Friday, 18 October 2013

KILLING FAIRFAX (Pamela Williams) and FAIRFAX: The Rise and Fall (Colleen Ryan)

KILLING FAIRFAX: Packer, Murdoch & the Ultimate Revenge
HarperCollins, 2013, 352 pages, $39.99 (hb)

FAIRFAX: The Rise and Fall
The Miegunyah Press, 2013, 302 pages, $32.99 (pb)

Review by Phil Shannon

When Australia’s richest person, the multi-billionaire mining magnate Gina Rinehart, moved to add the title of media mogul to her CV, the inspiration came, say Colleen Ryan and Pamela Williams in their books on the Fairfax media, from the Rinehart-financed climate change denier, Christopher Monckton, who advised his wealthy patron in 2011 to take over a newspaper to give Australia ‘a proper dose of free market thinking’.

Alarmed by the former federal Labor government’s tax on mining super-profits, Rinehart had become a barricades activist, shouting herself hoarse at anti-mining-tax rallies before eyeing off a powerful stake (19% at last count) in the Fairfax stable of newspapers, The Age, The Sydney Morning Herald and The Financial Review.

The wealthy have long invested in Australia’s establishment media as a money-making venture but Rinehart’s aim was not further immediate enrichment, which was unlikely given the shape of Fairfax’s business model (busted) and share price (tanking), but political influence.

Rinehart is not the first member of “Australia’s moneyed establishment with deep enough pockets to fund a dream to control Australia’s quality (sic) press”, says Ryan.  From the founder, John Fairfax in the 1840s, to the half-century reign of the “moneyed intellectual”, Warwick (Snr), the Fairfax press was solidly conservative, the family ruling with a heavy hand, punishing any independent-minded editor lest, as board minutes recorded, ‘we might wake up one morning and find the communist line taken in any of our papers’.

Only with the accession from 1977 of Warwick’s son, James, did the Fairfaxes realise the value of ‘quality journalism’ as a corporate brand, although this was not merely a marketing ploy - employed during this “new era” were such gifted and progressive journalists as David Marr and Wendy Bacon.

What undid the successful Fairfax business, says Ryan, was a convergence of “managerial incompetence, family rivalry, vengeful politicians and boardroom bastardry”.  Labor premiers and prime ministers were upset by the accountability they were subjected to in the Fairfax press and Prime Minister Paul Keating retaliated with changes to media laws which favoured Fairfax’s media rivals, Kerry Packer and Rupert Murdoch.

Fairfax’s slide accelerated from 1987, when the youngest Fairfax, Warwick (Jnr), believing he was being denied his inheritance, launched a “financially insane” takeover, his greed driving the business into crippling debt and receivership.

These financial tempests might have been weathered, however, were it not for the internet.  Fairfax had had a virtual monopoly of classified print advertising for jobs, homes and cars in Sydney and Melbourne and these ‘rivers of gold’ ($700 million in 1997, for example) subsidised the papers’ better, investigative, journalism.  When internet advertising start-ups with their cheaper on-line rates came looking for capital injections for their fledgling businesses, Fairfax missed the boat and James Packer and Lachlan Murdoch cashed in, taking Fairfax’s classifieds business from them and thus turning off the financial life-support.  As James Packer rightly put it – ‘Fairfax thought they had a journalism business when what they had was a classified advertising business’. 

Fairfax’s response was massive cost-cutting and sackings, beginning a corporate death spiral where the job cuts eroded journalism resources, leading to further revenue decline - a recipe for self-defeating organisational cannibalism.

Whilst both books focus on the mind-numbing minutiae of intra-corporate rivalry, with the narrative wheels spinning furiously in the bog of “conflicted deals and relationships at the top of the media world”, only in passing does the broader picture of Australia’s big media emerge, revealing that the ‘free press’ is free only to those rich enough to buy or inherit it, including the ‘quality press’.

The Fairfaxes were all millionaires as were most Fairfax board chairs and directors mentioned in the books.  The board government treat the Fairfax media in the same way as Fairfax’s major investors do – as a profit-making enterprise.  As one such investor put it - ‘This is a business.  You have to maximise return on capital.  It is not there for the workers, the public or the politicians …’

The real business, of Fairfax as of any other corporate newspaper, is ‘monetising’ their readership, to a small extent through sales (thus needing to provide a small and sternly policed space for diversity of views) but primarily through advertising.  The corporate media are capitalist businesses, selling a commodity (their market audience) to capitalist advertisers who will withhold their dough if newspapers become tribunes of democracy instead of material generators and ideological defenders of the dollar.

Rinehart is simply less sophisticated about hiding this reality.  After her success through board membership at Channel 10 in getting the irritating conservative and climate change denier, Andrew Bolt, his own Sunday morning television show, Rinehart demanded that her shares do the same at Fairfax  by giving her the power to hire and fire editors.  For good reason, the in-house joke amongst Fairfax journalists was that the Sydney Morning Herald would become the Sydney Mining Herald. 

The Fairfax media may have, as a minority hobby, strayed from the pack by “holding politicians accountable, scrutinising the bureaucracy, exposing corporate crooks and environmental bastardry”, as Ryan puts it, but this was only ever a calculated strategy of ‘corporate badging’.  Fairfax pursued only the ‘bad apples’, individual corporate crooks and political rorters, not the rotten capitalist system as a whole, a system which has buttered the Fairfax bread for 150 years but which is now starting to turn rancid for Fairfax through the far-sighted digital greed of its big business media rivals.

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