The announcement of the Fairfax–Nine Entertainment merger took the industry by surprise. It has journalists worried about media diversity and the future of Fairfax’s flagship mastheads. By Alex McKinnon.

Fairfax journalists surprised by Nine merger

Fairfax journalist Kate McClymont with MEAA president Marcus Strom at a press conference on Thursday.
Credit: Alex McKinnon

Fronting up to a press conference outside Fairfax’s Sydney headquarters to discuss the biggest media deal in decades, veteran investigative journalist Kate McClymont jokingly pushed all the non-Channel Nine microphones out of her way.

“Only this one now,” she proclaimed, pointing to the Channel Nine mic. “I’m excited for my new career pursuing welfare cheats.”

For a merger of such magnitude, one that will affect hundreds of journalists, no one saw it coming. In an announcement to the ASX on Thursday morning, Nine Entertainment and Fairfax Media told Australia they would merge – a deal worth $4 billion.

In a terse, seven-paragraph press release shortly after the news broke, Fairfax chief executive Greg Hywood provided some more detail on the end of the oldest name in Australian media. The new media giant – should it survive numerous “regulatory hurdles” Hywood flagged with staff during a newsroom scrum on Thursday afternoon – will include Nine’s television properties, Fairfax’s news mastheads, property site Domain, streaming services Stan and 9Now, and the Macquarie Media radio network.

Despite Hywood’s assurances in his release that there will “be plenty of Fairfax DNA in the merged company”, Nine’s 51.1 per cent stake and majority board control of the joint venture looked more like a takeover than a merger. Addressing Fairfax employees in Sydney on Thursday afternoon, Hywood was more explicit, admitting that Fairfax would be “a fully owned subsidiary” of Nine. The new company will be called Nine.

Fairfax employees have resigned themselves to management revealing major changes through all-staff emails, but the secrecy preceding the merger announcement meant even senior editorial staff were caught by surprise. One journalist told The Saturday Paper “the editor of The Age didn’t know about this announcement”. Another said, “a number of staff didn’t receive Greg’s email and learned about it through social media”.

“These sorts of bombshells are always dropped on us from above,” a senior journalist said. “I know they’ll argue commercial-in-confidence and that they couldn’t say anything until they announced to the market, but there are so many occasions where we are told at the last minute, by email. We’re fucking sick of it.”

Amid emerging details around structure and governance, the fact the Fairfax name will cease to exist under the deal proved a key sticking point for journalists and employees at its mastheads.

While Hywood assured staff that titles such as The Sydney Morning Herald and The Age would remain, Nine chief executive Hugh Marks admitted at a press conference that Nine’s main interest in buying Fairfax was acquiring Stan and Domain, rather than the mastheads. In an interview with Marks last year, Fairfax journalist Lucy Battersby noted that “print products are not a strategic asset for Nine”.

A senior Fairfax journalist told The Saturday Paper that newsroom staff were not convinced the newspapers they work for would survive. “They’ve said they have no plans to close the mastheads, but we all know ‘no plans’ can change overnight,” the journalist said.

The ASX announcement of the merger trumpeted “annualised pro-forma cost savings of $50 million which will be fully implemented over two years”. In a company-wide email of his own, Marks said “such a merger of two major media groups will of course result in some duplication of functions and you will read about synergies that will be pursued by the business as part of this transaction”.

Somewhere in that jungle of doublespeak, you might have caught a glimpse of the phrase “duplication of functions”. To Fairfax staff, it seems to flag an inevitability – merging two of Australia’s largest media companies will likely see the new entity shed jobs for sales, administrative, technical and production staff.

For Greg Hywood, this deal will be his legacy at the company where he has worked for all but seven of the past 42 years. It will see him step down from his role as chief executive, with Nine’s Marks taking the chief executive role of the merged company. Speaking at Fairfax’s Sydney offices, Hywood used the occasion to try some gallows humour. “The shoe is on the other foot,” he said. “I’m here announcing my own redundancy for a change.”

Hywood will depart Fairfax in about six months, having presided over hundreds of editorial job cuts, the sale of regional radio stations in South Australia and Queensland, and years of declining profits and share prices. As editorial staff went on a week-long strike to protest 125 job losses in May 2017, Hywood pocketed a $2.5 million share bonus.

