Union calls on Nine to clarify future of Newcastle Herald, other Fairfax regional papers

DEAL: Fairfax boss Greg Hywood and Nine counterpart Hugh Marks at Nine headquarters in Willoughby last week.
DEAL: Fairfax boss Greg Hywood and Nine counterpart Hugh Marks at Nine headquarters in Willoughby last week.

The journalists’ union has called on the Australian Competition and Consumer Commission to “hit the pause button” on Nine’s takeover of Fairfax until the TV company clarifies whether regional papers such as the Newcastle Herald will be part of the deal.

Nine and Fairfax announced a $4 billion tie-up six days ago, but Nine has offered conflicting statements over the future of Fairfax’s regional and rural mastheads.

Nine chief executive Hugh Marks reportedly told a meeting of investors last week, in response to questions about the future of Fairfax’s regional papers, that it would be “no surprise” that Nine would focus “on what we see as the high-growth components of what this deal provides”.

“Other businesses that are not as high growth may be better off serviced in some other environments,” he was quoted as saying, fuelling speculation that some or all of the regional papers could be sold off. 

Australian Community Media, Fairfax’s regional and rural publishing arm, has been under structural and financial pressure. Fairfax Media’s 2017 annual report said operating costs were down nine per cent but revenue had fallen 11 per cent.

Many of the division’s 160 mastheads joined Fairfax when it merged with Rural Press in 2007 to create a company worth $9 billion. Fairfax Media is now valued at $2.1 billion.

A Fairfax spokesman said it was “business as usual for our Australian Community Media business and people”. 

“It is an incredibly well managed, profitable, high cash-generating business with great connections with rural and regional communities through its network of newspapers and websites,” the spokesman said.

The ACCC should hit the pause button on this takeover until it has guarantees on editorial independence and the future of regional and rural mastheads.

Marcus Strom, MEAA

Departing Fairfax chief executive Greg Hywood told staff last week that ACM, which includes the Newcastle Herald, Maitland MercuryPort Stephens Examiner, the Star and other papers in the Hunter, “throws off a lot of cash” but was nevertheless under review. 

“Whenever businesses merge, there’s a review of assets,” he said. “We’ve looked at the future of the regional assets. It’s a tough business and, you know, we’ve been pretty explicit that we’re looking at options.”

But Nine’s director of news, Darren Wick, was quoted as saying in The Weekend Australian on Saturday that he could envisage Nine’s regional newsrooms co-operating with Fairfax regional papers, singling out Newcastle as a case in point.

“I would think it would be a great idea,” Mr Wick was quoted as saying.

“Take the Newcastle Herald: it’s a great paper. Some of the work they have done by Joanne McCarthy exposing the Catholic church, which won a Gold Walkley, has been amazing.

“We have a really strong presence in Newcastle with NBN and in northern NSW. It would be crazy for our news director there not to be talking to the editor and saying, ‘What kind of things can we work on?’”

No guarantees

Asked this week if it could guarantee that the Newcastle Herald, which has been owned by Fairfax since 1978, would join metropolitan mastheads like the Sydney Morning Herald and The Age in the new Nine subsidiary, Nine management avoided a direct response.

“Nine has a had a long-term investment in the Newcastle market through NBN, which is one of our most profitable businesses,” a spokesperson said.

“Nine has also been investing heavily in regional news across the country, in partnership with Southern Cross Austereo.  

“We firmly believe that this merger, which has yet to be approved, will only strengthen our investment in the region as we look to scale our local interests. Until approvals from relevant shareholders and regulators are made, it is premature to make further comment.”

The Media, Entertainment and Arts Alliance’s media federal president, Marcus Strom, said on Tuesday that the union wanted more certainty for Fairfax’s regional journalists and the communities they served. 

“Even if we assume the best of intentions from Nine management, there will be immediate pressure to merge newsroom functions to cut costs,” Mr Strom said.

“And Nine has made no guarantees about the future of the regional mastheads, portraying them in some interviews as unwanted assets.

“The ACCC should hit the pause button on this takeover until it has guarantees on editorial independence, the future of regional and rural mastheads and has time to consider the recommendations of its own digital media inquiry.”

Under scrutiny

The ACCC, which will spend 12 weeks reviewing the Nine-Fairfax deal, could investigate whether the transaction would “result in a reduced number of voices and the potential for a consequential loss of, or reduction in, quality news or local and regional content”, as set out in its 2017 guide on media mergers.

Chairman Rod Sims said on Monday that the ACCC would look at the deal “extremely carefully”.

Several reports have suggested Fairfax could look to sell off unwanted regional titles to News Corp, the other main player in Australia’s regional publishing market.

The two companies announced two weeks ago that they would start sharing printing services.

News Corp bought 12 dailies and 60 community titles from the APN regional network for $37 million in 2016 but is now trying to offload its regional mastheads.

The Australian Financial Review, a Fairfax publication, reported in April that Sydney-based private equity firm Allegro Funds was running the numbers on both News Corporation’s and Fairfax Media’s regional publishing outfits.

It also reported that Anchorage Capital Partners was interested in both companies’ regional divisions.

If, as expected, Nine’s takeover of Fairfax survives the ACCC examination, it would need to win approval from at least 75 per cent of Fairfax shareholders.

This story Union calls on Nine to clarify future of Newcastle Herald, other Fairfax regional papers first appeared on Newcastle Herald.