Fairfax Media spiraled into decline as a series of Boards of Directors misunderstood or just ignored technological changes, as they maneuvered for perceived political and commercial influence. The cost cutting, centralisation and redundancies which resulted from this decline, may have saved money but they also squandered the news group’s intangible but critical advantages. It seemed that the Boards didn’t really know what made Fairfax unique.
Even in the late eighties, Fairfax retained a formidable reputation for quality journalism, through its newspapers, notably the courageous National Times. In Melbourne, the Age enjoyed strong support from the local community, who saw it as a distinctive voice for Victorians. In Australia, Fairfax Media stands as a major alternative source of news to Rupert’s News Corporation whose politically active newspapers dominate two thirds of Australian major newspaper distribution. More importantly, together with the state funded ABC, Fairfax initiated the difficult and complex stories commercial radio and television were unable or unwilling to pursue.
Colleen Ryan’s new book , Fairfax : the rise and fall, details how far Fairfax has fallen since the benevolently autocratic Fairfax family lost control of the newspaper group. Ryan is old school Fairfax: a former editor and Gold Walkley award winner. She wrote the cracks appeared when young Warwick, the son of Lady Mary Fairfax, sought to re-privatise the company in 1987, with the help of some dodgy West Australian entrepreneurs.
It was a disastrous plan. Warwick would take just three years to blow his inheritance, and banish the family from the empire they had ruled since 1841. In the immediate aftermath of the of the debacle, Lady Mary would tell the SMH [Sydney Morning Herald] that her son ‘had no idea what he was doing’.
But worse would follow. Murdoch and magazine publisher, Kerry Packer struggled for Board supremacy, allowing the disgraced Canadian publisher, Conrad Black to briefly seize control (before he was jailed for fraud). Ryan wrote that Fairfax had become “the plaything for moguls” .
The newspaper industry worldwide has been the victim of structural change that has swept through it like a tsunami. The main culprit is the internet, a marvelous technological innovation that has brought with it online, and free access to online news and information. All newspapers – in fact all traditional media groups – have suffered.
But Fairfax whose classified advertising was a “river of gold” funding journalism, was particularly vulnerable. Ryan said that “incompetent management and lackluster boards let them [classified ads] go to new start ups”.
Former Chief Executive, Fred Hilmer is singled out for particular criticism. Hilmer, an academic and business consultant, admitted after his appointment to lead one of the highest profile media jobs in Australia, that he didn’t read newspapers. When asked what he thought made a good newspaper, he replied “I don’t know yet”.
The old style media magnate, Kerry Packer was less than impressed.
I wouldn’t f… hire him [Hilmer] as a sweeper. For Fairfax to be run by a management consultant is just an act of stupidity. I think its ridiculous. He came from McKinsey and he has never run a business in his life. Now if that is the right criteria for running a newspaper business then I am a Dutchman.
Kerry Packer, ABA inquiry, October 1998
This lack of understanding co-incided with print circulation falls in real terms, and signification reductions in advertising revenue. Ironically, readership massively increased online, as Australians sought alternatives to the News Corp world view.. Hilmer accepted a multimillion dollar retirement package in 2006. The growth of red ink on balance sheets was gradual but cumulative. By 2011, Fairfax media announced mass redundancies of journalists. Ryan described the scene in the newsroom as a generation of Australia’s best journalists walked out the door.
Former News Editor Mathew Moore said that he got into a lift that held a total of 200 years of newspaper experience. ‘It was full of blokes’ says Moore,’ and every one of us was crying’.
- Fairfax MMP closes seven suburban newspapers in Melbourne (mumbrella.com.au)
- Fairfax makes $60m more in savings (news.theage.com.au)