Journalists at Fairfax Media’s Sydney Morning Herald and Melbourne Age went on an immediate week long strike to protest at yesterday’s confirmation that 125 jobs are going across the company’s newsrooms.
The action, which saw most journalists walk out in Sydney and Melbourne, came a few hours after the announcement of the cuts which are aimed at saving $30 million. The savings were signalled a month ago with the actual number of jobs to be lost to be confirmed.
The cuts follow the loss of at least 200 jobs across News Corp papers (and more than 40 last year), which are due to start in coming weeks. On top of this there are the forthcoming cuts of an unknown number of newsroom jobs at the struggling Ten Network. Fairfax axed 120 editorial jobs from its newsrooms in Sydney and Melbourne a year ago in an earlier cost-cutting exercise.
Fairfax’s strike brings into question the ability of the company to publish its newspapers in the coming days, especially next Wednesday’s post budget editions.
Staff have been given a deadline of next Tuesday, May 9 (budget day) to nominate for a voluntary redundancy.
“We will shortly open a voluntary redundancy program to achieve a reduction in staff of up to 125 FTEs, which includes the approximate 10 FTEs that have left the newsroom since this process began last month. While we will be looking across all parts of the newsroom, at the end of the redundancy program we expect there will be significantly fewer editorial management, video, presentation and section writer roles,” the email said.
Fairfax Media is also set create a news director position while it replaces the AM and PM editors with news editors. The digital editor “is being refocused” while new roles for national head of video, a national creative director and a new head of travel and food are being created.
“We propose to call for expressions of interest in the altered roles from tomorrow. Subject to applicants being available, we would like interested staff to nominate themselves by Tuesday next week (9 May 2017). If needed, an interview process will take place next week with all appointments made by close of business, 12 May 2017,” the email from Aylmer said.
Fairfax Media is set to cap its rate for all contributors to The Sydney Morning Herald, The Age and The Australian Financial Review, while all third-party deals will be reviewed.
The email also revealed Fairfax will be “significantly” reducing the use of the casual workforce across The SMH, The Age and The AFR which will provide an estimated saving of around $3m a year.
Investors are waiting to see how Fairfax handles its commitment to give some value to its Domain real estate operation. Fairfax wants to see between 30% and 40% of Domain floated as a separate company, with Fairfax retaining the remainder (in a similar arrangement to the relationship between News Corp and REA Group).
Fairfax shares eased 0.9% to $1.07. Investors remain more interest in Domain’s future than that of the newspapers.
Fairfax’s New Zealand’s newspapers are heading for big cuts in the wake of the county’s competition regulator blocking media companies Fairfax New Zealand and NZME from merging.
In fact the decision is likely to see mass sackings, paper closures or cuts to publication frequencies at both companies.
The Commission acknowledged that NZME and Fairfax “face a challenging commercial environment as they seek to transition from their traditional print products to a sustainable online model” but disagreed with some of the scenarios the media companies suggested about their respective futures without the merger.
"This merger would concentrate media ownership and influence to an unprecedented extent for a well-established modern liberal democracy. The news audience reach that the applicants have provide the merged entity with the scope to control a large share of the news consumed by a majority of New Zealanders, the Commmssion said in its statement.
“This level of influence over the news and political agenda by a single media organisation creates a risk of causing harm to New Zealand’s democracy and to the New Zealand public,” chairman Mark Berry said.
The merger would have seen the creation of a news company controlling almost 90% of the daily newspapers in New Zealand, the two most popular news websites (Stuff and nzherald.co.nz), and half the commercial radio sector.
The Commission’s decision to reject the merger leaves NZME and Fairfax in a precarious situation. Their business models are in difficulty (like in Australia, the US and the UK) and there has been an overall decline in print sales revenues, as well as a significant loss of online advertising revenues, to social media and search engines (ie Facebook and Google).
The Commission’s decision can be appealed to the NZ high Court. It is the second controversial media deal the Commerce Commission has rejected in the past few months. Earlier it blocked Sky TV, NZ’s pay TV monopoly from buying Vodafone NZ.
Those companies continue to explore either an appeal or a deal with some of its Pay TV and phone rivals on content and then pushing ahead with the merger. That could become an option for Fairfax and NZME, a move that would force the Commerce Commission to go to court to block the deal.
In a statement to Fairfax Media staff in Australia yesterday the company’s CEO, Greg Hywood expressed disappointment with the decision and said the Commission’s decision would be closely studied.
He repeated an earlier threat that should the merger be rejected, then Fairfax New Zealand would immediately go into “consolidation mode” which NZ observers took to mean job cuts paper closures and or reduced publishing frequencies (which has already happened to a company paper in the Marlborough region).
"In light of the decision, an even greater focus on cost efficiency will be necessary. Moving to the next stage of our New Zealand publishing model will involve reshaping how we deliver our journalism to local communities. Further publishing frequency changes and consolidation of titles is an inevitability.”
Justifying the decision, Commission chair mark Berry said that competition between Fairfax and NZME led them to produce “higher quality” news than would they would if they merged, he said.
"The Fairfax/NZME rivalry benefits the public," he said.The commission believed the companies would continue to compete as separate entities, he said.
It had paid particular attention to the online news market, he said, though there were also issues with regard to Sunday and community newspapers.
The loss of "media plurality", had the merger been allowed, was a "fundamental concern", Berry said. That loss would have been "unprecedented for an established liberal democracy" because Fairfax and NZME between them put out three times as many news stories as their major competitors combined, Berry said. Hywood told Australian staff the decision saying “the regulator’s failure to grasp the commercial and competitive realities of modern media is disappointing. This decision does nothing to address the challenge of the global search and social giants, which produce no local journalism, employ very few New Zealanders, and pay minimal, if any, local taxes”.
Had the merger been allowed, Fairfax NZ would have been folded into NZME, which is listed on the NZX, and Fairfax Australia would have become the largest shareholder in the combined business, with a 41% stake, plus two board sports and $A53 million in cash.
Fairfax owns news website Stuff and newspapers including The Dominion Post, the Sunday-Star Times and The Press. It also owns majority stakes in community site Neighbourly and Stuff Fibre. NZME owns the NZ Herald, about half the country’s major commercial radio stations, daily deals site GrabOne and video entertainment site WatchMe. It remains listed on the NZX. APN is 14.9% controlled by the Murdoch clan’s News Corp.
