon about $7 billion. Mr Stokes gives the credit of that successful deal to his son Ryan and the company’s adviser Matthew Grounds. “They executed the plan to the day and to the dollar. That was pretty exciting,” Mr Stokes says. Much has been written about his rags-to-riches story — an orphan who was adopted, who travelled from Melbourne to Western Australia to chase work when he was a teenager. Mr Stokes says when he arrived in WA, he knew he had a choice to make. “I said I wasn’t going to spend my life doing antennas or being a labourer, so what else can I do,” he says. “I went to the library and I asked the librarian what I should read, and she got the right books for me, and I realised there were two choices; I could either go through accountancy for management or through sales and marketing.” Reading wasn’t easy for Mr Stokes, as he has dyslexia, which was undiagnosed at the time, but he put himself through night school to take the next step in his career. “When I started at night school, although I still suffered from dyslexia, it’s like circuits got formed ... and learning became easier,” he says. “I did all these diverse units that didn’t give me any qualification; except everything I wanted to learn was in those units, from economics, to accountancy to sales and marketing, construction.” Mr Stokes doesn’t think he has any special skills that have helped him succeed, but says he was never afraid to fail. “Most people are strong and good at something, but most are not comfortable getting it out there in case they fail. My advantage was I never had a fear of failure because there wasn’t anything to fail to,” he says. When he created Seven Group in 2010 by joining WesTrac, one of the biggest CAT dealers globally by sales, and Seven Network, Mr Stokes says many people told him it wouldn’t work — but it’s a risk he took and it is now a $7.7 billion company that continues to expand. “With WesTrac, the big moment was selling WesTrac China. Ryan worked hard to get that business in good shape and we got an excellent price and that was deployed to buy the other half of Coates Hire,” Mr Stokes, who will remain an adviser to Seven Group, says. A key driver for the company’s success has been its relationship with Caterpillar, a move Mr Stokes made in 1989 when he took on the local licence to distribute its products — a licence that had previously been owned by well-known WA business figures Robert Holmes a’ Court and then Alan Bond. But before he became involved in WA’s booming mining industry through his relationship with Caterpillar, Mr Stokes — who moved to the big State when he was 19 and installed antennas before moving into property development — was a major player in the media sector. His first interest in the industry came from his entrepreneur spirit of wanting to advertise his property development business. “We’d finished a series of shopping centres that were first built in WA, one was in Bunbury, and the company down there was called BTW (Bunbury Television),” he says. Mr Stokes and his business partner at the time — fellow WA success story Jack Bendat — were offered a line of shares in the TV station. And after starting with a 20 per cent stake, they ended up with 40 per cent and control in 1971. “I was using it to advertise our shopping centre and to help us with influence,” Mr Stokes says. But it was in 1979 when he bought Channel 7 in Canberra that he started to be noticed nationally. “It was a difficult negotiation and took every bit of my skill to get that one done, as I had opposition from others,” he says. “I wasn’t considered relevant, and when I bought Channel 7 Canberra that elevated my profile. “I didn’t realise until I got there it was the only television station in Canberra apart from the ABC, which meant all the pollies, including the prime minister, watched my station.” Mr Stokes has dealt with a long list of prime ministers throughout his business career and when asked to name the best one, he selects Harold Holt — who held office from 1966 until his disappearance in 1967 — because he was “bright and affable”. He admits to “butting heads” with Paul Keating, and says John Howard was always concerned about being fair. “He always worried that as much as he respected (Kerry) Packer and (Rupert) Murdoch, he always worried that he needed to have another balance so he listened to arguments I put up, which nobody else would,” Mr Stokes says. Despite enjoying the influence he held in Canberra, Mr Stokes took a break from the media sector when he sold his interests, including radio stations, to Frank Lowy in 1987 — just months before the market crash that became known as “black Monday”. Mr Stokes says he stepped away from media at that time because he no longer understood what was happening in the sector. It was a time when Alan Bond, Frank Lowy and Christopher Skase were playing in that space. “The problem I had was I watched the dynamics change immediately where I couldn’t see what was going to happen in the future,” he says. “At Seven Canberra we were buying the Australian Open rights ... it went from $2 million a year to $6 million a year, and then I’m told we have to go higher ... it finally settled at $10 million. “Then suddenly everything was like that. The output deals with the studios ... I decided then I couldn’t