John B Fairfax has plenty of reasons to push for change at Fairfax Media and the removal of Ron Walker as chairman. In fact, he’s got 775 million of them.
For a man who has shunned the limelight since joining the Fairfax Media board in late 2006, the public statement released yesterday by John B publicly calling for Walker’s head was extraordinary and, as he said in his statement, “uncharacteristic”.
“Marinya Media (John B’s investment vehicle) can see no sound case to support the continuance of Mr Walker’s directorship or chairmanship for another year, particularly in the context of rapid industry change,” the statement reads. “Renewal must start today. Mr Walker and the rest of the board of Fairfax Media will not be surprised with our views.”
The destruction of John B’s fortune since he agreed to allow Fairfax Media to merge with Rural Press has been nothing short of spectacular.
When the company’s formally completed the merger in May 2007, Fairfax Media’s share price was sitting at just over $5 and the stake held by Marinya Media was worth $1.2 billion.
In just over two years, the value of that stake has fallen to just $390 million. Not surprisingly, John B has had enough and is demanding board and strategic renewal.
Would his fortune faired any better had he not taken the fateful decision to merge Fairfax and Rural Press? It’s impossible to say, and certainly Rural Press would not have been able to avoid the general market sell-off caused by the global financial crisis and the specific sell-off of the media sector.
But it is worth noting that the rural and regional publications have actually been performing much better than Fairfax’s metropolitan dailies, The Age and the Sydney Morning Herald.
Revenue at the regional and community papers fell 8.8% to $669.7 million in 2008-09, while profit dropped 16% to $175 million. By comparison, revenue at the metros fell 14.3% to $689 million, while profit fell 46% to $96.9 million.
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Shares in Rural Press would have fallen, but probably not as hard as shares in Fairfax have.
John B’s sudden preparedness to take a very public stance on Fairfax Media’s future has commentators asking whether he may even lead the renewal of the board himself by becoming chairman.
Perhaps it’s worth referring to an interview he gave in late 2006 to the Sydney Morning Herald, where John B attempted to paint himself as an old-fashioned media mogul.
“A businessman, crudely, is a money-hungry animal, whereas I think I see myself still in the old-fashioned terms of a media proprietor,” he said.
“I think media organisations benefit from having, if you like, the old individual proprietor.”
In the case of Fairfax Media, perhaps he’s right. And perhaps he’s the man for the job.