Fairfax sacks its editors

The latest salvo in the Fairfax saga was the sacking of three senior members of the editorial team today. In Melbourne, Age editor Paul Ramadge .html “announced his intention to stand down” while at the Sydney Morning Herald publisher and editor-in-chief Peter Fray and editor Amanda Wilson announced “they are leaving the company”. The decisions coming so close together and so close after CEO Greg Hyland’s watershed restructure announced last week can only mean the trio have been sacked. Fray gives it away when he said he said it was an exciting opportunity for him to see what more he could achieve in the profession he loved but “he didn’t have another job to go to” while Ramadge spoke of “divided feelings”.

Their departure clears the way for Fairfax to move to a new management structure. In Hyland’s memo to all staff last Monday entitled “Fairfax of the Future”, he announced the three objectives of his cull of 1900 staff: Move to a digital-only platform, reduce costs and make profits. Hyland said his “Metro Media Business” (the Age and SMH) has grown 30% audience in the last five years. Online visitors now outnumber print by over three to one. But the business costs are predominately in the legacy space. To fix this, they will move to regional printing plants, charge for digital access from next month, reduce the size of their papers and sell a stake in NZ auction site Trade Me.

Hyland said they were committed to a multi-platform strategy. Fairfax Media will become a “digital news media and transactions” company with horizontal media convergence across four platforms: legacy (print/radio), online, mobiles and tablets, and IPTV. Audiences would be “monetised through the day” through a mixture of subscriptions, advertising, digital transactions and events. There is no clear role for an editor-in-chief in this model, hence the departures of Ramadge, Frey and Wilson. The Australian thinks instead there will be five geographical editors-in-chief in Sydney, Melbourne, Brisbane, Perth and Canberra -- and a handful of "national news editors". The Australian believes there will be 19 "topic" editors, replacing the rounds system. “Some topics will be national, such as federal politics, some local, such as crime, and some hybrid,” they said. “There will also be five ‘platform’ editors: one each for print, social media, tablet, mobile and computer.”

Meade and Jackson also note the massive restructure in their own organisation News Ltd with job losses also expected to exceed 1000. Its 19 divisions will be reduced to five publishing houses in a “one city one newsroom” strategy similar to Fairfax. News is also closing two divisions: News Digital Media, founded in 2006, and News Corp's internal wire service Newscore formed three years ago.

While Australia’s two biggest media companies haemorrhage staff, The Guardian is worried more about losing a plurality of voices. It notes Gina Rinehart is circling Fairfax looking for a board seat and editorial influence. Maybe Rinehart is just smart and figures now is a good time to buy into their stock or maybe she wants more than that. Either way, based on what Hyland is saying, the Guardian’s comment she would “hamper Australia's once-vibrant journalistic culture” is a bit Pollyanna-ish about the our media. Right-winger Gerard Henderson calls the Age the Guardian-on-the-Yarra but the Australian paper is nowhere near as good as its British counterpart.

Whether it will be a choice “between Murdoch and Murdoch on steroid,” as the Guardian claims, the fact is Fairfax were never independent of their owners regardless of their “Charter of Editorial Independence”. Even in the glory days of Graham Perkin, he was rapped over the knuckles for supporting Gough Whitlam in 1972 and had to backtrack in 1974 when the board vetoed his decision to give Labor another chance. Rineharts’s refusal to sign it will have little bearing on the content the new entity provides.

The real danger is elsewhere. This threat is not about political interference but business. The new arrangements will further hasten the collapse of the walls between editorial and commercial departments. Terry Flew notes the big question for Fairfax is what online content to put out. Flew said their websites are “a confusing blancmange of investigative stories, fashion photos, sex tips, celebrity gossip, local news, opinion pieces, sports results, and updates on reality TV shows". These sites challenge Fairfax’s claim to deliver quality journalism and most of it is readily available elsewhere. Flew said Fairfax priorities for its online sites must be“uncluttering its content pages and deciding what it won’t be reporting on, and identifying more clearly who its paying readership are likely to be and what they are uniquely seeking from Fairfax sites.”

