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WAS THE STAFF HARSHLY TREATED ? PERTINENT QUERIES OVER AUCKLAND "SUN " DEAL

Shareholders Have Right To Know Details of Sale, and Company's Working Losses

REACHED DECISION ON THEIR OWN

(From "N.Z. Truth's" Special Auckland Representative.) ! With j dramatic suddenness, the Auckland "Sun" has ceased publication, and for the first time since March 23,. 1927, all is quiet on the Auckland newspaper front. ; But the public, and particularly those members of the public who took shares m the illstarred venture, will have some pertinent questions to ask before the final echoes of the crash are allowed to die down. ■■ . For one thing, the public will want to know whether the "Sun's" staff was not somewhat harshly treated, and, secondly, the shareholders will demand to know why they were hot consulted m regard to the sale. ,

DIRECTORS

"DEHIND the "Sun's" sale, of course, ■D there is a tale of roseate dreams that were, never realized. E. C. Huie, managing-director of the concern, successfully floated the Christ.church "Sun," and' then set out to become a New Zealand Northcliffe by extending the "Sun's" activities to Auckland. Possibly, too, he hoped, at some later date, to invade both Wellington and Dunedin, and thus establish a newspaper chain that would girdle the four principal cities. THE "Sun" made its appearance m A Auckland with a flare of heraldzing trumpets. Determined opposition it expected to meet ! and did meet, but with the care-free buoyancy of irresponsible youth it declared itself capable of overcoming each and every one of the difficulties confronting it. Had not the Christchurch. "Sun" careered -brilliantly across the newspaper firmament under the same management, achieving a remarkable success .m . a comparatively short period ? What had been done m the south, it was claimed, could also be done m the north, and all that Auckland apparently had to do was to bow. before the conqueririg invader. But Auckland was, m reality, a very different proposition from Christchurch,' and had not the "Sun" management been intoxicated with the wine of its southern success, and imbued with Northcliffe-like ideas of a great and flourishing combine, it must have realized that the odds were heavily against it. In the first place the "Sun" was pitting itself against two of the soundest and most capably managed To Christchurch " newspapers m the Dominion, two organizations that,, over a long period of years, had built up a very big reserve for just such an emergency. They could, and did, set a financial pace which the "Sun" could not foot, and, m addition to this, there was the fact ttiat the storm clouds of depression were commencing to gather. In Christchurch the "Sun" had been up against weak opposition, and had been able to float to success by the opportunity created by the war for a live and enterprising newspaper. Those factors, however, did not operate m .Auckland. Lower advertising rates and Aineri^ canized . circulation-boosting stunts, including free insurance, gained the "Sun" some temporary ground, but the opposition replied, with surer and safer methods, and it soon became evident that the "Sun" was fighting a hopeless battle. The decisive turning - point came when the Auckland "Star" floated New Zealand Newspapers, Ltd', and invaded the "Sun's"home town by 'purchasing the "Lyttelton Times" and the "Christchurch Star." Both these papers, but particularly the "Star/ made rapid progress under the new management, and the Christchurch "Sun," which had been more or less carrying its younger '•iiiiuiiiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiiiiiniiiiiiiiiiMiiiiiiiiiiii.'iiiiiiiiiMiniiiinii.

brother m Auckland, found itself suddenly confronted with what it had not, -by any means expected— violent opposition. Its position m Christchurch is still strong, but nevertheless it has lost ground, and is probably, m not such a healthy state to-day as it 'was a couple of years ago. The "Sun" had a nominal capital of £300,000, with a paid-up capital of £256,000. The Canterbury Publishing Company, proprietors of the Christchurch "Sun," held 100,000 fully paidup shares, while 133,000 £1 shares were issued, for public subscription. Sale Price . Just what sum has been 'lost is known probably only to the management. Only, very meagre details have been given io shareholders) most of whom do not even now know how or where they stand. But establishment and flotation costs must have run away with a tremendous sum, < and even conservatively estimated the annual loss must have amounted to over f 20,000. For the first eighteen months or so the loss must have been considerably greater. The sale .-»■ . the "Star" was concluded last Wednesday, and on Saturday evening the "Sun" made its final appearance. The shareholders were not consulted as to the course the directors had determined upon, and even executive members of the "Sun" staff had no idea that negotiations for the paper's sale had been concluded. The matter was handled entirely by the directors, who, holding, contVolling powers, did not bother to consult the public which had subscribed something over £100,000 towards the "Sun's" attempt to spread its tentacles into Auckland. The public, indeed, was ridden over rough-shod, and even now shareholders are, m the dark as to the precise terms governing the sale. \ . ■ No announcement has been made concerning either the price paid by the "Star" or the conditions of the sale. It is practically certain, however, that one condition was that the "Sun" should not again invade Auckland, and "Truth" understands that the purchase price .works out at 8/6 per share, which is slightly m excess of what the market has been valuing them at for some time past. Whether the "Star" has bought the whole of the "Sun's" plant and machinery has not been stated. But doubtless there would be a bank overdraft Swan-song of something like £35,000, debentures totalling m the vicinity of £20,000, and mortgages, to be met — creditors who would have securities on the company's fixed assets. • It is unquestionable, of course, that the "Star" purchased the "Sun" simply to prevent another syndicate, with more powerful' financial resources, entering the field. It wanted to close up all opposition, and it has succeeded. \ According to the "Sun's" farewell message, the "Star" dealt fairly by its fallen rival. "The deal was finalized on Wednesday," said the "Sun." "The details do not particularly concern the public, but we desire to say that N.Z. Newspapers, Ltd., have met us fairly, and that the transaction is an equitable, adjustment of the position as it stands today." \ But the "Sun" is a public company m which public money is invested. When it went to Auckland, it sold over 130,000 shares to the public, and the investing public has a full right to know

