TUMBLEWEED: Newspaper in terminal decline as it shuts mid-week classifieds

Post mortem note #1

Here’s a question for keen students of Fairfax Media. Why are they spending $110 million building a grand new headquarters on the corner of Collins and Spencer Street to house 1,300 staff, when they don’t, er, have (cough) 1,300 staff any more? The new building is 150 metres long and about 30 metres wide, so perhaps VEXNEWS readers could suggest some uses for the very excessive floorspace nearing completion. Our first thought is that one of the floors would make a cracker of an indoor cricket stadium. But Telstra Dome is too close by. Maybe Brian McCarthy will simply rent it out. Apparently it has fantastic bicycle storage facilities, an indoor herb garden and black-water recycling facilities (if you don’t know what this, don’t ask: you really, really, really don’t want to know….)

Post mortem note #2

This one caught us by surprise, but we’re assured it’s true: If The Age is a newspaper that has built its name and reputation on being the home of classified advertising for more than 150 years, why will this coming Wednesday the 10th of December be the last day on which The Aged will ever publish a mid-week classifieds section? That’s right. You heard it here first. On Wednesday 17 December, there will no longer be a classified section published in that day’s newspaper. Lots of people have been talking about those rivers of gold drying up, but the once mighty torrent is now a series of muddy, stagnant puddles, holding little more than the oozing slime of a handful of grasping real estate agents and some mouth-breathing recruitment types. Was that a tumbleweed rolling past?

Post Mortem note #3
The Age’s Christmas Party must have been a jolly affair. Held last Thursday night at Zinc in downtown Federation Square, attendees had to thread their way through the assembled crowds visiting Melbourne for the finals of the Homeless World Cup, also being hosted at Federation Square. Apparently the security guards at Zinc had trouble working out who was who.



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4 responses to “TUMBLEWEED: Newspaper in terminal decline as it shuts mid-week classifieds

  1. R Walker of Melbourne

    I’m here for the long haul.

  2. Anonymous

    Jaspen sacked, Kirk beamed off the sinking ship – The Age has less than 2 years left.

  3. Bruce

    An unnamed “third party” forced last month’s sacking of Herald Sun editor-in-chief Bruce Guthrie, according to court documents lodged today in support of a $2.7 million claim for wrongful dismissal.

    In a statement of claim lodged in the Supreme Court of Victoria, Guthrie claims Herald & Weekly Times Managing Director Peter Blunden told him immediately after his dismissal that the sacking made him “sick to my stomach”.

    “This is not me,” Blunden is alleged to have said. “I am not driving this.”

    Asked by Guthrie who was responsible, Blunden, “breathing heavily”, allegedly replied: “It’s complicated and it’s confidential. I can’t go into it too deeply. But essentially a third party got involved. That person said something to someone who said something to someone else and it went from there.” (Sounds like Rupert M. of Manhattan)

    Guthrie was sacked without warning about midday on Monday, November 10, by News Limited CEO, John Hartigan. It came just two weeks after the most recent visit to Australia by News Corp chief, Rupert Murdoch.

    The documents reveal Hartigan had given Guthrie a pay rise just 10 weeks earlier, taking his annual salary from $390,000 a year to $410,000 a year from September 1. At the same time the company paid him a $30,000 performance bonus.

    In the writ, Guthrie recounts the conversation in which he was sacked by Hartigan claiming the CEO apologised for his treatment.

    “We are prepared to be generous because we have given you a real sh-t sandwich.” Hartigan is alleged to have said.

    Earlier he told Guthrie he’s being sacked because of ongoing tensions with Blunden.

    “I can’t have a situation at the Herald Sun , one of our most important papers, where the Managing Director and the Editor in Chief are not getting on,” Hartigan allegedly said.

    Guthrie replied: “That is simply not true … John, hand on my heart, there have been no conversations like that, I don’t know what you are talking about”.

    Hartigan, “gobsmacked”, says he can’t overturn the sacking because “there are too many things in place”. He added: “I’m very sorry.”

    Seven hours later, Blunden rang Guthrie, while he was overseeing production of the next day’s Herald Sun , to express dismay at Guthrie’s removal and tell him he’d assured Hartigan the pair got on.

    “I told Harto we have a good working relationship. I told him we watched the (Melbourne) Cup together,” Blunden is alleged to have said.

    Guthrie says his dismissal after just 21 months in the job was “capricious, unfair and unreasonable” and denied him at least one further three-year contract. The documents reveal News Limited and he were due to begin negotiations on a new contract in July next year.

    Guthrie is seeking $2,765,745, being chiefly a three-year continuation of his total salary package at the time of his dismissal — $698,915pa — plus projected annual increments, termination payments and notice.

  4. Captain Kirk

    It shouldn’t be too hard for Fairfax Media’s board to cut its dividend, boost cashflow, inflate the share price and get rid of all that pesky sneering about the decision to make David Kirk walk the plank.

    The company is paying 20 cents a share at the moment; earnings per share in 2008 were just over 24 cents a share and it had cashflow of around 27 cents a share. Fairfax paid out around $302 million in dividends, so a 50% chop to 10 cents a share would save $151 million, which would allow it to pay debt more quickly.

    In considering how far to cut, Fairfax could do worse than look at the experience of The New York Times.

    Its share price is up 24% from when it cut its quarterly payout by 74% last month. The shares finished at $US7.64 on Friday: they were at $5.34 the day the dividend was cut to 6 US cents a share per quarter from 23 US cents on November 21.

    (A 74% cut for Fairfax would see over $220 million saved annually for as long as the cut remained in force).

    The move is believed to have boosted free cash flow by an annual $US100 million, which the company said it was taking a $US50 million hit for the net cost of closing a distribution business in New York which was losing $US30 million a year.

    Its latest quarterly filing said the New York Times Company only had $US46 million in cash in the bank at the end of the quarter. The company says it is working with creditors to “manage” its debt obligations, but it has yet to explain how it plans to come up with the $US400 million it needs to find in May to fix up a debt payment. It has around $US1.1 (around $A1.5 billion) billion in total debt, less than the $A2.5 billion Fairfax has.

    The dividend was cut on all classes of shares, including those of the controlling Ochs-Sulzberger families. They own a special class of shares that give them more control over the company than non-family shareholders. (Like News Corporation and Rupert Murdoch).

    But the decision of the size of the Fairfax dividend cut will be left to the board. The big decision will be to name noted cost-cutter and anti-journalist Brian McCarthy as full time CEO. With that in mind, here’s something for Brian to look at:

    UK media reports on the weekend said a Glasgow paper group had made all its 250 journalists and publishing staff redundant and invited them to reapply for their jobs.

    The Herald and Times Group, which publishes The Herald, The Sunday Herald and Evening Times, is owned by Newsquest, the UK arm of US publisher Gannett, The Financial Times reported.

    Management said they expected about 220 staff would be rehired if they agreed to new terms and conditions. The National Union of Journalists described the move as a “brutal attempt at forcing changes.

    The Scottish newspapers have suffered a sharp downturn in sales and advertising, though they remain profitable. The Herald and Times Group said it would merge certain newspaper staffs under Donald Martin, its new editor-in-chief, to increase efficiency and make full use of new production technology.

    This could be a wonderful way for Mr McCarthy to start his reign at Fairfax and the foolish board could swallow this idea.

    One final thing: after the Rural Press merger, all the various newspaper groups in Australia and New Zealand reported to Brian McCarthy, but the Fairfax business group headed by Michael Gill reported to David Kirk. That will change when McCarthy is made CEO. That will see changes in the business group. Glen Burge, Editor of The Australian Financial Review, is one to keep an eye on.

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