JB Fairfax, flick go the shares, while masthead editors in power struggle
The internal machinations at Fairfax and News Limited surely tell us that we live in an age where the newspaper business is increasingly devoid of sentiment.
It has been a big week in media. Leaving aside, for the moment, the work of the federal government media inquiry, the internal machinations at Fairfax and News Limited surely tell us that we live in an age where the newspaper business is increasingly devoid of sentiment.
As John Hartigan, journalist to his bootstraps, departs News Limited and is replaced by a non-journalist, the travails of Fairfax Media continue, with a landmark decision by JB Fairfax and family to again leave the company that bears their name.
In truth, the departure of the Fairfaxes is probably less surprising, and of less long-term significance, than the internal management changes, of which more later. But let’s deal with the Fairfax family first.
Two alternative and directly contradictory explanations for the Fairfax family sell-up were floating around this morning. Only one of them is right.
The incorrect one is worth canvassing, because there is a serious body of opinion among investment analysts that this is what the Fairfax board SHOULD be doing, even though it isn’t.
This theory is that the Fairfax board, led by grocer Roger Corbett, is intent on realising the value of Fairfax sooner rather than later, by breaking it up and selling the bits. This theory rests on the assumption that Corbett can see that the mastheads are worth more now than they will be in a few years, when their lack of profitability will be evident to all concerned. Therefore, selling them now makes sense. This scenario assumes that interests associated with former chairman Ron Walker might be interested in The Age, and Kerry Stokes is mentioned in the context of The Sydney Morning Herald, with Lachlan Murdoch perhaps interested in the AFR. Those who reckon this is about to happen speculate that JB Fairfax, with his sentimental attachment to the company, sold up because he was not willing to be associated with such cannibalism.
But as I say, this is wrong. The board is not considering sell-offs. Instead of breaking up, the company has embarked on what, at newsroom level at least, seems to be a confused process of nationalisation in which the masthead editors are losing power and influence. The word is that they are very upset about it indeed. More on this shortly.
The other reason the Fairfax break-up theory is wrong is that JB Fairfax has no sentiment about the company. There never has been any evidence that he did, other than the sort of motherhood statements that have helped him to maintain an image of the nice guy in media. Actions speak louder than words. Since the Rural Press-Fairfax merger brought him back to the company some years ago, he has done nothing to protect journalistic values of the mastheads, allowing the cost-cutting Rural Press culture to prevail.
He is selling up now because he has already lost lots of money, and sees no prospect of getting it back. There is nothing happening at board level to make him think that hanging on will be good for him, and in a skittish financial situation, it makes sense for the family to diversity its investments. Simple as that.
The more significant move is the announcement this week of the appointment of Mark Baker as managing editor (national). This follows the appointment in June this year of Garry Linnell as national editor for metropolitan media. These twin moves mean that the two most talented editors in Fairfax are now answering, not to the putative editors of the mastheads, but to a national management structure.
It means that the editors of the metropolitan mastheads do not now have responsibility or control over the Canberra bureaus, the business reporters or, it seems, the investigative teams.
It is hard to imagine any previous Fairfax masthead editors standing for it. In any previous era, it would have been the sort of thing that would have prompted noisy resignations and industrial action from independence committees. But we live in a different era, and these days masthead editors are much diminished creatures -- or they are at Fairfax in any case.
An aside: at News Limited, being a masthead editor is about the most powerful position it is possible to have. Witness the dominance of The Australian’s editor-in-chief Chris Mitchell, or The Daily Telegraph’s Paul Whittaker, neither of whom were really under the control of CEO John Hartigan. One of the interesting things to watch following the appointment of non-journalist Kim Williams to the top News Limited job this week will be whether that situation continues. Expect fallout.
But back to Fairfax. The thinking at senior management level is that the new structure is an efficient means of creating a pool of quality content on which all might draw. The role of the masthead editors and their underlings is thus reduced to deciding what mix of this pool makes its way into their pages, plus the commissioning of content from the diminished local newsroom teams, and the curation of copy from wire services.
In straitened times, this might be seen as necessary efficiency, a sensible use of resources in the new, unsentimental newspaper world.
But on the ground in the local newsrooms, there is anger and confusion. Some reporters have been given contradictory messages about who they are answering to, as the masthead editors put in their bids for control over the top bylines, in opposition to the new power centre of Linnell and Baker.
The management structure is confused, with Paul Ramadge in Melbourne, for example, answering to Melbourne management, while some of the reporters in the newsroom presumably answering to Baker and Linnell and through them, national management.
One senior management source opined that so long as commissioning was done by good editors, it mattered less what the management structure might be. After all, masthead editors already delegate almost all commissioning decisions.
On the reporting floor, one senior journalist had a slightly different take: "I think we will succeed under the new structure. We just don’t know what it is."