Summer reissue: Todd Scott made millions as a sales genius, and bought New Zealand’s best-known business publication. Then he lost his house. Duncan Greive profiles the country’s most enigmatic owner, and hears some blunt criticisms from the old friend he bought the paper off, Barry Colman.
First published June 2 2020
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When Sinead Boucher bought Stuff for $1 last week, it brought to an end two of the most enduring sagas of New Zealand’s recent media history. The first was the on-again, off-again courtship between Stuff and NZME, publisher of the Herald. Two star-crossed lovers that the Commerce Commission forbade from consummating their relationship.
Yet the second had its own intriguing narrative arc too. That of Todd Scott, owner and publisher of the National Business Review, the oldest and best-known business publication in New Zealand. Scott had himself campaigned for years for the right to be considered a serious bidder for Stuff, but could never seem to get anyone to take him seriously. Ever since Nine, until yesterday the owners of Stuff, revealed they wanted to sell it, Scott made it very clear he was interested in buying, saying he had $40m-$60m on the hook and ready to go, if only someone would take his call.
He saw it as part of a new media empire, with him taking what he learned through the digital transition of the NBR and applying it to the biggest publisher in the country. The difference in scale between the organisations is immense. Stuff is one of the biggest sites in the country, and publishes the Dominion Post and The Press, along with dozens of other newspapers and multiple digital businesses. The NBR is an institution, but also a niche publisher with just 25 full-time staff.
This did not blunt Scott’s ambition. When Bauer Media NZ, the country’s biggest magazine publisher, abruptly collapsed, he raised his sights further. “Here’s a ballsy call,” he said in an interview with his friend Shaun O’Neill, owner of the Essential talent agency, conducted during lockdown. “I believe that Stuff is gonna fold the same way Bauer folded.”
He was responding to a question about where the NBR would be in five years’ time. Scott said he thought he would own Stuff and the Bauer titles, adding mastheads like The Listener and Metro to the burgeoning imagined empire. “NBR Stuff, Listener Stuff, North & South Stuff.”
Last Monday those dreams came crashing down with the news that Boucher had succeeded where he and NZME CEO Michael Boggs had failed. The following day, I received a call from Scott, who I’d been trying to interview for weeks – ever since he made his plans public on Twitter. He’s a prolific and at times erratic user of the platform, hectoring and firing columnists and contractors – “lobbing the odd hand grenade”, as he puts it, claiming it’s done “strategically”.
On that Tuesday, though, it was a far more subdued and reflective Todd Scott on the phone. His visions of empire in tatters, all his big talk ultimately having produced nothing. He asked me to wait before starting the interview, saying, “I’m walking outside to go into my office, which is actually the motorhome parked in the driveway.”
The motorhome is a TrailLite Landmark 700 series, a well-appointed four-bed vehicle that retails for more than $250,000. It’s currently parked in the driveway of his mansion in Auckland’s affluent seaside suburb of St Heliers. He and his wife Jackie will soon vacate the property, having sold it in April. Then the motorhome will cease to be Scott’s office, and become where they live. It’s part of a great realignment of his life; he has talked about giving away his suits and selling his books too.
It is a striking image. Last week Scott had dreams – and, he says, private equity backing – to complete its merger with two other media powerhouses. Within a few short days, and Boucher’s move, it all fell away. The would-be titan of New Zealand’s media industry finds himself alone in his motorhome, making plans to head south chasing good wifi, wondering why he could never get anyone to take his plans seriously.
The butcher turned sales master
Todd Scott’s story is no tragedy. In fact, he’s had one of the most entertainingly circuitous careers in New Zealand media. He started his working life in butchery. “I was actually good at it – in 1989 I was Young New Zealand Butcher of the Year.” Not long after, though, he was drawn into radio, presenting on More FM, and eventually moving into television, where he hosted Lotto for some years and had a stint on Target. But it was in sales where he found his true calling. It’s a part of the business many journalists are sniffy or suspicious about, but one that pays the vast majority of its wages.
Scott joined RadioWorks and rapidly became an indispensable part of its sales operation. For years he operated on commission only, taking his energy and drive and turning it into repeat business. It was during the last golden age of New Zealand media: Google was barely out of the garage, Zuckerberg was still at Harvard, and the system still worked. Scott earned around $400,000 a year while selling millions of dollars in ad spots, and was perfectly happy, until a chance encounter that changed his life.
He met Barry Colman in a corporate box at an All Blacks test against Ireland played in freezing conditions. Colman, now retired, is a media industry titan, owner of dozens of publications during a decades-long career, with an estimated net worth of around $160m. The pair hit it off, and a couple of weeks later Scott, who lived in Wellington, received a call summoning him to Auckland for a meeting. Colman picked him up in Rolls Royce Phantom and told Scott over lunch he wanted him to lead a digital transition for his flagship publication, the NBR. Colman agreed to match his average earnings from the previous two years, and Scott agreed to join him. He hit the NBR like a hurricane. “I literally did take over his business,” Scott told O’Neill. “People who only answered to him were answering to me. I took control, because I needed to.”
