Fairfax Media

Fairfax Media Limited
Public company (ASX – FXJ)
Industry Media
Founded 1841
Headquarters One Darling Island Road, Pyrmont, Sydney
Area served
 Australia, New Zealand
Key people
 Greg Hywood (CEO)
Roger Corbett (Chairman)
Products Newspapers
Radio
Magazines
Internet
Revenue Decrease A$1.99 billion
(24 June 2014)[1]
Increase A$224.4 million
(24 June 2014)[1]
Number of employees
 Decrease 6, 410 full-time employees
Decrease1,211 part-time and casual employees
(24 June 2012)[1]
Website www.fxj.com.au

Fairfax Media Limited is one of Australia's largest diversified media companies. The group's operations include newspapers, magazines, radio and digital media operating in Australia and New Zealand. Fairfax Media was founded by the Fairfax family as John Fairfax and Sons, later to become John Fairfax Holdings. The Fairfax family lost control of the company in December 1990. It was renamed from John Fairfax Holdings to Fairfax Media in 2007.

The group's chairman is Roger Corbett and the chief executive officer is Greg Hywood.[2] As of May 2008 Fairfax Media had a market capitalisation of over A$5 billion.[3] The number of printed edition readers has fallen since at least 2006 and the group's stock price has declined by more than 60 percent since 2007, to less than A$2 billion by September 2011, and by 85 percent at June 2012.[4]

Gina Rinehart, the wealthiest person in Australia, became the group's largest shareholder in mid-2012, with a 14 per cent stake in the company, a purchase described as a "vanity investment" designed to increase her influence.[5] It was reported that Rinehart had appointed Bell Potter Brokerage to increase her total share to 19.99 percent, the maximum allowed before a takeover offer must be made.[6] However due to provisions in the Fairfax Media insurance policy denying cover for directors holding an ownership interest of greater than 15%, Ms Rinehart was forced to sell down to 14.99%.[7] In 2015, Rinehart sold her stake, after the Fairfax Chairman and Board refused her a place on the Board because she would not agree to the company's charter of independence.[8][5]

On 18 June 2012, Fairfax Media announced it would cut 1,900 staff and begin to erect paywalls around the websites of its two main metropolitan newspapers, The Sydney Morning Herald and The Age.[9] It also announced it was shifting to "compact" or tabloid-sized editions of the broadsheet newspapers from March 2013, and that its two printing facilities at Chullora and Tullamarine would close.[10] The changes, prompted by shrinking advertising revenue, were expected to generate A$235 million in annual savings over three years.

History

Fairfax Media building at Pyrmont, NSW

John Fairfax purchased The Sydney Morning Herald in 1841.[11] Several generations of the Fairfax family continued to control the company.

1950s to 1999

The Australian Financial Review was founded in 1951. In that decade, Fairfax started two television stations, ATN and QTQ. Fairfax began expanding in the 1960s, acquiring, among others, The Age, The Newcastle Herald and the Illawarra Mercury. In 1979, Rupert Murdoch attempted to take over rival The Herald and Weekly Times. Due to the costs of defending the takeover, Fairfax sold its television properties, including the Seven Network. In 1988, Fairfax sold its magazines (including Woman's Day, People, Dolly, and Good Housekeeping) to Australian Consolidated Press, and discontinued its Sydney afternoon tabloid The Sun, transferring some of its content and the sponsorship of the City to Surf to its new Sunday tabloid The Sun-Herald which also replaced the broadsheet Sunday Herald.

