Fairfax restucturing coverage: a round up

19 Jun

There’s been extensive coverage of the losses of up to 1900 jobs at Fairfax. Here are some highlights around coverage of the announcement, which has also coincided with Australia’s richest woman Gina Rinehart upping her stake in Fairfax:

The Australian has been reporting that Rinehart is after three board seats, but expects to be offered two. Also, that she is wanting the right to hire and fire editors.

As Australia’s richest person, and Fairfax’s biggest shareholder, Gina Rinehart stepped up her campaign to secure board seats and a say in the newspapers’ editorial direction, chief executive Greg Hywood shocked the media industry with the scale of the restructuring to be undertaken at the 180-year-old company.

Hit by what Mr Hywood called the “perfect storm” of structural and cyclical changes buffeting the newspaper publishing, online and radio group, he revealed the group contemplated a wholesale break-up of its operations before opting instead for the announced restructuring plan.

Alan Kohler in Business Spectator talks about the disconnect between management and Rinehart.

“Australia’s strangest rich person is apparently oblivious to the challenges facing publishers and is interested only in moulding public opinion. Meanwhile the last thing on the minds of Fairfax directors is the influence their editors and journalists might possess.

In other words, the company’s board and its now largest shareholder are at cross-purposes, which is a pretty rum state of affairs. Gina Rinehart has absolutely nothing to contribute to the transformation of the company into a profitable digital publisher and is not interested in it anyway, and no one inside the business is the slightest bit interested in moulding public opinion – they are just trying to survive.”

John Birmingham, a Fairfax columnist says we’ve got to share some of the blame.

 “ … although comment threads and letters to the editor bemoan the decline in standards of journalism, and cry out for more quality and care and less bias, most readers are less interested in hard news than they are in complete tosh.”

Some good background too . The Monthly has put their profile on Rinehart online.

Lang Hancock thought journalists were either “socialists” or “communists”. Gina, too, is deeply scornful of the press. Very few reporters ever get to speak to her, still less meet her face-to-face. In a testy email exchange in late 2010 with Tim Treadgold, the Perth-based resources reporter, she complained about “the established anti-mining journalists (and those who would prefer to do cheap inaccurate shots instead of considering important issues to Australia’s future)”. She went on to grant him an interview, of sorts, by emailing him the questions as well as her answers.

And for more background on Fairfax from The Monthly, here is Margaret Simons in February last year.

Even the optimists within the company acknowledge that if the next few years are mismanaged, Fairfax might not survive as a publisher of quality journalism. To put it baldly, we may lose the Age and the Sydney Morning Herald, or they might be sold off. Even if the names survive, the mastheads may cease to exist as large-scale employers of journalists.

Wendy Bacon argues on New Matilda that journalists need to make the importance of independence known.

If journalists and the unions want the public to understand what is at stake they need to explain how the charter works and be part of a more broadly based community campaign to support public interest journalism, both in and outside the mainstream media. The interests of journalists are not the same as corporate management.

And they have –  writting to Rinehart to sign Fairfax’s charter of  editorial independence. Unsurprisingly, no word back from her.

Meanwhile in the WSJ, Deutsche Bank analyst Andrew Anagnostellis has some further bad news.

Fairfax Media’s Australian metropolitan print business, including flagship mastheads The Age and The Sydney Morning Herald, is worthless despite a dramatic restructuring, in the eyes of Deutsche Bank analyst Andrew Anagnostellis.

The broker said the “nil value” reflects the metro division’s deteriorating earnings profile due to highly competitive conditions under which metro and community newspapers operate, the significantly high cost base relative to revenue and the weak structural industry position.

From Private Media, Amanda Gome has some strong opinions on the restructuring:

So in order to stave off the inevitable, Hywood has announced a centralisation model which is really a huge virtual newsroom that then dishes out commodity news to the different states and to different platforms. And that is the next death knell for The Age and SMH. Already they stand accused of having lost contact with their city communities. As a demoralised Fairfax workforce works even harder with fewer staff to pump out commodity news, their papers will look more like The Australian: nationally focused, authoritative, aloof and struggling to stay ahead. This leaves the door open for many smaller, highly targeted niche publications that will take their news and tailor it to their communities.

Not to be outdone by her boss Eric Beecher, who writes of the time eight years ago when he was asked to advise Fairfax on its future:

Three years ago, just as Roger Corbett was proudly taking the helm of an organisation “envied by media companies around the world”, a new book was published. Written by Jim Collins, well known for his deep studies of how companies work, How The Mighty Fall describes the five stages of the decline of once-successful companies:

  • Stage 1: Hubris born of success
  • Stage 2: Undisciplined pursuit of more
  • Stage 3: Denial of risk and peril
  • Stage 4: Grasping for salvation
  • Stage 5: Capitulation to irrelevance or death.

Under its current chairman, Fairfax Media took less than three years to move briskly from Stage 3 to Stage 4. And if there’s one certainty about the future of the company, it is that the current chairman and board won’t be hanging around to preside over Stage 5.


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