Book Excerpt - Gudinski: The Godfather of Australian Rock’n’Roll

Stuart Coupe, journalist, broadcaster, manager, promoter and music company founder, released his tell-all story about the man behind the bands yesterday. 'Gudinski: The Godfather of Australian Rock’n’Roll' takes readers behind the scenes of one of the most important careers in music industry history. Coupe has allowed TMN to publish an exclusive extract of the tome. Chapter 20, 'Hello Rupert (Part 1)' delves into the sale of Michael Gudinski's Mushroom Records to Rupert Murdoch’s News Ltd.

Hello Rupert (Part 1)

Murdoch and Gudinski had crossed paths in 1992 when Mushroom emerged as a surprise contender to buy the Triple M radio network known as FM Australia Limited. Gudinski claims that this was the catalyst for he and Murdoch discussing Mushroom Records. ‘I initially went to Rupert – not to sell Mushroom but to buy MMM,’ is his version of the way things went down.

Back in 1992, Gudinski and Gary Ashley had sat down and decided that they really did want to expand internationally, and now was the time. They started sounding people out. It was a period when a lot of labels globally were being bought and sold. They had a meeting and discussions with PolyGram and in general let it be known that they were available to talk if the price and deal was right.

Enter Japanese company Pony Canyon, a subsidiary of the Fujisankei Communications Group, with whom Ashley had a relationship. After selling their shares in Virgin Records to EMI, the company, which had a history dating back to 1966, were very cashed up and very interested in new acquisitions. When the possibility of buying into Mushroom was mooted, Pony Canyon was interested.

Ashley went backwards and forwards to Tokyo, nurturing the potential deal Pony Canyon was very clear about their intentions. They wanted to buy 25 per cent of Mushroom Records and expand into this territory. After a number of dinners, though, Ashley gained the impression that ‘clearly Gudinski wasn’t keen on doing business with the Japanese’.

:: Q&A: Stuart Coupe on the Gudinski biography

Cue Rupert Murdoch. He was an obvious potential buyer for Mushroom, and had intimated as much when he and Gudinski met to discuss the radio station purchase

Via Hely, mini-mogul Gudinski got word to major-mogul Murdoch that he was speaking to a Japanese company about selling part of Mushroom. The given reason was that he was keen to expand into the UK and needed the cash flow. Murdoch again expressed interest and told Gudinski that he shouldn’t sign anything until they spoke again.

Gudinski and Murdoch met twice, and the two agreed on the basis of doing a deal.

Ashley was back in Tokyo when Gudinski rang to say that Murdoch wanted in. There was a meeting scheduled in Los Angeles. Ashley rejigged the figures and business plan on the plane and in his room at the Sofitel opposite the Beverly Center in Los Angeles. There, Gudinski and Ashley were joined by Hely.

The trio went to the Fox lot for a meeting with Murdoch. Ashley recalls it being more like a chat between old mates, as Hely (who had known Murdoch’s father and was on the board of News Limited) and Murdoch swapped news. There was a TV schedule on the wall, and a model of the yacht Murdoch was having built dominated the room.

After Hely and Murdoch had caught up, Murdoch turned to Ashley, who clearly looked more the businessman than Gudinski did. ‘Well, what’s the deal?’ he said with the air of someone who had pretty much already decided he wanted to go ahead. He’d done his homework and had people look through the Mushroom Records books.

Ashley outlined the framework of the deal and gave Murdoch a figure. Murdoch asked how he knew if the figure quoted was real. Ashley showed him the offer from Pony Canyon. Murdoch looked, said that was OK and started drafting a brief memo. Deal done. He didn’t want control of the company, as he’d have to put it on the books. A 50 per cent share was enough. Gudinski, Hely and Ashley left the three-hour meeting with the deal they wanted. Gudinski was delighted, skipping across the car park and extolling how he was now in business with Murdoch. This was big time, baby. This was a good vibe. A very fucking good vibe.

As far as Ashley could see, Murdoch didn’t really want to be in the music industry in a big way. ‘He didn’t give a shit. He was more interested in talking about what time he should schedule The Simpsons. We arrived at 10 am, I think someone brought in sandwiches at one stage, and we were out of there at 1 pm with a piece of paper signed by Murdoch.’

The price for 50 per cent of Mushroom Records was reported to be $20 million – although other commentators have put the initial purchase price as high as $40 million, and others have it as low as $15 million.

Gudinski had the chairman’s casting vote so still effectively controlled the company. According to Ashley, Murdoch never asked about the publishing side of the Mushroom business. In his mind, publishing was newspapers, and Mushroom didn’t do newspapers. Anyway, he’d bought 50 per cent of Mushroom Records for what was hardly a lot of money for Murdoch. And it kept Hely – his trusted lieutenant – happy, as Hely wanted to keep Mushroom in the Festival fold. This was more than mission accomplished. Not only did it stay in the fold, but effectively Festival now actually owned half of it.

Whatever the sum – and Gudinski won’t say – it was measured in millions and took a major amount of financial pressure off Gudinski. At the same time it gave him the funds to expand into the UK.

'Gudinski: The Godfather of Australian Rock’n’Roll' by Stuart Coupe is out now through Hachette Australia for $32.99