In 1987, Warwick Fairfax, then aged 26, controversially bought out his family's holdings in the company by borrowing heavily. He successfully took it over; but, on 10 December 1990, the company collapsed and a receiver was appointed,[12] with company debts of A$1.7 billion.[11] By 1993, the company was re-listed on the Australian Stock Exchange and the two biggest shareholders of John Fairfax Holdings were the Canadian newspaper magnate Conrad Black and his Hollinger Group with 25%, and the Australian media mogul, Kerry Packer and his publicly listed company, Publishing and Broadcasting Limited with 15%. Due to Australian government concerns over media consolidation that limited any single foreign shareholder holding more than 25% interest in national and metropolitan newspapers,[13] after intense lobbying for the right to increase his stake, Black conceded defeat in 1996,[14][15][16] selling his holding to the New Zealand corporate "raider" Brierley Investments, that was ultimately subject to the same restrictions.[12]

2000 to present

In April 2003, Fairfax acquired the publishing assets of New Zealand's Independent Newspapers Limited (News Corp Australia), including many of New Zealand's highest-profile newspapers. In July 2005, Fairfax acquired the RSVP dating site for A$38 million.[17] In August 2005, Fairfax's general classifieds site created in March 2004, Cracker.com.au consistently exceeded 500,000 unique visitors a month. In December 2005, Fairfax acquired Stayz Pty Ltd[18] for A$12.7 million.[19] This investment proved to be very successful as Stayz was sold on 27 November 2013, for $220 million, far exceeding its estimated net debt of $154 million.[19]

In August 2005, Fairfax ended its 16-month search for a new chief executive officer with David Kirk, a former Rugby Union World Cup winning captain of the New Zealand All Blacks being appointed to replace departing CEO Fred Hilmer. David Kirk got the job ahead of Fairfax COO Brian Evans (former head of Fairfax New Zealand) and Doug Flynn, who took the top job at UK Pest control company Rentokil after negotiations with Fairfax broke off. In March 2006, Fairfax acquired New Zealand auction website Trademe.co.nz for NZ$700 million. On 4 March 2006, it was announced that Fairfax would purchase The Border Mail newspaper in Albury-Wodonga for A$162 million. In October 2006, speculation began to grow that the company would be bought out and split up after the passage of changes to Australian media laws. Rival media company News Corp Australia purchased a 7.5 per cent stake in the company at this time, with the stated aim of keeping Fairfax in one piece.

On 7 December 2006, John Fairfax Holdings and Rural Press announced the beginning of their merger proceedings. Once merged, the new entity formed a publishing company worth A$9 billion and resulted in regaining control of The Canberra Times (which it owned in the 1980s), and through John B. Fairfax of Rural Press, saw the return of the Fairfax family to the company board. The company also gained a number of other regional newspapers, radio stations and websites; plus agricultural publications in various countries. On 12 January 2007, John Fairfax Holdings changed its name to Fairfax Media.[20]

On 7 March 2007, Fairfax Media announced a new website for Brisbane, called the Brisbane Times. The website initially employed 14 journalists and was an attempt by Fairfax to break into the South East Queensland market. On 20 March 2007 Fairfax Media launched a new business website, BusinessDay.com.au that aggregated feeds from the other news vehicles in the Fairfax stable as well as "from the world's most respected news sources". It featured breaking news updated "every 15 minutes". Also in 2007 Fairfax Media bought the radio assets of Southern Cross Broadcasting. Macquarie Media Group purchased Southern Cross for A$1.35 billion and onsold these assets to the Fairfax Group.[21]

On 26 August 2007, Kirk and Deputy CEO Brian McCarthy announced that 550 staff would be cut as part of a "business improvement" programme. The staff reductions would take place in both Australia and New Zealand, with the latter country bearing the brunt of the cuts, with 160 full-time employees losing their jobs.[22] On 5 December, David Kirk tendered his resignation, and on 10 December Brian McCarthy (former Rural Press CEO) was appointed as CEO. A new campaign, "Fair Go, Fairfax: Don't discount journalism",[23] was launched by the MEAA in protest to the cuts arguing that the jobs losses will affect "quality journalism".

