Welcome to the future, where two-thirds of Australia’s print media will be owned by Rupert Murdoch and the other one-third will be controlled by Gina Rinehart.
It’s a shocking thought, but this could soon be the reality if the world’s richest woman gets her way at Fairfax, where she is said to be demanding three board seats and the deputy chairman’s role in recognition of her growing stake in the media group.
At the latest count, Rinehart has bought 18.67% of Fairfax Media and is believed to be aiming at 19.9%, which is the maximum she can own without making a full takeover. After that, she can creep her stake up by 3% every six months to ratchet up the pressure.
If the Iron Lady succeeds in elbowing her way into the boardroom, she and her chums (including Hungry Jack’s founder and ex-Kerry Packer mate Jack Cowin, who wants to sit as an “independent”) intend to be hiring and firing editors and shifting the editorial policy of the papers to the Right, or at least trying to get their fellow directors to do so.
Will they succeed? Who knows? But let’s hope not.
So what sort of battle can we expect? When Packer tried to buy into Fairfax in 1991 with a far less-radical agenda, Fairfax journalists came out en masse to defend their cherished independence, and former PMs Malcolm Fraser and Gough Whitlam linked hands on stage at Darling Harbour to oppose the takeover. With an official inquiry imminent, Packer eventually gave up the fight. But it won’t be so easy to keep Rinehart out.
For one thing, she will be unlikely to walk away, however unpopular she becomes. For another, she doesn’t care if she loses a few hundred million dollars — it’s just play money to her. But most of all, she has timed her attack much better, because Fairfax is in turmoil and its big investors are unhappy: its share price is down by almost 90% from the peak, the metropolitan mastheads are haemorrhaging money, and the group is cutting 1900 jobs and closing its main printing plants as part of a strategy to move from print to online.
These are hardly the ideal conditions for anyone in the boardroom or the newsroom to take a stand for independent, public interest, quality journalism.
Some observers — such as Business Spectator‘s Christopher Joye — have suggested that Rinehart is just what Fairfax needs. But that’s nonsense unless she’s just going to break it up and sell off its parts. She has no experience in the media, no understanding of how it works, and has a deep dislike of journalists. She also has an agenda that would be anathema to many readers of the group’s two main papers, The Age and The Sydney Morning Herald, which is to bash the mining and carbon taxes and champion our mining industry.
It seems incredible that Rinehart should believe that such a move would make commercial sense for Fairfax shareholders. But maybe she doesn’t care.
As to Rinehart’s track record in the media thus far, she has seen the share price at Network Ten fall by more than two-thirds since she bought her 10% stake in the TV group in December 2010, from more than $1.50 a share to the current price of 51 cents. There is no evidence that she has helped turn Ten into a fabulous, vibrant network with a quiver full of wonderful programs, or that she has secured its future. The majority of broking analysts still give the network a SELL rating, even at 51 cents. And its strategy appears to rest on a reheated MasterChef and Being Lara Bingle. Meanwhile, its new NZ shock-jock breakfast host Paul Henry has been a ratings disaster, with audiences of about 30,000, or one-tenth of the number who tune in to Today on Channel Nine.
Quite what she has to offer Fairfax, beyond trouble, is not clear. But expertise in financing and developing mining projects is not the first qualification one would look for when choosing someone to develop a viable business model in the rapidly changing world of print media.
Of course, it’s not only Fairfax that is battling to survive. This week we’re likely to see more cuts in the industry, with 400-odd journalistic jobs tipped to go at News Limited. Those who remain in both media groups will be working harder and filing more often to update their newspapers’ online sites. And they will be worrying too about whether their future is secure.
There will be fewer people gathering news, with less time to dig and check. Australia’s radio hosts and online opinion meisters who live off that news feed will suffer too. And so will the audience. It’s a bad week for all of us. And not just the people who work in the industry.