Founder of The Conversation and former editor-in-chief of The Age, Andrew Jaspan, writes the Nine takeover of Fairfax is not only a blow for for media diversity but the deal is also pitched too cheaply.
The news of the Nine Entertainment takeover of Fairfax Media is not just sad. It is bad.
It is bad for a country that already had far too few voices. At a stroke, some of the country’s most distinctive journalistic mastheads (the Age, the Sydney Morning Herald and the Australian Financial Review) will be subsumed into a Nine tabloid and ratings-led TV culture.
Nothing wrong with the Channel Nine view of the world (if populist and derivative programs are your bag) but it needs to be counter-balanced by independent and intelligent output. That diversity largely ends now. We Are The One.
‘Fairfax will exist – it will just be a 100 per cent owned subsidiary of Nine,’ Greg Hywood says – as it happened
A well-informed democracy needs to be underpinned by the pluralism of ideas and outlooks that comes from strong, independent news outlets. The well-respected, grown-up and independent journalistic voice of Fairfax journalism will be the casualty of this deal.
From now on those remaining Fairfax journalists will answer to the whims of Nine Entertainment. That means news values framed by those of A Current Affair and 60 Minutes, tightly laced with the blokey culture of the Footy Show, with cultural cues set by the programming giants behind Love Island, Married at First Sight and Ninja Warriors.
Let’s see how the outstanding investigative units at Fairfax fare under cloud Nine. After all, why does Fairfax conduct its joint investigations with the ABC? Because there is no editorial synergy with Nine.
Why has this takeover happened? Because those responsible for running and leading Fairfax have been clueless and directionless for years in terms of how to safeguard, grow and nourish/cherish the brand Fairfax.
Fairfax bosses are saying, “We give up, we don’t know what to do”
The only card they knew how to play was another redundancy round. And even then they needed outside consultants to tell them what to do and how. Without clear journalism brand leadership from the top, the Age and Sydney Morning Herald have been losing audience and salience in the marketplace.
In effect the Fairfax bosses have said: We give up, we don’t know what to do. You have a go.
No doubt there will be many on the Fairfax board and management congratulating themselves on this move, with big success bonuses to follow. The great helmsman and CEO of Fairfax for the past seven years, Greg Hywood, will have to make do with the millions he made – while shredding the brand.
But wait. It now turns out this so-called takeover is actually the Steal of the Century.
The $4 billion takeover of Fairfax has not cost Nine a cent. It’s just a scrip deal which valued Nine at $1.96 billion and Fairfax $1.92 billion. With a bid premium to get to $4 billion. Nine gets 51 per cent and all the power. And Fairfax loses it all including its blushes.
By unpacking Fairfax’s $1.92 billion assets (valued at $1.2bn for Domain, $260m for the radio stations, and $150m for Stan) that means that Nine got Fairfax’s jewels (the SMH, Age, The Fin, Canberra Times) plus the NZ business, WeatherZone, and the events business for $310 million or less than three times earnings. This is a scandal.
And let’s not forget this fate could have been avoided had Fairfax seriously engaged with the $3 billion cash bids (including debt) last year by TPG and Hellman and Friedman for the business.
A toxic shift
Both bids would have kept the metro mastheads independent, but they would have sold off Fairfax’s radio, rural and NZ interests.
However, the real story behind today’s mega-takeover is that we can now finally see the extent of the tectonic shift in the landscape of Australian journalism.
Nine Entertainment’s takeover is just part of its strategy to take out competitive voices through its attacks with the other commercial broadcasters and News Corp (with even Hywood’s Fairfax joining) against the public broadcasters, the ABC and SBS. With Fairfax in the bag, they now want the public broadcasters out of the picture.
The prize they seek is one that will leave Australia’s fourth estate in the hands of News Corp, Nine and Seven. And no, I have not forgotten about Guardian Australia, the Saturday Paper and The Conversation, which to a large extent have filled the quality journalism space abandoned by Fairfax. But they are minnows in the face of the Great Beasts.
No doubt this takeover will be flagged through by the Australian Competition and Consumer Commission (and welcomed in certain political quarters) unless we have the serious public debate this development demands. Or Fairfax shareholders wake up and rebel against this bad deal and realise their masthead assets have a better future than Nine, which faces its nemesis in Netflix and Amazon.
This story was first published in Guardian Australia and is reproduced with permission of the author.
Editor’s Note: Andrew may be right about the lowball valuation of Fairfax’s once-great mastheads but much damage has already been done to quality journalism thanks to years of cost cutting and redundancy programs. It is the view of this observer, who also worked at Fairfax during the Jaspan years, that Fairfax would be better off in the embrace of Nine than bought by some bust-up merchant like the two US private equity vulture funds who made their bids last year.
Further, much is yet to play out in this takeover. A rival bidder may bob up. Some assets, such as the newspapers, may be prised off sold to interests who might invest in them, or at least stop the bloodshed. Even then, if you look at the present patterns of media consumption, younger consumers don’t read newspapers, or watch set-piece TV shows. They consume the product of their choosing on the device or their choosing at the time of their choosing. The internet, with its abundance of niche content and global quality content is really squeezing traditional, full-service national media at both ends. The future is yet uncertain, although the great mastheads are sure to survive in some form.
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