The Colman years
In time, Scott became deeply entangled with the NBR, and Colman granted him a profit share, but one with a vicious provision – if profits shrank radically, Scott would end up writing Colman a cheque. This was 2008, the beginning of the GFC, a tough time to be selling anything. Despite the potential for calamity, the post-GFC recovery was very kind to Scott, and he says he earned over a million dollars both years the profit share was in operation.
He raised the prospect of buying the business outright, but Colman initially demurred. Scott kept at it, and eventually they agreed to terms, leading to his buying the venerable National Business Review in 2012, for an amount rumoured to be around $12m.
It was an opportune time to sell a media asset. While the digital disruption was well under way, most well-run media businesses remained very profitable, and the scale of the havoc the tech giants would wreak was not yet fully absorbed. And besides – Scott and Colman had moved early into online, and established a paywall from the start, so the business seemed well-positioned to withstand what was coming.
Yet today the price paid is widely seen as significantly overvaluing the asset. “It was a fleecing,” says Scott. “That’s what it was.” Colman feels very differently, telling The Spinoff the relative value of the NBR has been impacted by its largely abandoned ventures into multimedia and neglect of the print product.
This dispute would be a footnote were it not for the way Scott acquired the NBR. It was through a method known as vendor financing, wherein Scott essentially took on a huge debt to Colman, rather than taking a loan from a bank – which might have been leery of making such a large loan to an individual in such an unstable industry.
As part of the deal, Colman retained the ability to keep an eye on the NBR’s accounts, so has been privy to the business’s fortunes ever since. That view in, the size of the debt, and the relationship between the pair set the stage for a deeply tumultuous period in Scott’s life.
A dramatic decade
Scott is an atypical owner and CEO. If not trained in business, executives in this industry typically come from either journalism, like Boucher, or accounting, like NZME’s Michael Boggs. To have a salesperson owning and running a journalistic organisation can give it a particular type of ambition. Jane Hastings’ tenure at NZME is typical – known as “Hurricane Jane”, she threw herself into an expansive vision for the group’s future, starting video service WatchMe and the Alternative Commentary Collective – one of which has become a real asset to the company, one less so.
Todd Scott had a similar mentality. He saw a future without print, with the NBR as a full-service multimedia empire – and seemed impatient to get there. He built a well-appointed audio studio, started publishing strong podcast packages from the likes of Andrew Patterson and even recruited Simon Dallow and Susan Wood to front video work. The venture was dogged by low views, often in the single or double digits, and has been significantly scaled back over the years.
He also began using Twitter in unconventional ways, sending instructions to his staff, ranging from the mundane (keep the kitchen tidy!) to the very serious (critiques of individual stories), while self-styling himself as “raw and real”.
It all boiled over in 2018, in a chaotic period when in quick succession Scott and the NBR:
- Published and then pulled down Bob Jones’ notorious “Māori gratitude day” column.
- Published a column from Matthew Hooton that defamed then senior National cabinet minister Steven Joyce.
- Fired Hooton for the same column.
- Terminated a longstanding contract with BusinessDesk over an accurate but oddly sympathetic story about the liquidation of a Wellington restaurant.
- Lost senior reporters and editors Duncan Bridgeman and Chris Keall to the Herald.
Almost all of this either played out on Twitter or saw Scott giving his account of it in something like realtime. He developed two abiding obsessions during that period, perhaps because both conspired to cost him a lot of money, either in lawyers’ fees or theoretical revenue forgone.
The first is a loathing of opinion in almost any form, something he expounded on recently. “Who gives a flying f about the opinions of Mike Hosking, Kate Hosking [Hawkesby] or Lizzie Marvelly?,” he asked O’Neill. “Opinions are cheap. Just like a fart.”
The other is a long-running and furious campaign against media agencies that refused to advertise in the NBR, or asked that the company pay commission in return for placing advertisements on their clients’ behalf. “You are not qualified. You are not knowledgeable. You are not passionate … I will not pay you a commission.”
Within years Scott would be bragging about how empty of advertising the NBR’s pages were – a somewhat strange situation for a publication run by an award-winning salesperson.
This also extended to the developers of his website and app, both of which appeared perfectly adequate, but led to strong claims made against the firm that developed them. Evidence of how little faith he has in the NBR’s app: it now directs users to open a mobile browser.
In 2018, the Herald’s Matt Nippert, an ex-NBR journalist himself, wrote a story addressing a potential source of all this drama. His former boss and lender Colman filed a general security agreement over Scott’s company, Fourth Estate Holdings, in late 2017. Not long after, Scott extended the mortgage on his home. All the while, Colman watched the NBR’s accounts through the window his debt granted him with a growing sense of unease.