On Twitter, Kate McClymont was withering in her criticism of Hywood’s communiqué. “After 150-plus years this is all we get: ‘I would like to thank everyone for their contribution to Fairfax,’ ” she wrote. Later she joked, somewhat grimly, that she was in talks to co-host a revamped 60 Minutes with Karl Stefanovic.

The clash of cultures between the two companies was a source of concern for many Fairfax staff. To one – already halfway out the door when the merger was announced – the thought of working on A Current Affair-style exposés of dodgy plumbers sealed the deal.

“I’m not going to work for a video department that follows Nine’s current editorial approach,” the video producer said. “Can Kate McClymont write about Don Burke now? Can Clem Ford write about Matthew Johns?”

But the gulf in corporate cultures goes beyond reporting styles. While Fairfax’s newsrooms are some of the most heavily unionised in the country, Nine’s employees are not covered by an enterprise bargaining agreement. The merger comes as the Media, Entertainment and Arts Alliance negotiates a new EBA for its Fairfax members.

The union’s communications director, Mark Phillips, said that while the MEAA would seek to protect Fairfax workers’ entitlements and the right to collective bargaining during the merger, outlets such as Nine were traditionally much harder for unions to break into. As union head Marcus Strom was speaking outside Fairfax headquarters on Thursday, the MEAA banner set up behind him slumped mournfully to the ground. It was hard not to read into it.

“We’ve historically had very strong collective enterprise agreements at Fairfax, which have embedded strong entitlements to protect our members in situations like this. Those protections are lacking in commercial electronic media,” Phillips said.

The union will push Nine to adopt Fairfax’s Charter of Editorial Independence. While Hywood assured staff that the charter was “absolutely embraced and accepted by the Nine board” before the deal was announced, what that will mean in real terms remains to be seen. Phillips said maintaining the charter for Fairfax employees was “non-negotiable for us if there’s any change of ownership”.

Journalists were especially worried about whether they would be allowed to do quality investigative reporting of a kind they deemed foreign to A Current Affair or 60 Minutes. High-profile collaborations between Fairfax and the ABC’s Four Corners seem likely to go.

“In our newsroom, we have rounds reporters whose job it is to go and find stories outside the daily news cycle – break stories,” one senior journalist said. “We have an investigative unit that produces hard-hitting, award-winning content all the time. They care about their contacts, the relationships they’ve formed over many years.

“That kind of work can take months. It’s very different to the sort of thing A Current Affair does. You just can’t compare them. I wouldn’t be surprised if we lose a lot of specialised reporters who just can’t bear the thought of general news or breaking police news like they did when they were juniors a decade ago.”

Besides the immediate implications for workers and the impact on reporting, Fairfax journalists also expressed dismay at the blow to media diversity represented by the merger. Strom urged the Australian Competition and Consumer Commission to block the takeover, calling it a consequence of the “short-sighted and ill-conceived changes to media ownership laws” passed by the federal government in September.

“We all benefit from a diverse media,” one journalist said. “Not just from having more avenues to expose problems we face as a society, but through chances to celebrate who we are as a city or a state. Whenever that’s reduced, we all lose out.”

Nine Entertainment chair and former Liberal treasurer Peter Costello will head the board of the merged company, making for a potentially chummy relationship between the new entity and the government that made it possible. Communications Minister Mitch Fifield, who made the relaxation of media ownership laws his highest priority, worked for seven years as Costello’s adviser in opposition and government. As Labor senator Penny Wong once memorably noted, Fifield “used to iron his shirts”.

Asked at the press conference if Greg Hywood had sold off a piece of print media history, McClymont could only give a pained smile: “You might say that.”

This article was first published in the print edition of The Saturday Paper on Jul 28, 2018 as "Nine cinch prevails".

A free press is one you pay for. In the short term, the economic fallout from coronavirus has taken about a third of our revenue. We will survive this crisis, but we need the support of readers. Now is the time to subscribe.

Alex McKinnon is Schwartz Media's morning editor.