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Seven Network: Skase & Qintex

Skase and Qintex

This page looks at failed media tycoon Christopher Skase and his Qintex group, which controlled the Australian Seven television network prior to Kerry Stokes.

It covers -

  • origins
  • expansion
  • crisis
  • collapse
  • aftermath
  • studies
  • MGM


Former Sun News-Pictorial and Australian Financial Review journalist Christopher Skase (1948-2001), blessed with film star good looks (which proved somewhat transitory) and chutzpah (apparently a more lasting attribute) entered business in 1975 through establishment of Takeovers, Equities & Management Securities (TEAM) and subsequently formed the Qintex group.

Qintex - like Australian and overseas competitors under the command of Alan Bond (Bond Corporation), John Spalvins (Adelaide Steamship), John Elliott (Elders IXL), Allan Hawkins (Equiticorp) and Robert Holmes a Court (Bell Group) - acted as a corporate predator during the twenty years in which the Australian economy was substantially restructured. Typically they targetted public companies that were under-priced by the market and could thus be acquired cheaply or that contained assets which be readily sold, providing capital for further acquisitions while increasing the predator's market value.

The overall benefits of what in some instances was crude asset stripping remain contentious and in retrospect it would appear that several of the 'bold riders' were far better at doing deals (often at unsustainable prices) than managing conglomerates on a day by day basis.

Given Australia's small population and increasing competition in the retail sector (by 2003 around 70% of consumer retail spending involved the five largest chains) Qintex moved from small scale acquisition of specialist retail assets (eg the upmarket jeweller Hardy Bros, a stake in car dealer Nettlefolds) into property development, broadcasting and opportunistic sharemarket plays.

That move was similar to Bond Corporation's strategic direction, albeit without the scale provided by Bond's access to cash flow from the Swan and Castlemaine-Tooheys breweries.


Qintex's property development centred on two upmarket resorts in Queensland: the Mirage Sheraton at Port Douglas and the Mirage Gold Coast. Qintex subsequently acquired a resort in Hawaii, the 7,000 acre Princeville Mirage, for US$116 million.

In 1984 Qintex acquired TVQ-0, holder of a television licence in Brisbane (Australia's third largest city). The station had been sold by Ansett Transport Industries (ATI), the airline, busline, Bic licensee, financier and property conglomerate acquired by Rupert Murdoch's News group and freight group TNT under Peter Abeles.

Qintex then acquired HSV-7 (Melbourne) and ATN-7 (Sydney) from the Fairfax group during the disposal of assets to fund the disastrous privatisation of that group by Warwick Fairfax Jr.

HSV-7, a network flagship, had been launched by the Herald & Weekly Times (H&WT) publishing empire in 1956. It was sold to Fairfax for $320 million in 1986 after Murdoch took over the H&WT group for $1.8 billion. ATN-7, the other flagship of what became known as the Australian Television Network (ATN), had gone live in 1957 under Fairfax control and was initially affiliated with the Packer family's GTV9 Melbourne.

In 1987 he bought Murdoch's 50% stake of film/video production house Crawfords as part of the dispersal of H&WT assets.

With Sydney, Brisbane and Melbourne stations in hand Qintex subsequently purchased 7 network stations in other locations, eg SAS (Adelaide) and TVW-7 (Perth) in 1988. TVW had formerly been part of the Bell group.


Qintex faced a challenge from the mid-1980s, particularly as finance became more expensive after the 1987 Crash.

Like many of the enterprises it had absorbed the group was becoming asset rich but its retail and broadcast operations were not throwing off enough revenue to meet

  • ongoing property development costs
  • the weight of debt and
  • dividends to shareholders
  • management fees to Skase and other executives

Those fees were to prove particularly important. Like several of his peers Skase had borrowed to maintain his equity in the group. That borrowing was sustained by special management fees, some of which were undisclosed and thus breached Australian corporations law. Some sense of those payments is provided by the revelation that fees to Qintex Group Management Services (the entity at the top of the corporate pyramid) in 1989 amounted to $100 million.


In that year Skase apparently sought to avert corporate collapse by selling the three Mirage resorts to Japan's Mitsui & Co and consumer credit provider Nippon Shinpan. They acquired 49% of Port Douglas Mirage for $151 million, the Gold Coast Mirage for $124 million and Hawaii Princeville Mirage for $158 million. It has been suggested that Skase was to benefit from a 'success fee', apparently undisclosed and paid offshore, of $29 million.

Qintex then secured agreement to take over the MGM/UA studio and film library. It was controlled by colourful entrepreneur Kirk Kerkorian, who had recurrently bought, sold and reacquired film and casino interests.

Skase apparently planned to fund the purchase by 'sweating' the MGM assets in consumer markets - a strategy successfully followed by Kerkorian in licensing the library for VCR and DVD sales - and by pre-selling the rights to Japanese investors. It was the year that Sony bought Columbia Pictures and Tri-Star Pictures from Coca-Cola for US$3.4 billion, undeterred by Matsushita's painful experience with MCA and Universal (later part of Seagram and Vivendi).

He is reported to have reached agreement to sell those rights for $500 million, with the deal falling through when he sought an extra $100 million at the last moment. The extra money would presumably have been helpful, as Kerkorian appears to have raised his price to around $1.5 billion after eliciting interest from Rupert Murdoch.