The big swing
All this forms the backdrop to the events of the recent lockdown, when Scott and the NBR, like the rest of New Zealand and the world, stared in horror at Covid-19 and all that came with it. On a practical level, he made the decision to send his staff home a week before level four began. He boasted about the generous $200 per month allowance he’d granted them, and seemed to enjoy the contrast between that and the turmoil at his larger competitors, which were shutting radio stations, making people redundant and asking staff to take pay cuts.
As an event, the virus was fraught with danger for the media – those reliant on advertising revenue were massively exposed to the collapse in it associated with the lockdown. Yet that peril also contained the seeds of opportunity. Scott started tweeting again, and recording videos. He seemed to see the economic impact of Covid-19 on the media as a kind of cleansing fire, one that might finally allow him to get in front of the right people, and achieve his vision of purchasing the likes of Stuff and the recently collapsed Bauer brands.
You saw that flexing not only in his tweets, but in an advertisement for NBR that screened during TVNZ’s 6pm news. It’s the most expensive ad spot in the country, and on one level was a canny ploy – sources suggest it cost just $5,000 due to the lockdown, a fraction of what it would normally. Yet the production values were deeply compromised, with one observer describing it as “clip art”, not unfairly.
Despite Scott’s big talk and bold moves, the NBR was not immune to the pandemic’s impact. Having sent his staff home and seen that the site continued to run fine, he elected to make the end of the office a permanent feature of the business and put the newspaper’s downtown Auckland character offices out to sublease. A similar shift played out on the distribution side. The government’s decision to ban the publication of magazines and non-daily newspapers appeared to preclude him from printing under lockdown. And while it later relaxed that rule to allow most newspapers to continue publishing, Scott made the decision to cease printing the NBR indefinitely.
The move infuriated Colman, who called the cessation of printing an “unmarked grave” for the newspaper, and believes Scott used the pandemic as an excuse to kill it off. “He claims conveniently it was killed by the virus when delivery was temporarily halted. I think a lack of parental care was responsible.”
By early April, Scott was caught between the halting operation of the NBR and the media empire he believed was more accessible than ever before. From his motorhome office, he worked to try to square the circle – but all the while the big debt hung over him.
Scott forecast that he would be unable to pay August’s forthcoming instalment, and told Colman as much. He got a decidedly unsympathetic reception from the rich-lister, who accused him of trading while insolvent, and threatened to call in the receivers.
This was what finally ended the duo’s decade-long business relationship. After rejecting an initial offer, Colman found the second acceptable, and agreed to a final payment that would see the debt settled after eight years. To make the payment, Scott sold his home, settling for $5.15m, which, when coupled with a loan from ASB, saw the debt repaid in full, and finally made him the sole owner of the publication.
The pursuit of Stuff
Despite the pain of realising his years of hard work had taken almost everything but the business from him, having Colman off his tail allowed Scott to renew his focus on the twin prizes of Bauer and Stuff. He continued to talk about his strong relationship with Sydney-based private equity firm Anacacia Capital, yet became frustrated as Nine and its bank, Macquarie, persistently refused to engage with him.
What happened next is widely known, but still a neck-snappingly fast turn of events. In the space of two short weeks, NZME CEO Boggs announced an emergency appeal to the Commerce Commission for permission to acquire Stuff for $1. An hour later Nine released a statement saying it was unwilling to sell to NZME, and that talks between the two parties had broken off the previous week. Then there was a quick trip to the high court, before Boucher ended up shocking New Zealand’s media with her purchase of Stuff – the biggest newspaper chain in the country, sold for less than the price of a newspaper.
The mood among Stuff’s journalists seemed ebullient – largely because Sinead is one of them, and mostly liked and respected by the newsroom. But also because she is not Todd Scott. During a period when he was nominally courting Stuff, he took time out to cast incredibly serious and entirely baseless doubts on the company’s integrity.
My guess is that the government increased Covid ad budget significantly going directly to the big media outfits who made the most noise. Bosses will have instructed their journalists to stand down. https://t.co/MvmculboOh
— Todd & Jackie Scott. Co-Owners @TheNBR (@ToddScottNBR) April 21, 2020
When he called on Tuesday last week, Scott had come down from the high of his doomed hunt, and was in a reflective mood. “I’m disappointed, but also relieved,” he said. “You go all in on something and then you don’t get it and obviously it’s disappointing because you had your own vision, and had you had the opportunity, you would have carried that out.
“But at the same time, you see a worthy opponent that gets the same opportunity, and I look at Sinead and I go, ‘God bless you, and everybody that sails with you.’”
