As investors, senior reporters and now CEOs depart company with the newspaper industry (following today’s resignation of Fairfax chief David Kirk), one mogul is aggressively entering the game.
Billionaire Kerry Stokes is putting money and talent into West Australian Newspapers Ltd, owner of the West Australian newspaper. In an exclusive interview with Eureka Report — to be published this evening — the tight-lipped tycoon tells reporter Tim Treadgold he is going to rebuild the troubled Perth daily newspaper. Stokes also says broadsheet newspapers are “moving to a better position”.
Earlier this week Stokes staged a boardroom coup at WAN ensuring his team now have the upper hand. Interests connected with Stokes now control 22% of the newspaper group, a Stokes insider — Chris Wharton, currently CEO of Stokes’ Seven Network in Perth, is expected to be named the new CEO of West Australian Newspapers, replacing Ken Steinke.
Investors have sold off Australian media stocks — especially Fairfax which has fallen from around $4 at the start of the year to as low as $1.15 in recent week. Nevertheless, the damage to media values has not been as severe as the US where the market capitalisation of the once mighty New York Times recently sunk to US$800 million roughly the same as — believe it or not — West Australian Newspapers.
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In trumping traditional newspapers and free to air television Stokes is clearly supporting his own interests. Still, as a mogul with extensive interests in television and internet it is surely reassuring to see Stokes talking confidently about newspapers. The Packer family in contrast have long since turned their attentions beyond media, mostly to gambling.
Says Stokes: “I’m a proponent of newspapers but I think newspapers have caused their own demise…what people are looking for are cogent, well written articles they can trust.”
In a wide ranging interview Stokes also suggests we are about to a see a resurgence in free-to-air television.
Stokes signals that in the coming year he will consolidate his plans for a media empire that has been forming over the last two years as he retained interests at the Seven Network, developed the internet brand Yahoo Seven (a 50/50 partnership with Yahoo) and moved to effective control of WA Newspapers.
Earlier today Seven was up 4% at $4.79, WAN was up 4% at $4.79 and Fairfax which rose initially on the news of Kirk’s resignation was steady at $1.48. Kirk’s replacement has not been named. However ex-Rural Press executive Brian McCarthy — a favourite with institutional investors who see him as a competent manager and skilled cost cutter — has been named as interim CEO.