David Koch: Empire of the sun

By his own admission he’s been to the edge of ruin, but David Koch, the morning host with the most, is now basking in the glory of the country’s top rated breakfast show. David spoke with Wealth Creator about success, failure and looking after people’s best interests.

Late in 2005 David Koch, along with daughter Brie, made the difficult trek up one of the most formidable volcanoes in the world, Tanzania’s most famous icon, Mt Kilimanjaro. The mount played host to the duo and the Sunrise camera crew who were documenting the climb. It’s a tricky climb, lulling its trekkers into a false sense of security with gentle lower slopes before goading them into climbing the 30-degree ascent. Kilimanjaro stands 5,895 metres, with a breathtaking aura and is crowned by an eternal snowcap.

The beauty of the mountain is in contrast to the difficulty of the climb, but ‘Kochie’s’ climb and conquer attitude saw to it that he laboured on after the knee injury he suffered on the way up and finish what he started. The follow through seems to be a vital part of the David Koch make up, that and a strong desire to not compromise on the things he believes are worth doing. It is these traits that have made him a household name on television and that have built him a reputation as one of the leading finance journalists in the country.

The hypothesis works

Kochie’s career began as the result of a hypothetical takeover of retail outlet David Jones. It must have worked because it attracted attention from Brian Frith, the then finance editor of The Australian newspaper (who was the husband of a mature age student in Kochie’s accounting class). In the midst of a part time accounting degree, Kochie was offered a job with the newspaper. “I was working part time as an accounting clerk so it didn’t take much time to accept the offer,” he says.

And thus a media career was born. Having worked for The Australian, Kochie moved to BRW. “I was young at the time and it struck me that it was hard to compete as a young finance journo against icons like Rob Gottleibson and Max Walsh because they were a lot older and age gave you a fair bitof credibility.”

Kochie, however, was determined to break the age barrier. To do this he would blur the lines between what consumers wanted to read and what business editors perceived to be the target market for a business magazine.

“My parents were living in America at the time and there was a great magazine over there called Money,” explains Kochie. “It was probably the first of the consumer finance magazines. Time put it out and I used to read it a lot and decided that I wanted to specialise in consumer finance here in Australia, because no one was doing it. There were no personal finance sections in Australia.”

The time was ripe for something consumer oriented. Treasurer Paul Keating had recently deregulated the financial markets and banking industry, floated the dollar and allowed the introduction of managed funds and compulsory super. People needed information.

“So I started writing consumer finance stories for BRW and you could see a discernible spike in circulation when we put those stories on the cover,” says Kochie.

He then convinced Fairfax to start up a consumer investment magazine. “We bought the old Stock Exchange Journal, which by sheer coincidence and luck went into receivership around the time I was speaking with Fairfax.”

The journal had a subscriber base of 13,000, which provided a solid start for the magazine that morphed into Personal Investment Magazine in 1994 to huge consumer acclaim. “We had policies that nobody could be photographed in a suit and tie. We used a lot of techniques from Cosmo and Cleo magazines
where we would have sealed sections. We tried to make money a whole lot less daunting using traditional consumer techniques, because my view on money, on everything, is that you sell something based on human emotion whether fear, greed, lust or vanity. A lot of people, mistakenly I think, thought the way to
sell money was based on greed. I always thought it was the fear factor. People fear making a mistake, they fear losing their money. So if you can approach a subject in an easily digestible, approachable and entertaining format, it won’t be as daunting for the average Australian.”

The mandate was to take the fear out of finance, to make money information consumer friendly. It hit a raw nerve with the finance establishment and there was some backlash, but readers voted with their hip pocket change. “We copped a lot of criticism for Personal Investment magazine, but we openly said we didn’t
want to appeal to David Murray at Commonwealth Bank or David Morgan at Westpac. I wanted to appeal to their spouses and mums and dads and brothers and sisters. That’s really what started me off in the magazine game.”

The Media Pal

Personal Investment magazine opened many doors for Kochie. He launched the magazine in New Zealand and London. Then every month he would do radio reports on a particular story that had featured in the magazine. “They’d get lots of people ringing in, so they’d say come back next month, and then come back next week. I did a nightly one-hour investment program on 2GB for ten years.” When the General Manager of 2GB moved on to Channel Seven as head of news, he invited Kochie to go along with him.

Kochie puts his rise down to sheer luck, one thing leading to another, but he had a clear vision of what made things work and how to connect with consumers – two vital components in the success of any business or career.