In his mind, the Bauer titles made sense only with the juggernaut of Stuff there to hold them together, so the big project collapsed entirely with that one piece of news.
Within 24 hours of the deal falling over, Scott had another big plan. He and his wife Jackie will hit the road in a month’s time, pointing the motorhome south and seeing where it takes them. But as soon as Fiji’s border opens, they’ll be on the first flight they can book, with the pair planning on spending at least a year away. Under the new NBR reality, with no office and no print edition, geography becomes largely irrelevant. Scott plans on running the business remotely for as long as he feels like it.
Scott’s self-image is of a battler who made good, who didn’t make every decision right along the way, but is content with the hand he’s holding. Yet others don’t share that view. A former employee called him a “prick”, while a former contractor characterised him as a “bully”. Colman is unequivocal in his assessment.
“Scott has become a tragic figure of ridicule,” Colman wrote in an email to me. “His grandiose future plans have imploded on him. It has been a sad experience to watch his self-destruction. The man who created his own headlines with claims he could take over Stuff was behind the scenes unable to meet his own financial commitments.”
When told about Colman’s comments, Scott resisted the temptation to fire back, as he has so often before. “It’s a tale of the old bull and the young bull, with an outcome the old bull should be proud of but isn’t,” he wrote in a text. “It’s a shame, because every young bull would like to make the old bull proud.”
Only, will he? While Scott says the NBR remains profitable, and that it will have 11,000 subscribers by the end of June, the field is getting more crowded. The Herald continues to beef up an already impressive group of business journalists, Interest and Stuff have strong rosters (and give content away free), while more niche sites like Tourism Ticker show that narrowly targeted work can be sustainably created.
Perhaps the most direct challenge comes from BusinessDesk, a long-time supplier turned rival. Last year it sold a major stake to legendary investor Brian Gaynor, the head of Milford Asset Management. It resulted in him moving his mainstay Weekend Herald column to BusinessDesk, but more than that, saw the platform pivot from a wire service to a pure-play online direct-to-consumer paywalled product. That is to say, an identical proposition to the NBR.
The NBR’s previous entanglement with BusinessDesk ended in the small claims court, and the rivalry is complicated. Co-founder Smellie recently held back a story on Colman threatening to place NBR in receivership due to not wanting to be perceived as punching down, but also finds himself unable to resist the odd shot across the bows.
Double satisfaction: finally got a haircut and discovered my barber subscribed to @TheNBR. Now with @businessdesk_nz – once I'd bought all the potions I'd exhausted in the last 8 weeks, it was almost an equal value exchange.
— @pjsmellie (@pjsmellie) May 21, 2020
Scott will not take the bait.
“I don’t think anybody should be discounted as a threat to our business model, and we don’t take our members’ support for granted,” he says. “We’re very aware of the fact that we set ourselves a higher price to access content [the NBR remains New Zealand’s most expensive media product at $400 per year], so we are fully aware of people’s expectations that the quality that they will find behind our paywall is of a higher nature.”
Is it really higher quality? Scott thinks so. “I think that comes down to personnel.” On that front, NBR journalists Calida Stuart-Menteath and Tim Hunter’s awards for Business Journalist of the Year two years in a row help Scott’s case considerably.
When asked about the Herald, rumoured to be eyeing another raid on his talent pool, Scott allows a flash of his bullishness through. “Let’s just say that NZME aren’t the only ones trying to poach my top staff,” he says. “I’m trying to poach theirs.” So far, while senior editors Hunter and Fiona Rotherham remain loyal, NZME is winning the talent tug-of-war.
The road trip
Today, Todd Scott is preparing for a different phase of his life. After ravenous years spent chasing ever larger scale, he’s admitted defeat, and heading out on the road. Speaking to him lately, he seems humbled, but also content. As if the line drawn underneath the unlikely pursuit of Bauer and Stuff has granted him a kind of absolution. Instead of bitterness at the prizes that eluded him, he talks with pride of what he has achieved. Which is not small: taking a bastion of newsprint and making it a commercially funded and purely online operation is something no one else has accomplished.
He allows himself a measure of satisfaction at his station. “The truth is that in 2012 I had a personal debt of $14 million,” he says. “Today, I have a lovely motorhome.”
In July, he’ll point it south and see where it takes him. To many in business, and in the media, it’s a strange idea – that the man who was until last Monday the proprietor of the largest sole-owner media operation in New Zealand would be reduced to living in a motorhome and fleeing the country’s centre of commerce for a peripatetic life. Yet Scott seems at peace for the first time in a long time, cutting the cord on an ultimately fruitless quest, and trying not to worry about what others might think of him.
“For now, job done,” he says. “Let’s just take some time out.”
Update: this story originally stated that Scott had informed Colman he would be unable to make April’s debt payment. In fact, the payment was due this coming August.
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