Sound Familiar?
ABC The DRUM
The story of Fairfax's decline is one of managerial failure. The company has been run by senior executives and boards with no direct experience of running a media company. Instead, leaders at Fairfax have been property developers, management consultants, accountants, and rugby players. Those people did not have the experience or understanding of a people-media business to steer the ship into safe waters. Instead, they allowed Fairfax to remain at sea while competitors savaged the business. One by one Fairfax was stripped of its classified advertising "rivers of gold". The jobs went to Seek.com.au; cars to Carsales.co.au; homes to Realestate.com.au.
And shorn of those easy revenues, the only way Fairfax CEOs could "stay in the game" was to cut costs faster than revenues fell (all the while pocketing eye-watering salaries and bonuses).
Instead of having the foresight to embrace and invest in the digital age by bringing together mastheads to work collegiately, Fairfax leadership instead chose to separate the online team from the print team and run them as two distinct businesses, with "Fairfax Digital" competing for advertising revenues with the so-called "Fairfax Publishing". In 2007, I was asked to lead a team of three senior executives to visit the most progressive newspaper/media companies in the US and UK and report back to the then CEO, David Kirk. We went to the Wall Street Journal, New York Times, USA Today, Washington Post, The London Telegraph, The Financial Times and The Guardian.
We reported back to Kirk that every one of these had brought together "print" and "digital" into one resource; that is, one editorial team, one advertising team and one back office. Kirk flatly opposed doing the same on the grounds the two businesses were both very profitable. And he wanted to keep it that way.
Five years later, with the company's market value slashed from $7 billion to just over $1 billion, this integration will finally be imposed next month.
And for the first time in living memory, the change will be led by a former journalist and senior editor, the CEO, Greg Hywood, along with the advice of consultants Bain & Co (Mitt Romney's crew).
But it's too late to save the Fairfax we know. The share price has collapsed from $5 to 60c or less because no one in the market believes there is a coherent strategy for the company. And that has left the company weak and defenceless to predators such as Rinehart.
- For Fairfax read Qantas...
- For the lovely Gina read Messers Dixon et al...
- For 'Team of Senior Executives' read any one of several unions ...
And finally why can this get written up in mainline media straight away and not the Qantas debacle?