Nine takeover of Fairfax and golden parachutes

by | Jul 26, 2018 | Despatch

A few quick points about the Nine deal to snaffle Fairfax: the biggest synergies will come from axing one layer of executive management and three-quarters of a board of directors.

TV and print don’t really go together although there will be some cross subsidies such as Domain ads running on Nine. What Hugh Marks and co at Nine are really chasing here is the 60 per cent controlling stake in Domain, not the journalism of the SMH, AFR and Age.

Biggest individual winners will be the top three at Fairfax. Chief executive Greg Hywood has 3.14 million rights which, according to the scheme documents, will vest. That means a golden parachute of roughly $4 million (rights x share price plus one year’s pay). This assumes there are no secret pay deals, takeover bonuses or such.

Fairfax: the bid and the bosses’ secret pay

Fairfax counsel Gail Hambly will do better than Hywood in a relative sense. Although she is paid less, she is on an older, better employment agreement.

What does it mean for journalism? More of the same: more job cuts. The union MEAA is not happy. There are no EBAs at Nine so workers are not as well protected as at Fairfax.

More broadly, and further to public interest, there are many good journalists still at Fairfax. The takeover will lead to less media diversity nationally. It means one less, large competitor in an already concentrated market, a market dominated by the Murdoch press with around 60 per cent newspaper share.

Countervailing this threat to competition is the internet where independent opinion and news flourishes, albeit in a business environment where distribution may be free but costs – taking into account Australia’s draconian defamation laws – are often prohibitive for independent operators.

Finally, on the issue of quality independent journalism, this reporter has often been critical of the mainstream media, its sheeplike tendencies and readiness to re-write business and political spin.

It must be said though that there are many fine journalists in the mainstream media. Although too may have been sacked and paid redundancies to leave, and although the damage is done, irreversibly, the problem is with management, not journalists.

It is management which leads and it is management which has failed. Much of this failure is understandable; it is due to the inexorable slide in traditional ad revenues and relentless cost-cutting. TV, newspaper and digital advertising remains under pressure while non-MSM publishers like this website are biting away at market share.

The Nine/Fairfax deal is unlikely to help journalism. It can best be summed up as another nail in the coffin as the new group is likely to be hard-headed about things which don’t pay their way. Fairfax journalists therefore are not feeling chipper about the deal today because they anticipate the takeover will lead to further cuts.

With All Due Respect – newspapers

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Michael West

Michael West

Michael West established to focus on journalism of high public interest, particularly the rising power of corporations over democracy. Formerly a journalist and editor at Fairfax newspapers and a columnist at News Corp, West was appointed Adjunct Associate Professor at the University of Sydney’s School of Social and Political Sciences. You can follow Michael on Twitter @MichaelWestBiz.


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