He has, however, faced heavy battles as publisher of Palamedia, the publishing company he once owned. Palamedia was set up as a back up to the unpredictable nature of television celebrity and longevity. It thrived for some time, however with the acquisition of Channel E in 2001, the wheel turned. “I’ve learnt a lot on the business side, the success and the failures,” he says. “I have run my own business and that went through the success/failure rollercoaster like any other small business. It was a small publishing business because you can never depend on television for a living. I’ve got four kids and television is so unpredictable.”

He says the best piece of advice he received about running a small business was from Gerry Harvey, “He said, ‘Kochie, you’ve never been in business until you’ve been to the brink, looked over the edge, seen what it’s like and come back’. I went to the brink, probably five years ago. I looked over the edge, saw it was
bloody scary, lost a lot of sleep and then brought it back again.

One of the keys to my success was going through those hardships. Never take anything for granted and always be grateful for everything. Never think it’s going to last forever and work hard to make sure it continues. I know what it’s like to lose sleep and worry about whether you have enough money to pay staff wages.”

The business was saved when there was an upturn in the advertising market. However being on the brink also pointed out some of Kochie’s shortcomings. “I am a terrible hirer of sales people. I get conned most of the time. Also, I don’t make decisions quickly enough. Usually when you hire someone, you know in the first couple of months if they are going to work out or not. If they ended up not working out I would always put the difficult decision off, thinking the person would turn things around, but I’d start losing sleep over it and then finally get the guts to call them in and inevitably it would be the staff who would say, ‘you are not happy with me here, it’s probably best we parted ways’.”

Once the sales team was right, Kochie brought in another investor, John McNiven who soon after took a majority share-holding with over 30%. John had previously worked for Merrill Lynch and JP Morgan in London, New York and Hong Kong. The company enjoyed a renaissance of sorts, more a stabilisation as My Business magazine gained ground, however in more recent times the company’s shares have fallen substantially.

While many still consider Kochie to be a major player in the group, this is not the case. In late 2003 when shares plummeted it was Kochie’s responsibility for the television and radio division. It was one of the only profitable divisions. Then Executive Chairman David Champtaloup came to Kochie’s defence after an article published by Crikey. He told the finance watchdog website: “David is a director and owns 7% of the company. His management responsibility is for the radio and television division representing about 20% of our revenues. He is not involved, and hasn’t been for the last 18 months, with the management of the other 80% of the business. It is therefore unfair of you to single him out with the blame for Palamedia’s overall performance. Others are responsible for that, starting with me.”

Kochie remains an Executive Director of Palamedia. He is still the face of My Business magazine, which is now published by Hallmark. However he has relinquished his role with the Sky Business Report, which is also no longer a part of the Palamedia stable.

The sun’ll come up

As he wound down his Palamedia commitments, Kochie wound up his role on Sunrise, bringing to the program the same verve and vision that made Personal Investor magazine such a success.

However, there was some debate as to whether he would take on the hosting role. “I was doing the finance report and the co-host had become ill. I never had ambition to become a newsreader and at the time it was very much a news reading show and it was getting flogged by the Today Show. It had 20% of the Today Show audience and it was about that time a new Executive Producer came on and asked me to co-host. I said, ‘look, I don’t particularly want to do it because I think I would be bored. If I can be myself, I’m happy to give it a go’. Channel Seven had much bigger problems than us at the time and they didn’t care, but they saw a spike in the ratings.”

The success of Sunrise was due in large part to the ability of David Koch to relate to his audience, not only on financial terms but also as human beings with interests outside of money matters. This culminated last year with the launch of the Sunrise Family, a membership for loyal Sunrise viewers.

Before being inundated with family members, Kochie with co-host Melissa Doyle had to reinvent their show. They applied consumer friendly principles to the various infotainment and finance segments of the show. “You have to appeal to individuals,” says Kochie. “People have lives, they have interests. I like driving a nice car, but I have no interest in what’s under the bonnet. I would rather trust a mechanic to look after it and drive a car that suits my purposes. I think it’s the same with money. People don’t want to be turned into finance mechanics, they want enough knowledge to understand who’s a crook and who isn’t and they want to build trust with somebody whether it be a bank manager or financial adviser. That’s what we tried to do and that’s how I present finance in the media. Treat it seriously, make it approachable but it’s not the end of the earth.”

To get that message across Kochie has always been himself. “Once you break down the barrier with the consumer, you can connect with them. I always wanted them to look at me and say ‘here’s a bloke who knows what he’s talking about’.”

