Welcome to Eureka Street

back to site


Turnbull's bone for the News Corp behemoth

  • 24 March 2014

In the closing decade of the 20th century, that distant era when intelligent people could still be heard arguing about whether newspapers would survive the rise of the internet, a departing editor of The Age sent me a handwritten note. After saying the usual things — thank you for your contribution to the paper, I've enjoyed working with you, etc. — he concluded with 'And I wish you the best of luck in these uncertain times'.

The line is etched in my memory because there hasn't been a day since when it didn't accurately characterise the plight of those who work in Australia's media.

The same editor also used to remind people that this age of uncertainty had not begun with the arrival of the internet, but with a short-sighted political decision.

In 1987 the Hawke Government allowed Rupert Murdoch's News Ltd to buy the Herald and Weekly Times, which then controlled most of the nation's daily newspapers outside Sydney. The consequence was that ownership of the metropolitan dailies, which had already been dangerously over-concentrated with three dominant players, was now, in all states except WA, in the hands of only two: the News Ltd behemoth, and an increasingly nervous Fairfax, proprietor of The Sydney Morning Herald, The Age and the Australian Financial Review.

The nervousness soon turned to panic as Warwick Fairfax — 'young Warwick' — took on massive debt to buy back shares in the company, thus restoring it to his family and thereby hoping to protect it from the acquisitive Murdoch. The debt was to be repaid by earnings from Fairfax's flourishing and newly secured business. Or at least that was the plan. But it did not work as intended because 1987 was also the year of a global share market crash that slashed company valuations, making young Warwick's debt unsustainable.

The would-be saviour left the country, Fairfax was briefly placed in receivership, and since then has staggered and faltered under a revolving-door succession of managements. Like their counterparts vainly trying to save other newspaper empires around the world, none has found a way of replacing the classified-advertising revenues that have steadily been lost to stand-alone internet sites.

And so Fairfax, once the standard-bearer of quality journalism in Australia, now offers its readers ever-thinner papers and ever more dumbed-down websites, produced by ever-shrinking staffs. Meanwhile News Ltd wields ever-greater political influence through its dominance of the nation's media.

Why rehearse this history? Because the