In late 2011, John B. Fairfax and his family investment company, Marinya Media, sold their remaining 9.7 percent stake in Fairfax Media for A$189 million. The sale came after an earlier dispute between John B. Fairfax and Chairman of the Fairfax Media board, Ron Walker, that led to the very public departure of Walker. Continued poor performance of Fairfax Media in light of changing news services was cited as one of the reasons for the sale of Marinya Media's interests in Fairfax. John B. Fairfax has earlier stood down from the Fairfax board and his son, Nick Fairfax, was reported to be discussing his future with the rest of the company board.[24][25][26][27] In 2012 mining billionaire, Gina Rinehart became Fairfax's biggest shareholder, purchasing a 14 percent stake in the company. Rinehart also sought a position on the Fairfax board.[28] By June 2012, Rinehart had increased her stake in Fairfax Media to 18.67 percent, and was believed to seek three board seats and involvement in editorial decisions.[29]

In 2014, Fairfax Media founded online streaming company Stan with Nine Entertainment Co., investing AU$50 million into the joint venture.

Properties

Australia

Newspapers

Fairfax publishes the second most circulated daily papers in both Melbourne and Sydney, The Age and The Sydney Morning Herald respectively. It also publishes a daily business tabloid, The Australian Financial Review.

Fairfax also owns papers in major regional centres, including the Illawarra Mercury (Wollongong), The Newcastle Herald (Newcastle), The Border Mail (Albury-Wodonga), The Daily Advertiser (Wagga Wagga), The Warrnambool Standard (Warrnambool), The Courier (Ballarat) and The Bendigo Advertiser (Bendigo). In addition, its subsidiary Fairfax Community Newspapers publishes 35 community newspapers serving suburban Victoria and New South Wales.

As a result of its Rural Press acquisition, Fairfax has taken control of many newspapers including The Canberra Times and The Land.

Magazines

Fairfax publishes a number of magazines, such as the(sydney)magazine, The Age magazine(melbourne) and Good Weekend, which are distributed with their newspapers. In addition, the company publishes business-centred magazines including BRW (since December 2013, only published online),[30] AFR Smart Investor, AFR Magazine, AFR Boss, CFO Australia, MIS (magazine) and Asset (Magazine).

Digital

Fairfax owns a profitable Australian online subsidiary, Fairfax Digital, which was once known as the F2 Network. Fairfax publishes web editions of most of its newspaper titles, as well as digital only news sites in South-East Queensland as the Brisbane Times; and in Western Australia as WA Today. Both The Age and The Sydney Morning Herald produce a limited amount of video content, which is only available online. As a rival to Ninemsn's Nine News and Yahoo7's Seven News, Fairfax websites previously had non-exclusive licensing deals to replay news video content from broadcaster Network Ten and its former main news service Ten News at Five (now Ten Eyewitness News). Fairfax's deal with Ten has now discontinued when their news video content are now being shown on Ten's catch-up service, TenPlay which launched in late 2013.

Rural Press owns a range of similar classifieds and local newspaper websites.

On 21 December 2012, Fairfax Media announced the acquisition of Netus Pty Ltd, a technology investment company. Netus owned 85% of Allure Media. Fairfax purchased the remaining 15 per cent of Allure Media from minority shareholders resulting in Fairfax ownership of 100 per cent of Allure Media.[31] Allure Media own a range of websites, including the Australian licenses for Lifehacker, Gizmodo and Kotaku.

Radio

On 11 July 2007, Fairfax Media acquired the former radio assets of Southern Cross Broadcasting (on-sold from Macquarie Media Group's purchase of SCB): 2UE Sydney, 3AW and Magic 1278 Melbourne, 4BC and 4BH Brisbane, and 6PR and 96fm Perth. Graham Mott will continue in his role as general manager of the broadcast radio group under Fairfax. Mott indicated at the time of the acquisition that national syndication of programming (such as that of the since-retired John Laws) would largely be replaced on the network with more localised syndication at a state level.[32]

Fairfax also acquired Satellite Music Australia (SMA) as part of the SCB deal, who provide music channels to retailers, as well as Foxtel and Austar[33] (where it is branded AIR). MyTalk Datacasting Channel was officially purchased from Southern Cross Broadcasting on 5 November 2007,[34] and ceased broadcasting on 25 February 2008.