Personality and the chemistry between Kochie and Doyle have been one of the keys to Sunrise’s obliteration of its opposition morning show. Yet they see themselves as interpreters, not experts. “There is a huge responsibility of trust. I have never ever tipped a share to buy. It’s one of my golden rules. I am the interpreter between what the experts are saying and what you at home are digesting. I will bring you a consensus of expert views, interpret for you and put it in an easily digestible way, but then you have to make the decision because everyone is different.”

The skill to interpret was picked up back in the stock market boom of the late 1980s. “I was a young journo and it was the peak of the boom and there were journos helping people pick stocks based on their own views. That’s what experts are for. We are not in the market 24 hours a day; we are jacks of all trade, master of none. These journos were tipping stocks and when the market crashed everyone quite rightly blamed them because they were talking up companies and often investing in them themselves. They were just gamblers.”

Another key to the program’s success is that each individual viewer is made to feel that they belong to the show. Again it comes down to connecting with people. Something Kochie feels many institutions don’t do anymore, particularly banks. “Financial institutions have disconnected with clients. I can never understand why a big institution brags about how many clients they have and how much money there is under management. As an investor, I don’t care about how many clients you have, as far as I’m concerned I’m your only client. I don’t care if you have $84 billion under management, my $10,000 is the most important thing to me. I think a lot of people feel they are a number and not being looked after on a personal basis. I think terrific marketing people who are far too corporate run a lot of institutions. They should be talking to their mum and dad and brother and sister rather than coming up with fancy marketing strategies.”

And that is the correlation between Kochie’s views on finance and how he hosts Sunrise. All involved in Sunrise treat their viewers as individuals. Opinions matter. “I’ve always thought radio is the most personal of mediums and television has been distant because television has always taken an arrogant stance of basically saying we know what you want and we’ll give you what you need. Our tack is we’re your program, you let us know what you think. I will give you an opinion, but if you disagree let us know and we’ll air your view.”

This ‘people’s’ show averages between 5,000 and 8,000 emails a day. When they launched the Sunrise Family they budgeted for 50,000 members, they had 89,000 after three weeks and struggled to cope with the demand. “Again it’s part of saying to a viewer, if you’re a regular and part of the family you are special to us and we treat you as an individual. We make a point after each show to go outside and sign autographs and talk to people. If people make the effort to support you and you show you appreciate it, I think you’ve got them for life.”

Over night success

After 17 years with the Seven network for whom he started reading the finance report, Kochie is now an overnight success – but his growth has come via the business he has run and the maturity developed via his business commitments. In the course of 17 years he has been heard on radio (Macquarie Radio Network Finance Editor), run Palamedia, reported on Channel Seven and Sky News Australia, written several books on family and business management, even a joke book, written for magazines in the Palamedia and Pacific Magazines stables, and was a Director of the NSW Small Business Development Corporation for six years from 1996.

More recently he has tapered his duties in order to spend more time with his family. There is no more Sky News, though he still writes his magazine columns. “Last year was probably the most enjoyable of my career, but there came a time for my own sanity and the sake of my family that I had to balance things a bit better. I would do Sunrise and then finish at nine at night after Sky. I felt I was in danger of losing my stamina.”

To counter this he made a concerted effort to get fit, which allowed him to better cope with the hours he was working. His fitness culminated in his Kilimanjaro climb and his more recent trek along Kokoda.

The impressive thing about Kochie is that he is as he comes across on television: genuine, affable and caring. He has his detractors, but no one can argue the hours he has worked and the time he has put back into community learning. It is not for his television image either. “It’s important to do it for yourself, not because you think it’s good for your image,” he says. “I get involved in grassroots organisations and get down and dirty and hands on. We do it through Sunrise by putting pressure on certain bodies. We put pressure on the Federal Government to resolve the oil dispute with East Timor. That was a campaign we waged for some time and got some results. Some changes to financial regulation have occurred because of the pressure of Sunrise viewers and that’s incredibly fulfilling.”

Kochie seems always to have been stirred by issues affecting the broader community and inspired by ways to communicate those issues. His own business skills have been questioned due to the near collapse of Palamedia, however when he looked over that edge he ensured he rectified his mistakes and moved on. With Sunrise he has proved he can tackle giants and win, but ultimately he is a man who cares about community values, the most important being family, whether his own or the many thousands who make up Sunrise.

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