Australia’s Fairfax to revamp newspapers, cut costs
MELBOURNE, June 18 — Australia's Fairfax Media , publisher of some of the country's leading newspapers, said today it will restructure its top mastheads, resulting in 1,900 job cuts over three years, the beginning of a widespread shake-up of Australia's media sector.
That shakeup will see thousands of newspaper redundancies and a consolidation of pay-TV ownership as the industry's old guard struggles with changing readership habits.
Fairfax – which publishes The Sydney Morning Herald, the Australian Financial Review and Melbourne's The Age – said it will close two printing facilities, reduce broadsheet newspapers to “compact” formats and sell down its stake in its New Zealand auction web site Trade Me.
Fairfax is considered vulnerable to a break-up or takeover, after its shares this month hit a record low below A$0.60 (RM1.80) for a market capitalisation of A$1.4 billion, down from A$7 billion five years ago.
Mining magnate Gina Rinehart, the Asia-Pacific region's richest woman with a fortune estimated by Forbes at $18 billion, wants to increase her control over the publisher, but she is not looking to buy out the group, media reports have said.
Fairfax's classified advertisements were once considered “rivers of gold”, but revenues have collapsed as online web sites have taken over markets for real estate, job and car ads.
The changes unveiled today will integrate the newsrooms of the Sydney Morning Herald and The Age, and a new digital-first editorial model will be implemented from July.
A subscription-based system will start in 2013 and the more compact print versions will be produced within Fairfax's network after the closure of the Chullora and Tullamarine printing plants. The Age newspaper has been published in Melbourne since 1854.
“No one should be in any doubt that we are operating in very challenging times. Readers' behaviours have changed and will not change back,” said Fairfax Chief Executive Greg Hywood.
The changes, including the cut of almost one-fifth of its staff, will result in one-off costs of A$248 million (RM750 million) and lead to savings of A$235 million on an annualised basis by June 2015.
The sell-down reduced Fairfax's stake in Trade Me to 51 per cent from 66 per cent and resulted in proceeds of A$160 million. Fairfax said it plans to keep its majority stake.
Shares in Fairfax gained more than 7 per cent to A$0.65 against the broad market benchmark's rise of 1.7 per cent.
More cuts looming
News Ltd, Rupert Murdoch-controlled News Corp's Australian unit and Fairfax's larger rival, is preparing to announce job cuts of up 1,500 staff as it restructures its work force, according to a report today on the Conversation, an independent web site run by former Age editor Andrew Jaspan.
Last month News Ltd cut 400 editorial jobs as part of a cost-cutting program, and is expected to announce further significant cuts to its staff of 8,000, according to media reports.
News Ltd controls around 70 per cent of Australian newspapers, one of the most concentrated levels of media ownership in the world, compared with Fairfax's 30 per cent market share.
Billionaire James Packer wants to sell his media company and its 25 per cent stake in pay TV operator Foxtel to focus on his gaming interests, possibly including a takeover tilt at casino group Echo Entertainment
Packer, who sold out of the Nine television network to private equity firm CVC at the height of the market boom in 2006 and 2007, has had early talks with an unnamed party on a possible takeover of his media company, Consolidated Media Holdings. — Reuters