Blood letting at Fairfax begins: Age editor sacked

Andrew Jaspan, the editor of The Age, appears to be the first victim of the 550 job cuts announced by Fairfax yesterday. The company’s Victorian chief Don Churchill announced Jaspan’s departure to shocked staff of the Melbourne broadsheet this morning. In the staff memo, Churchill said Jaspan had “delivered great papers and has done a magnificent job in reinvigorating The Age”. However he said Fairfax had decided that for “this next critical stage of The Age we would have fresh editorial and executive leadership.” Jaspan’s departure follows that of The Age’s marketing manager Antony Catalano who Churchill also sacked yesterday.

While Jaspan didn’t endear himself to Age journalists over his decisions to allow commercial partnerships to compromise editorial independence, his departure is a concern as it does not appear to be made for journalistic or editorial reasons. Newspaper quality is certain to suffer as journalists follow Jaspan out the door. Fairfax CEO David Kirk hopes to save $50 million with the cuts and the redundancies amount to five percent of the company’s total staff. Crikey editor Jonathan Green believes the two departures confirm the impression that the future business plan for the newspaper is about controlling costs rather than going for growth.

The redundancies news was delivered by the company’s senior brass, CEO David Kirk and deputy CEO Brian McCarthy. Kirk and McCarthy painted the move as a “major restructure of corporate and group services” designed to improve productivity and performance. The job losses were spread across many areas of the business with three in ten redundancies affecting editorial staff in Australia and New Zealand. Fairfax will outsource production of the sections and special reports that are inserted into its papers. The two Sydney newspapers, the Morning Herald and The Sun-Herald, will be merged under a seven-day roster while Melbourne would suffer a “deferral of wage reviews for senior management, a review of our marketing spend, reduction of discretionary spending and a review of our distribution framework.”

Caroline Overington at Murdoch’s The Australian quotes Sydney reporters who say Fairfax is abandoning quality journalism at its flagship newspapers. She said Sydney staff passed a motion after they heard the news saying they had "lost confidence in the Fairfax board and its ability to manage the company through these challenging financial times when its only strategy is to cut editorial staff again and again". Sydney Morning Herald journalist Gerard Noonan called management "gutless" and said they were using "the worst of the Work Choices legislation" to make deep cuts to journalism. "This is a panicked response," he said. "Management is clearly struggling to deal with how to handle the complex demands of high-end, quality journalism."

Another Murdoch media analyst, Mark Day, says the announcement has deputy CEO Brian McCarthy’s fingerprints “all over it”. McCarthy was the former head of John B. Fairfax’s Rural Press, which merged with Fairfax Media 15 months ago in a $9 billion deal. McCarthy’s model at Rural Press was based on small editorial and sales teams using centralised printing facilities to produce more than 100 mastheads. He was notorious for cost-cutting and hated by journalists who claimed reporting capacity was sacrificed for profits. But Day says the model won’t work for the city broadsheets. “The Sydney Morning Herald and The Age need to be agenda-setting and relevant to consumer interests to have an influential role in modern societies,” he said. “This cannot be achieved by filling the gap between the ads with the kind of cheap-as-chips copy-sharing and PR-supplied bumf that McCarthy’s regional weeklies have been able to get away with."

Chris Warren from the Journalists’ union MEAA (Media Entertainment & Arts Alliance) believes the sackings show the newspaper industry is in crisis. He was unimpressed by Kirk and McCarthy’s mantra that "media companies fit for the modern media world need to be lean and agile". Warren told the ABC PM program yesterday he had “absolutely no idea” what the company actually meant by that statement. “You can't produce this sort of quality product that are so essential in this day and age by cutting costs,” he said. Professor of Journalism Wendy Bacon agrees with Warren and she told the same program that quality impact was inevitable. “Now, I know of no research that's accurately measured this, but certainly anecdotally, already errors have been cropping up where you wouldn't have previously seen them,” she said.

These errors are sure to increase given that 120 journalists are among the jobs slashed. More worrying is the likelihood that the cuts will see further erosion in the commitment to quality journalism. While quality is a difficult characteristic to determine, journalism academics such as David Conley have used the measure of at least one journalist per one thousand circulation. The Fairfax broadsheets fall well short on this measure. And with salaries and expenses frozen and no new cadets to be taken on this year, it is unlikely we will be seeing too many investigative scoops or damning exposes of dubious doings of those in high office. A further “dumbing down” of news is the most likely outcome.