In the words of subsequent legal action by MGM, Qintex was guilty of a "failure to consumate" the purchase and indeed apparently failed to find the $30 million deposit. The deal was off. Skase subsequently claimed that Kerkorian reneged on the deal when Sony bid three times as much for the 'comparable' Columbia Pictures.

One observer commented that Skase's business model

- was to buy a company, sell the assets and then lease them back. It doesn't take long to burn up the assets that way. You need a progressively bigger takeover every two or three years to maintain the cashflow. It was the end when Christopher missed out on MGM/UA. He was gone and everyone in the places that counted knew it.

Qintex melted down in 1989, unable to satisfy demands by its bankers (exacerbated by delays in regulatory approval to sell further shares in the resorts) and with regulators questioning Skase. Qintex board member Ted Harris had alerted the National Companies & Securities Commission (predecessor of today's ASIC) over concerns that unauthorised payments of several million dollars had been made to Skase's personal company Kahmea.


A year later Skase left Australia and failed to return, pleading bad health and persecution by authorities or the media. His personal debts were estimated at around $172 million.

From his exile in Majorca, where he successfully resisted extradition attempts by receivers and government agencies (including claims of Dominican citizenship), he was presumably able to observe the $3.15 billion failure of the State Bank of Victoria (rescued by the Commonwealth Bank group in 1991), a crisis attributed to imprudent lending to Qintex and its peers by subsidiary Tricontinental. 51% of the Mirage resorts was sold to Nippon Shinpan in 1990. An estimated $18 million was spend by receivers in disentangling and disposing of over 160 Qintex companies.

Skase would also have been able to watch as the receivers bundled Qintex's broadcast interests into a discrete company - Seven Network - in 1991. It was listed on the stock exchange in 1993 and came under the control of Kerry Stokes in 1995 following disagreements about its involvement in pay television schemes promoted by Foxtel, OptusVision and other players.

MGM was sold to Giancarlo Paretti, whose default was one reason for the £9 billion collapse in 1993 of French bank Credit Lyonnais. MGM was acquired by Kerkorian and the Seven Network in 1996 (apparently a mix of opportunism and the network's history of sourcing films from MGM), with Seven selling its interests for US$389 million in 1998. MGM was subsequently acquired by a Sony-led consortium, for around US$5bn, in 2004.

Skase died in 2001. Arguably his most lasting impact was on Australian bankruptcy law. Anne Lampe’s Media Coverage of Complex Commercial Fraud paper features an account of the former magnate being discovered by Australian reporters in his hideaway in Majorca. One picture said it all - the double storey stone villa with Olympic-sized inground pool, surrounded by bougainvilleas and complete with servants, was not what his creditors had imagined when they read about him living in a 'dilapidated farmhouse in Spain'. Those pictures of Skase basking in the sun with his family cooling off in the pool were enough to convince the federal government the following day that the bankruptcy laws, at least as they apply to the return of passports to bankrupts facing charges and creditors, ought to be changed immediately.


Writing about Skase has centred on his departure from Australia following the Qintex collapse and his successful resistance to demands for his extradition from an allegedly comfortably residence in Majorca. With the exception of Catherine Hoyte's 2003 dissertation An Australian Mirage (PDF) there has been no major study of Qintex or its architect.

He features in Trevor Sykes' The Bold Riders: Behind Australia's Corporate Collapses (North Sydney: Allen & Unwin 1994), in Lawrence Van Der Plaat's Too Good To Be True: Inside The Corrupt World Of Christopher Skase (Sydney: Macmillan 1996) - an account by his former son-in-law - and in Tom Prior's Christopher Skase: Beyond the Mirage (Melbourne: Wilkinson Books 1994). A perspective is provided by the career of Jabez Balfour, the UK entrepreneur who skipped the country in 1892 after a corporate collapse equivalent to $800 million and chronicled in Jabez: The Rise & Fall of a Victorian Rogue (New York: Atlantic 2004) by David McKie. For property adventures in Queensland see Samurai in the Surf: The Arrival of the Japanese on the Gold Coast in the 1980s (Canberra: Pandanus Books 2005) by Joe Hadju.

Kerkorian is a figure in The Money and the Power: The Making of Las Vegas and its Hold on America (London: Pimlico 2003) by Sally Denton & Roger Morris and Suburban Xanadu: The Casino Resort on the Las Vegas Strip and Beyond (London: Routledge 2003) by David Schwartz.

Tricontinental is discussed in Tricontinental: The Rise & Fall of a Merchant Bank (Carlton: Melbourne Uni Press 1995) by Hugo Armstrong & Dick Gross, with a broader view in John Simon's 2003 Reserve Bank conference paper Three Australian Asset-price Bubbles (PDF).

Henry Bosch's The Workings of A Watchdog (Port Melbourne: Heinemann 1990) and Of Manners Gentle: Enforcement Strategies of Australian Business Regulatory Agencies (Melbourne: Oxford Uni Press 1986) by Peter Grabosky & John Braithwaite offers insights into contemporary regulatory failures.


For MGM/UA and Kerkorian see the discussion elsewhere on this site.