Fairfax is under threat again
Quick action is needed if public-interest journalism is to survive

Now there appears to be two investment or “equity groups” bidding for Fairfax Media, with TPG Capital being joined by Hellman & Friedman – a real “blast from the past” that one.

The former, on its record, is a short-term profit taker; the latter has an unprepossessing history with Fairfax (think its partnership with the arrogant Canadian Conrad Black and the depressing leadership team it assembled).

When I was running the Age as managing director of David Syme & Co. Limited from 1964 to 1983 (which became part of the Fairfax empire), the notion of government funding or assistance for newspapers was unthinkable. It was perceived as a threat to journalistic independence.

Now, however, I believe this may be the last chance for quality journalism to survive in Australia. That is how serious the threat to Fairfax by the current auction for its assets is for Australian democracy. Alternative sources of information and analysis are essential for keeping decision-makers accountable.

Three Fairfax mastheads are in the jaws of predators with worrying track records. The Sydney Morning Herald, the Age and the Australian Financial Review have been the frontline warriors for investigative, fearless and public-interest journalism in Australian newspapers for half a century.

They have been gutted by internet forces that have swamped newspapers around the world by taking their revenue.

In Australia, the trend is more serious than anywhere else because the death of Fairfax would leave us with only one huge media chain, owned by cynical powerbroker Rupert Murdoch.

One of the many flaws of the newspaper industry in recent decades has been its failure to explain why big teams of journalists are so vital to the watchdog role that the media performs. It is only their journalists who have provided hundreds of sets of eyes and ears on the politicians, institutions, business leaders and others who affect the lives of all citizens.

Television, radio and internet newsrooms are tiny by comparison. The only other hope for alerting Australians to what is happening is the ABC, which employs a large number of journalists and has an excellent record for outstanding exposés, but its numbers are spread very thinly around the country because of the organisation’s national and regional obligations – and the continual governmental budget cuts.

It is the newspaper newsrooms that have broken most of the important stories, and have led many movements that brought historic changes at national, state and local levels. It is the newsrooms that have forced most of the royal commissions, exposed most of the corrupt politicians and governmental shortcomings, and revealed most of the crooked businessmen and crime leaders.

If Fairfax journalism disappears or is crushed further by an uncaring asset trader, then the Murdoch monolith will have no competition. That would be a recipe for complacency or, even worse, misuse of power and influence.

The Australian public can only let its views be known – and hold leaders, political and otherwise to account – if it has information from a variety of sources.

Democracy depends on journalists providing an early warning system.

Journalists have become more and more stretched, especially with the constant expectation to report and update on all “platforms”. And this includes journalists at the ABC.

A quick edit of handouts, comments by press secretaries and reprinting other journalists’ work is the easy way out.

It is the Age, the Sydney Morning Herald and the Australian Financial Review, that are currently under the most immediate threat now that TPG Capital has increased its bid to $2.87 billion for Fairfax Media, and Hellman & Friedman has entered the lists.

Make no mistake about it – quality, investigative journalism would not be the priority whoever wins the auction.

We have a clear example in Melbourne of the “rape and pillage” mentality of Texas-based TPG Capital, which has US$75 billion of reported assets.

Its strike on Myer was a classic example: TPG Capital reportedly made well in excess of $1 billion after selling assets, cutting costs (introducing “efficiencies”), borrowing and then taking its gains offshore before the Australian Tax Office could take its “share” of the capital gains. This was a salutary lesson for us all.

The track record of Hellman & Friedman here scarcely inspires confidence.

There are models overseas, of governments trying to ensure that newspapers and journalism survive “in the public interest”.

Taxation assistance, grants for public-interest journalism, public-minded benefactors providing support without demanding editorial benefits or control – these are possible directions to go.

My concern, as former managing director and (for some years) editor-in-chief of the Age, is that the investors seek to drive for profits whatever the economic or competitive climate is. The only way that can be achieved is by dispensing with the very lifeblood of media outlets: their capacity for news reporting with time for analysis, and also with a diversity of views being represented. Meanwhile, consultants (driven by share quotes) urge the raising of prices while reducing the range, space and depth of coverage for readers.

Further, it seems the senior management at Fairfax – instead of justly being rewarded financially for innovation, for strengthening the company and for introducing creative ways to gain extra sources of revenue – are drawing their increasing salaries and bonuses from providing greater profits by dispensing with staff. (And often the best staff members go because their wage savings are greater.)

What a short-term spiral into the abyss this has become!

The “Kardashian” syndrome, the clickbait sensationalism, the mischievous telling of part of a story, the invasive reporting of the trivial, the use of rumour-mongering, and the use of so-called sources who are neither identified nor checked out by editors. This is what the desperate attempt to gain readers’, viewers’ and listeners’ attention has become.

From firsthand knowledge, I know the concerns that stimulated the formation of the Australian Press Council more than 40 years ago. They were to allow the reader to go to an independent umpire to right the wrongs of intrusion and inaccuracy.

It was an attempt to ensure newspapers that tried to be fair were recognised, and it was an attempt to lift journalistic standards and therefore the credibility of serious media.

For some in the journalistic world, though, power, influence and profits are the three main objectives.

Of course the media landscape has changed enormously this century. Advertising is being hoovered up by other organisations such as Google and Facebook. Classified advertising has moved away from the Age, the Sydney Morning Herald and others.

Sadly, this loss of revenue happened at Fairfax without a fight. Chaos in the 1980s followed the family fragmentation, with young Warwick and his appalling advisers (think Laurie Connell) putting the newspapers into the hands of people who had little understanding of what they were doing. Nor was there any attempt to consider issues of public responsibility.

In case some believe that managing newspapers is like selling widgets – with the more revenue gained by increasing sales the better, and with profits being the Holy Grail – I wish to present another view.

Why do courts, parliaments and institutions across the globe give special privileges and protection to journalists? (The budget lock-up here is just one example.) It is because the press is seen as a conduit, with all its imperfections, to the people. And that decision-making in a democracy could not be conducted in a darkened, locked room. At least that was the theory.

As stated in the Universal Declaration of Human Rights, “The free flow of information and ideas lies at the heart of the very notion of democracy”.

Australia is a robust democracy, and its citizens need a variety of sources of information from which to form their opinions. They have the right to know what is going on.

Relying on the Murdoch media empire and a few others, plus the ABC, leaves us all well short. The ABC is so often under attack from those on the unthinking right who do not seem to recognise the price that would be paid by an enfeebled public broadcaster.

Something needs to be done – and quickly. In the meantime, shareholders (including the fortunate executives) must not be allowed to cash in their chips. The company’s survival as an alternative news source is too important for that.

I agree that a prompt public inquiry into journalism in this country needs to be undertaken. An independent and experienced panel could report publicly to parliament, with overseas experiences drawn from and those with ideas encouraged to contribute.

While recognising the current attempts by the Senate to investigate “public interest journalism” under Sam Dastyari, the game might be lost for all time if we await its deliberations due at the end of the year.

Three months from go to whoa would be my deadline for a public inquiry – with any change in media ownership being suspended for six. The Foreign Investment Review Board should step in now and block the two takeover combatants “in the public interest”.

Fairfax is profitable, so it can hang on until then. And the issues involved are crucial for this country and for democracy.

The results will affect all of us. Our prime minister knows it best of all.

Ranald Macdonald

Ranald Macdonald is a former managing director of the Age and past chairman of the International Press Institute.

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