Only the markets were happy with Fairfax’s slash and burn exercise. The share price closed last night at $2.98 up 14c and a rise of five percent for the day. ABN Amro media analyst Fraser McLeish saw the cuts as positive because “they’re aligning the costs with the revenues, which is what you want to see.” While McLeish sympathised with those working for Fairfax, he said it was in line what was happening to the newspaper business elsewhere. “You just have to look overseas to what's happening there,” he said. “Five per cent of the workforce is a lot less than what some of the big US newspapers are announcing."

SMH 175

The Sydney Morning Herald broadsheet is 175 years old in 2006. It is Australia’s oldest surviving continuous published newspaper and has published over 51,000 editions.

The SMH preaches to the Sydney “AB demographic” (the highest demographic in terms of education, income and occupation.) Politically it is a soft right voice and has supported the Liberal Party (or its historical equivalents) on nearly all of the 100 or so elections during its 175 year history. It has never supported Labor at state level and federally supported Labor just twice. It supported John Curtin during the war election. Then in 1961 the Herald recommended voting for the ALP's Arthur Calwell over longterm Liberal PM, Robert Menzies (Labor lost) while in the most recent Federal election in 2004 it remained neutral (and again Labor lost.)

The Sydney Morning Herald began its life as a weekly newspaper in 1831, the Sydney Herald. It only had four pages and a circulation of 750 copies. The paper was founded by three English gentlemen, Alfred Stephens, Frederick Stokes and William McGarvie. The paper was named for the Glasgow Herald. The lead story in the first edition was "the undermentioned prisoners of the Crown have obtained Tickets of Leave about or on this day of publication".

They were often in hot water for libellous activities. An early court case occurred in 1834 when Stephens and Stokes were hauled in front of the NSW Supreme Court for criminal libel reflecting on the character of W. B. Halden, reporter to the rival Sydney Gazette.

After ten years, the newspaper was bought out by Charles Kemp and John Fairfax from Frederick Stokes for £10,000. Their first activity was to turn it into a daily newspaper, which they did in 1840. Two years later, they changed the title to The Sydney Morning Herald. Its editorial policies were based "upon principles of candour, honesty and honour. We have no wish to mislead; no interest to gratify by unsparing abuse or indiscriminate approbation."

John Fairfax’s tactic was to cover the front page with classified advertising. That, in the words of ABC’s Gerald Tooth, was a “revenue stream (that) eventually grew to be the rivers of gold that have, until now, kept the famous masthead afloat.” John Fairfax was born in Warwick, England. He worked as printer, bookseller and stationer before emigrating to Sydney aged 34. Fairfax was a member of the Congregational church but his paper was kept free from religious bias and sectarianism. Business was his real religion. When a young member of his staff told John Fairfax that he was studying the bible, Fairfax replied "That's right, my boy, that's right! To learn what great things God has done for mankind in the past, read your Bible. And to learn what He permits to be done today, read the Herald."

In 1853 SMH became the first Australian newspaper to be printed with steam. In 1872 the news agency Reuters was starting to flex its global muscle and they entered into a contract to provide international news for the SMH. The evening edition was established in 1899. All that tradition counted for nought in 1990 when Fairfax went into receivership, ending the relationship with the family. John Fairfax's great-great grandson Warwick had squandered his inheritance in the greedy eighties and put the company into receivership. The major stake went to Canadian Conrad Black and he sold on to the New Zealand based Brierley Investments in 1996. Fairfax Holdings bought back their stake in 1998. They still own the SMH and the Melbourne Age as well as the Australian Financial Review, the Sydney Sunday Sun-Herald and a number of provincial and NZ newspapers. The SMH publishes 210,000 copies daily (March 2006) Monday to Friday and the circulation increases to 365,000 for its Saturday edition.

SMH’s impressive advertising revenues are now under threat from new digital challengers but current SMH editor Alan Oakley talks up the future of the paper in his interview with the ABC on April 20: “Initially I think print saw online as a threat; I think that's no longer the case. What we talk about now in Fairfax is an integrated approach to news, an integrated approach to how we gather that news, and an integrated approach to how we disseminate it whether that be through online or in print or through mobile technology, through podcasting.”

The Sydney Morning Herald will probably survive to see its 200th birthday but whether it will be in broadsheet form or via some sort of digital medium will be the challenge for Fairfax and Oakley.