Rupert Murdoch’s national newspaper, The Australian, is going
through troubled times under editor-in-chief, Chris Mitchell, as he
juggles a difficult financial position and low staff morale. Under
Mitchell, The Australian has become a top-heavy newspaper
dominated by a large number of senior journalists on six-figure sums –
many of whom were hired by from the Courier Mail, where Mitchell was previously editor-in-chief.

The reasons behind the mounting queue of defamation suits are twofold:
the first is a legacy of the paper’s former maverick finance
commentator Mark Westfield and the second is the laissez faire approach
to running stories by Mitchell and his new national chief of staff,
Paul Whittaker, perhaps the most high profile recruit from Brisbane.

The Australian now dedicates considerable resources to the
coverage of tabloid stories – staking out un-convicted white-collar
criminals, alleged paedophiles, judges, and any number of ‘alleged’
terrorists. Whittaker’s tabloid instincts have also seen resources
gradually diverted away from the paper’s more cerebral issues to
stories featuring celebrities, Big Brother television personalities and
ACA-style, foot-in-the-door journalism.

The paper’s deepening financial strain apparently has Mitchell
scratching his head for ways to remedy the situation. Modest pay rises
have been reserved for a very select group and staff expenses are being
heavily scrutinised. Staff apparently require the consent of Deborah
Jones – Mitchell’s unpopular ‘executive editor’ (read bad news
messenger) – just to shout a meal or coffee during meetings with
important contacts.

As we reported earlier this month, Macquarie Bank is leading the
defamation push after a recent Michael West feature on Allstate
Exploration and the Beaconsfield gold mine in Tasmania. West was
complaining that his piece was being held for too long and was then
gutted by the lawyers. Maybe they didn’t take enough out.

Joining the Millionaire’s Factory in the defamation queue is a very
strange bed-fellow indeed – a man by the name of Mamdouh Habib, whom
many Crikey readers will recall was effectively painted as a terrorist
by the national broadsheet, despite having never been convicted of a
criminal act.By loudly supporting the Howard Government’s agenda on
Guantanamo Bay detainees – that is, jumping to conclusions about the
Australians locked up there – the Oz could help Habib add a large home
to the money he has already claimed from 60 Minutes.

The Oz has recently lost several actions, including one brought by an
accused terrorist. (The paper is said to be preparing to appeal several
cases, including the aforementioned.)

The Murdochs are said to be highly unimpressed by the financial
pressure on the paper as a result of the stream of litigation.
Apparently, some of the cases are not covered by insurance, and Rupert
has gone as far as making a directive that the paper he started 40
years ago will fork out for the defamation suits out of its own
editorial budget, rather than being bailed out by the News Ltd group.

But it isn’t just defamation suits putting financial pressure on the
Oz. Mitchell reportedly had to face the ignominy of paying out his
ex-wife, Deborah Cassrels, who left the paper after he took up with
journalist, Christine Jackman. Cassrels apparently received a
‘significant financial settlement’ after Mitchell released her from a
plum Oz Magazine job with an equally satisfactory salary.

In a classic Machiavellian move, Mitchell had appointed Jackman to the magazine while Cassrels was still on its staff.