In December 2014, Fairfax announced that it had agreed to a merger with Macquarie Radio Network. Under the deal, Fairfax will gain a 55% share in the Macquarie Radio Network, with Macquarie's existing shareholders holding the remaining 45%. To comply with legislation only allowing two radio licences to be held by one party in each market, some stations including 2CH and the Macquarie Regional Radio network will be sold.[35] In turn, 96FM Perth was sold to Australian Radio Network.[36][37] The merger was completed in March 2015.[38][39]

Syndication

Fairfax Syndication[40] manages the commercial licensing and distribution of text, photographic and multimedia content to media companies and commercial clients worldwide. Fairfax Syndication has enabled instant online licensing and has developed a customised syndication application 'API' that allows existing and future syndication clients access to real-time content from multiple websites for immediate use on other platforms. The division also represents their image library and photo syndication service containing over 16 million images.

New Zealand

The New Zealand subsidiary is Fairfax New Zealand Limited. Allen Williams became its CEO in March 2009.

On 1 September 2011 Fairfax New Zealand announced the launch of Fairfax New Zealand News (FNZ), partly in response to the New Zealand Press Association (NZPA) closure, but also as part of its drive to improve its journalism.

Fairfax New Zealand publishes a stable of papers formerly owned by Independent Newspapers Limited (News Corp Australia), including The Dominion Post in Wellington, The Press in Christchurch, The Sunday Star-Times and Suburban Newspapers in Auckland. It also owns over 60 community newspapers.

Fairfax New Zealand's websites form the Stuff.co.nz portal. Sites include News, Employment, Property, Personals and Shopping. Fairfax also owns the Cuisine website as part of its ownership of the magazine of the same name.[41]

Magazines

  • Cuisine
  • NZ House & Garden
  • NZ Gardener
  • NZ Life & Leisure
  • TV Guide
  • NZ Autocar
  • NZ Fishing News
  • World
  • The Cut
  • NZ Lifestyle Block
  • NZ Horse & Pony
  • NZ Trucking
  • Fish & Game

Rural Press Limited:

  • The Dairyman
  • Horticulture News
  • The Lifestyle Farmer
  • New Zealand Grapegrower[42]
  • Straight Furrow
  • AgTrader
  • Central Districts Field Days