exactly what the terms of the sale were and what the "Sun" has lost since it commenced operations m the north. It is not for the directors to judge whether the sale was an equitable one. That is for the investing public, and Mr. Huie and his fellow directors would have been much better advised to have consulted their shareholders before taking the drastic step they adopted. Then there is the manner m which the staff- was informed of the paper's sale. Not even executive staff members appear to have known that negotiations were under way for the j paper's sale, much, less, that these aegotiatibns had been concluded. : The first intimation; -that the '.Staff receivediw,^ ■mips^m^g& : up on the lett»r-rafelfi^-at^ad^^] on Saturday, to the . effect; ' thai 'I the ■ "Sun? would cease r publication that night. No other warning was given to the men and women who have suddenly found themselves deprived of their livelihood, and are now suddenly thrown on the unemployed list. In the "Sun's" farewell editorial not one solitary mention is made of the staff. They, are not even thanked for the co-operation which they had lent from the very start; no suggestion is put forward that their interests were protected m any way by the ' terms of the sale. All that happened was that a few hours before the final issue was to be put on the streets, they were curtly told that they were now jobless, and that the "Sun" was ceasing • publication that day. And The Staff? Sporting writers at the Avondale races heard the news, and thought that it was merely a joke and that they were having their legs pulled. Disillusionment came swiftly, however, and they suddenly realized that they had, almost, overnight, joined the ranks of the unemployed. • . According to some statements, the rumors which began to flqat around four or five months ago,* to the effect that the "Sun" would not be able to remain m existence much longer, were officially denied, to senior members of the staff. "Truth" does not know if this is actually a fact; but this paper has been told that the "Sun" management definitely informed members of the "Sun's" staff that it would be able to carry on at least for another year, and that as a result of this, some members of the staff entered into commitments which they would'- not otherwise have undertaken. But even if this is not the, case, the "Sun" seems to have dealt harshly with its staff, just as it dealt harshly with its shareholders, and those readers who, as a result of its competitions, have signed up for lengthy periods as subscribers. When the "Guardian" m Sydney was sold out to Associated Newspapers, Ltd., spme time ago, it was made a condition of the "Guardian's" sale that its staff should be retained for at least three years. But did the Auckland "Sun," which, with its bigger brother m Christchurch, has so persistently patted itself 'on the back for its encouragement of New Zealand literature and journalism, insist on any provision being made for its staff? Do the directors intend to make them any compensatory payment m addition to that m lieu of notice? It has been published, of course, that the . employees . received a month's salary m lieu of notice, but "Truth" has reason: to believe this applied only to the actual literary staff. Perhaps the directors of the "Sun" will publicly state whether this is so or not, and if not, is it intended to make somewhat, similar payments to ; the' employees on the' mechanical and. business departments? What will the public get back for its investment? What effect will the sale have on the Canterbury Publishing Company, proprietors of the "Sun" ? the Christchurch "Sun" was, of j

course, not sold; but its interests were so interwoven with its Auckland offshoot that the death of that venture must have some effect .on its financial position. These are questions which demand an answer, and the management of the "Sun" would be well advised to take the public into its confidence, both with reference to its staff and the position which its shareholders now occupy. i!iiiiiiiiiii|niiii!iiiiiiiiiiiiiiiiiiiiiiiiiniiiiiiiiiiiiiiiiiiiiiiiiiniiiiiiiiiiMiiiiit' | TO WOMEN | I Don't forget to read | 1 "Truth's" Special Gas Cook- | | ing Section— Pages, 16 1 to 381. § ffll^illJllllMllliriMMy M.MnilltnMlMlMlMjtlMVllipilMMJlltJllMlMnlMllltilljr?^,

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Permanent link to this item

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Bibliographic details

WAS THE STAFF HARSHLY TREATED ? PERTINENT QUERIES OVER AUCKLAND "SUN" DEAL, NZ Truth, Issue 1294, 25 September 1930

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WAS THE STAFF HARSHLY TREATED ? PERTINENT QUERIES OVER AUCKLAND "SUN" DEAL NZ Truth, Issue 1294, 25 September 1930

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