At a time of transition and great challenges for newspapers, Fairfax was run by people who had no experience of the business, no knowledge of its history and role in the communities in which their newspapers operated and, what’s more, no great love of them.

Michael Gawenda’s use of the past tense in his piece in The Australian today makes this sentence seem curiously archaic, as if we were reading a history of the demise of newspapers written 20 years hence; like an historian sifting through the evidence to establish who killed Cock Robin.

In fact he was talking about his time as editor of The Age a few years back, but as he makes clear his condemnation of Fairfax’s management style applies equally to the current team as it did to Fred Hilmer’s stewardship of the company.

Gawenda has added his name to the growing list of spectators warning that the “slash and burn” approach to management simply won’t work in piloting a newspaper company through the treacherous waters we are sailing in at present. He spent a considerable amount of time in the United States where, most newspaper companies are in the midst of a perfect storm: to a historic decline in circulation has been added the unravelling of the traditional business model for journalism in the form of fleeing classified advertising and the unprecedented business crisis.

Most American newspaper companies are up to their eyeballs in debt, too, which hasn’t helped. Some have print assets which are no longer worth the real estate in which they reside. “You can smell the fear,” according to UK advertising boss Sir Martin Sorrell, quoted in The Guardian last week after he returned from New York predicting carnage in the media sector.

Lugubrious media commentators in the US and UK have been reduced to predicting which of the major media companies will be first to fail. “Don’t blame journalism” writes Paul Farhi in the American Journalism Review: “Newspapers are in trouble for reasons that have almost nothing to do with newspaper journalism, and everything to do with the newspaper business.”

Last week The Australian reported growing stock market pessimism in this country surrounding listed media stocks as expectations for advertising revenue are adjusted downwards in the wake of the global financial downturn. Fairfax Media’s share price has continued to fall off a cliff despite the upbeat tone of its announcements and its bullish presentation to international investors.

One thing all the international punditry agrees on is that the cost-cutting spiral is no way to approach the challenges presented by this extremely difficult climate. In fact most believe it is tantamount to a death sentence: “slash and burn” tactics will “hasten, not forestall, the end,” Farhi writes.

In the same issue of American Journalism Review is a piece by Philip Meyer, Knight Professor of Journalism at the University of North Carolina and a distinguished former editor whose book, The Vanishing Newspaper has become an industry standard since it was published in 2002. His vision of a future of newspapers is one in which only high-quality mastheads that serve their communities will flourish.

He stresses quality. For two reasons: one, the bleeding obvious – to compete in a crowded market a masthead will need to be the best it can be and must have outstanding stories, well written and well edited. That goes without saying. The other aspect of quality feeds into what Meyer calls “community influence” which is key to attracting premium advertising rates – Meyer reports research which shows that advertising rates increased by $3.25 per Standard Advertising Unit (SAU) for each one percentage point increase in the persons who said they believed what they read in the paper.

Trust and quality go hand in hand on newspapers. So the more errors that creep in, the more the “trust” and “influence” associated with the brand diminishes and the more it hurts revenue.

The executives at Fairfax, who gave themselves a hefty pay rise this year but seem intent on gutting editorial resources on their metropolitan mastheads, need to keep this lesson close to their hearts. Gawenda says they are “trashing” their mastheads – he mainly means the celebrity, “lite and brite” feel of their websites, but this malaise is also seen in mistakes that have inevitably crept into the print edition.

Announcing the staff cuts, which are proceeding as I write this, Fairfax CEO David Kirk implied that somehow cutting from the subs’ desk didn’t matter as much. Wall Street Journal spokesman Bob Christie implied the same thing when he said editorial resources would be retargeted with the goal of “fewer editors, more reporters”.

Some people – Jeff Jarvis, whose blog Buzz Machine is at the forefront of new media thinking – thinks that in the “community of online news” that all readers become participants and all participants will act as sub-editors. You’re never wrong for long online. And this may be true for online.

But if as Meyer insists and Gawenda seems to argue, newspapers will need to adapt to serve the “educated, opinion-leading, news-junkie core of the audience” then the key will be providing high-end stories with the same rigorous editorial and production values as have traditionally been applied.

To think you can do this while stripping 35 sub-editors from The SMH and 20-25 from The Age is folly.

Writing in this space last week I pointed out an error in a piece by Paul McGeough and speculated that either he had originated it or the mistake had been typed in during the already over-stressed production process. I gather from friends on the SMH that the latter was the case and that McGeough was not responsible. So I’m happy to set the record straight on that score.

But it isn’t about pointing the finger and apportioning blame. Avoiding mistakes like this (the SMH referred to “September 9, 2001”) is precisely why we have evolved the copy-flow system which is now about to be gutted on Fairfax’s metro mastheads.

If the likes of Meyer, Farhi and Gawenda are right – and there’s no reason to suppose they are not – newspaper publishers will need to focus very firmly on their mastheads’ core strengths: “quality, flair and originality” in order to stand a chance of surviving. Fans of good journalism in this country will just have to hope that Fairfax executives agree. But there’s scant evidence of that so far.

Peter Fray

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