influence the outcomes, so Frank Lowy bought us out.” But by the 1990s he was ready to step back in. And not everyone was happy with him returning to media as his attempts to get in on the market listing of the new Seven Network went nowhere. But the media company soon fell into some difficulties and its share price tanked and Mr Stokes managed to secure a 15 per cent stake, which grew to 20 per cent. “I was leveraging myself more than I’d like but I felt comfortable,” Mr Stokes says of securing that interest in Seven Network. The other shareholders were Telstra at 15 per cent and News Corp at 10 per cent. “I finally had them on side and I went in and took the chair and that’s been it ever since. I bought the others out over time,” Mr Stokes says. He eventually set his sights on West Australian Newspapers, which owned The West Australian, and fought to take control. “It’s here, it’s my home, and I missed it,” Mr Stokes says of his decision to buy a stake in the paper, which eventually merged with Seven Media Group to become Seven West Media, which Seven Group today holds a 40 per cent interest in. For the billionaire the media assets are more than a business, they are a passion. “Most businesses are more than a profit undertaking ... most businesses have a soul,” he says. “But in print and TV you actually have other people’s souls and the opportunity to develop and support really good people who have a passion. “They give the community an opportunity to be well-informed and well-advised. “I’m very proud of The West. There was a time recently when everyone wanted to cut them back to the bare bones, I’ve always found it’s a good business and we just have to find different streams and we’re doing that with Ben Harvey’s Up Late TV show and Ben O’Shea’s radio program. There’s lots of different things we’re doing ... making it a complete paper. It’s not a parochial paper, it’s a complete paper.” The avid skier and diver is comfortably settled in Western Australia, with travel outside the State all but grounded as Premier Mark McGowan fights to keep the Delta variant of COVID-19 — that is out of control in NSW — out of his State. “I admire what Mark McGowan has done, and the thing he did that was different to the other Premiers was he locked down but kept construction and mining going with protections that ensured they remained COVID free,” he says of the first lockdown last year. “Because of that our economy had residual life in it.” But the businessman, who stresses Australia needs to repair its relationship with China, which will require face-to-face meetings, wants to see the economy work towards opening. “At some point in time we have to reopen the country and in my opinion, like everyone else is saying, the vaccinations are the key,” he says. “I think once you get to a 70 per cent vaccination rate, and all those that want it have had it then we open the economy and those that chose not to get vaccinated, then they are at risk.” Mr Stokes is also keen to see his two sons, Ryan and Bryant, and his three grandchildren, the youngest who is three months old, and he hasn’t met yet. He says he is proud of both his sons and the fact that they are close. While Ryan is known in corporate Australia for running Seven Group, Bryant is more low key but just as important in the family business. “Bryant doesn’t seek headlines but he works in ACE in property and is doing a great job. He is chipping away and doing his bit every bit as effectively,” Mr Stokes says. While he says he doesn’t like to reflect, one reflection he does allow is looking back to Seven West Media’s debt issues, which plagued the company and fuelled market speculation that Seven Group would let it go. “A lot of people don’t realise that in September 2019, we had a plan for SWM that would’ve seen it pay off most of its debt, which would’ve seen it in a strong position,” he says. “Three months later COVID hits, we lost the Olympics, productions couldn’t be made, things got cancelled, and we were caught with too much debt. I must take responsibility for that as I was chair. We had to work our way through it and that has been very tough. “The market sometimes gets things wrong, and I was disappointed the market would even contemplate that we would walk away from a company, we were never going to walk away, it was never going to go broke.” Mr Stokes admits the banks did get a little bit nervous but argues that in the past 60 years, “no one has ever lost money dealing with me”. “Not creditors, not shareholders — shares go up and down — we’ve always met our obligations,” he says. “Seven West Media is in a strong position now and for me the rewarding part is that normally in this situation one of the units would be the Kingmaker and in this case it’s been both print and television.” When asked to reflect on his significant success, Mr Stokes says it’s not something he does often. “Occasionally I look around and say I actually don’t believe I’m here,” he says. “I’m too focused on what I have to do tomorrow. For me going back into the past is not something I’d normally do, I don’t reflect, I just worry about today and tomorrow.” He has no plans to retire any time soon, but says his wife, Christine Simpson Stokes, would like him to do a little less, something he says he is “working on”.