References

  1. ↑ 1.0 1.1 1.2 "Annual Report" (PDF). 2014.
  2. ↑ Lee, Julian. "Fairfax chief executive quits". Brisbane Times (Australia). Retrieved 6 December 2010.
  3. ↑ "Fairfax Media Ltd. (FXJ): Stock Quote & Company Profile". Bloomberg BusinessWeek. Retrieved 27 May 2008.
  4. ↑ "Fairfax to Cut 22% of Staff Amid Slumping Revenue". Bloomberg L.P. 18 June 2012. Retrieved 18 June 2012.
  5. ↑ 5.0 5.1 Ferguson, Adele (8 February 2015). "Rinehart's exit from Fairfax merely a matter of waning interest". The Sydney Morning Herald. Retrieved 9 February 2015.
  6. ↑ Simpson, Kirsty (15 June 2012). "Gina Rinehart lifts stake in Fairfax to 15% as pressure for board seats builds". The Sydney Morning Herald. Retrieved 15 June 2012.
  7. ↑ "Gina Rinehart reduces her stake in Fairfax Media". BBC News. 6 July 2012.
  8. ↑ Thompson, Sarah, Anthony Macdonald, Jake Mitchell (6 February 2015). "Gina Rinehart sells out of Fairfax Media". The Sydney Morning Herald. Retrieved 9 February 2015.
  9. ↑ "Australia's Fairfax cuts jobs and changes newspapers". BBC. 18 June 2012. Retrieved 18 June 2012.
  10. ↑ Zappone, Chris (18 June 2012). "Fairfax to shed 1900 staff, erect paywalls". The Sydney Morning Herald. Retrieved 18 June 2012.
  11. ↑ 11.0 11.1 "History of the Sydney Morning Herald". The Sydney Morning Herald. 2011. Archived from the original on 10 April 2013. Retrieved 12 November 2011.
  12. ↑ 12.0 12.1 "Let battle commence". The Economist. 24 April 1997. Retrieved 12 November 2011.
  13. ↑ Gardiner-Garden, John; Chowns, Jonathan (30 May 2006). "Media Ownership Regulation in Australia". Parliamentary Library (Parliament of Australia).
  14. ↑ Schatzker, Erik (18 November 2003). "Conrad Black quits". The Age (Australia). Retrieved 12 November 2011.
  15. ↑ Smith, Michael (11 December 2007). "Conrad Black's legacy in Australia". The Drum (Australian Broadcasting Corporation). Retrieved 12 November 2011.
  16. ↑ Suich, Max (26 February 2005). "Review: The Fall of Conrad Black". The Sydney Morning Herald. Retrieved 12 November 2011.
  17. ↑ "Fairfax buys online dating service". The Sydney Morning Herald. 11 July 2005. Retrieved 6 January 2011.
  18. ↑ "Stayz Holiday Accommodation – Holiday Rentals". Stayz. Retrieved 13 November 2010.
  19. ↑ 19.0 19.1 Johnston, Eric (5 December 2013). "Fairfax sells Stayz accommodation website for $220m to HomeAway". The Age (Melbourne). Retrieved 5 December 2013.
  20. ↑ "Fairfax Name Change". 12 January 2007. Retrieved 24 March 2007.
  21. ↑ "Southern Cross Broadcasting sold for $1.35b". Australia: ABC News. 3 June 2007. Retrieved 3 June 2007.
  22. ↑ "Fairfax email to staff about job cuts". The Australian. Retrieved 26 August 2008.
  23. ↑ fairgofairfax.org.au
  24. ↑ Bartholomeusz, Stephen (10 November 2011). "Fairfax ends the romance". Business Spectator. Retrieved 12 November 2011.
  25. ↑ Dick, Tim (11 November 2011). "End of an era as Fairfax family calls it quits". The Sydney Morning Herald. Retrieved 12 November 2011.
  26. ↑ "Marinya Media divests ownership of Fairfax Media" (PDF). The Australian Financial Review (Press release). 10 November 2011. Retrieved 12 November 2011.
  27. ↑ Jackson, Sally; Kitney, Damon (12 November 2011). "Questions over timing of Fairfax's volatile farewell". The Australian. Retrieved 12 November 2011.
  28. ↑ Walters, Kath (17 May 2012). "Rinehart's pitch for Fairfax board: why it's going wrong". Leading Company.
  29. ↑ Simpson, Kirsty (18 June 2012). "Rinehart steps up Fairfax board battle". The Sydney Morning Herald. Retrieved 18 June 2012.
  30. ↑ Jackson, Sally (12 October 2013). "Publisher loses fight to keep BRW in print". The Australian (News Ltd). Retrieved 5 December 2013.
  31. ↑ "FAIRFAX MEDIA ACQUIRES NETUS PTY LTD" (PDF). 2012.
  32. ↑ Tabakoff, Nick (7 November 2007). "Fairfax to axe syndicated programs". The Australian (News). Retrieved 12 November 2007.
  33. ↑ "Interview: Colin Fraser". Australian Music Online. 2004. Retrieved 12 November 2007.
  34. ↑ "Southern Cross falls to Mac and Fairfax". The Australian. 3 June 2007. Retrieved 3 June 2007.
  35. ↑ Fairfax and Macquarie to merge radio networks ABC News 22 December 2014
  36. ↑ "Kiis acquires Perth's 96FM to complete national network". AdNews. 22 December 2014. Retrieved 19 January 2015.
  37. ↑ "96FM Perth sold to ARN for $78m". Radio Today. 22 December 2014. Retrieved 19 January 2015.
  38. ↑ "And the deal is done...finally!". Radio Today. 31 March 2015. Retrieved 1 April 2015.
  39. ↑ "MRN Fairfax merger complete". Radioinfo. 1 April 2015. Retrieved 1 April 2015.
  40. ↑ Fairfax Syndication. fairfaxsyndication.com
  41. ↑ "Home page". Cuisine. Retrieved 12 November 2011.
  42. ↑ "Corporate". Rural Press. 31 December 2009. Retrieved 12 June 2011.

External links