Fairfax board holds out against Rinehart despite share dumping threat

The board of Fairfax has held firm on its refusal to offer its biggest shareholder Gina Rinehart boardroom seats unless she commits to the company’s charter of editorial independence.

The statement from the board came after it this afternoon discussed whether to allow Rinehart – who owns nearly 20% of the company – to join.

Rinehart is widely believed to have made the investment in order to have a wider voice on issues such as carbon tax, taxation of the mining industry and climate change. In a statement released to the ABC this week, she threatened to sell her stake in the company unless she gets on the board.

Today’s statement from Fairfax:

“SYDNEY, 27 June 2012: Fairfax Media Limited [ASX:FXJ] today advised that it has been unable to extend an invitation to Mrs Gina Rinehart to join the board.

“Chairman Roger Corbett said that agreement had not been reached on terms acceptable to the company.

“Mr Corbett said: ‘I regret that agreement has not been reached for Mrs Rinehart to join the Fairfax Media board of directors. I hope that this might be possible in the future. However key elements yet to be agreed include acceptance of the charter of editorial independence as it stands and the Fairfax board governance principles as agreed by all existing directors.

“‘In coming to this view the board has gauged the opinion of other shareholders and noted some of their recent public comments on these matters, noting in particular they share the company’s view on maintaining editorial independence and their desire that board members act in the interests of all shareholders.

“‘The company has received tens of thousands of emails and other correspondence from shareholders, our readers and others making it clear that they support Fairfax’s long-standing position on editorial independence,’ Mr Corbett said.”

Fairfax is currently going through dramatic changes with a major restructure and a large number of redundancies planned. This week three of the company’s most senior editorial staff departed.

Comments


  1. DMR
    27 Jun 12
    9:46 pm

  2. I hope she takes control and cleans house. The current board have presided over a long term share price and revenue collapse and need to be fired, for the good of the company.

    Gina is the only hope Fairfax has of escaping oblivion, but I sense that some in Fairfax would rather sink it than have it commandeered by someone they see as an ideological enemy.

  3. Doom in June
    27 Jun 12
    11:10 pm

  4. Great thinking DMR. Have you not noticed that the decline of the Fairfax metros has coincided with their weighting to the lazy, opinion-based side of the journalistic ledger? Does it not occur to you that a fulsome burst of editorial rhetoric might be exactly what sinks the whole enterprise?
    Of course the board are dolts. They have been for 20 years. (Evidence: the chairman once asked Eric Beecher for advice!) Now they have dolts as managers to match. But that is not to be cured by having a very unhappy rich person use them as load hailers.
    AS things stand we may shortly be left with the ABC alone and nothing for their news readers to read from.

  5. Anonymous
    28 Jun 12
    1:47 am

  6. DMR tradional media companies all over the world are struggling with how to generate revenue in a digital world and seeing their share prices hit. Throwing money and mining experience at the problem is not going to fix it. I applaud the board’s decision. Maybe Gina should concentrate on Ten, as she’s obviously been doing such a terrific job over there.

  7. redc
    28 Jun 12
    4:28 am

  8. Internet 1 Fairfax 0

  9. Mike
    28 Jun 12
    6:13 am

  10. This was the only sensible decision by Fairfax to protect their brand which would have collapsed had they compromised their integrity and values for short term gain.

    And since when is Gina Rineheart a positive for a media company. It’s not like Channel 10 is doing so well is it ?

  11. Dead
    28 Jun 12
    9:02 am

  12. With Rinehart, funds no readers.

    Without Rinehart, readers no funds.

  13. ash tag
    28 Jun 12
    10:07 am

  14. Good on the board and its chairman for taking this vital decision.
    I personally support their decision wholeheartedly and will be reading Fairfax mastheads for as long as it remains the case.

  15. Mat R
    28 Jun 12
    10:31 am

  16. If people think she’s in it for business reasons, they’d be very mistaken. She’s been almost candid about that. No matter what your idealogical bent, this just cannot be a good thing for Australian media. @Dead’s comments are pretty much bang on. News pretty much owns the right wing camp, so why is it a sound business idea to pursue the same audience? Fairfax is the closest thing we have to an independent voice in press. Right-wingers think its lefty cause it doesn’t agree with them. Theres a difference.

  17. zumabeach
    28 Jun 12
    10:35 am

  18. Why doesn’t she just buy 50 per cent of the shares and then she can do whatever she wants? For her that would be small change, especially the way the share price continues to head south. Anyway, the new newsroom model announced this week is a jargon-riddled joke. It looks like it was drawn up by a bunch of Harvard School of Economics pointy heads with too much time on their hands and no idea of how to run a team of reporters and support staff. Keep it simple stupid! The new appointments to make this mess work don’t exactly inspire confidence either. What skills and insights do they have that those they replace didn’t have? Just another bunch of Fairfax time servers.

  19. Ben #2
    28 Jun 12
    10:43 am

  20. If Gina gets bored after getting on the board she’ll sell her shares anyway and Fairfax would be even worse off.

  21. Dave
    28 Jun 12
    12:21 pm

  22. Strategy might be to buy <20% shares, pick a public board fight, watch shares tumble, then buy the majority of shares, clean out the board, take a specific stand on issues, employ only those who want to keep their jobs, watch readership and ad sales rise, and then see share values go up. So does the public care about the editorial stance and so called independence? I doubt it. She's onto a winner.

  23. AdGrunt
    28 Jun 12
    1:01 pm

  24. ABC must be rubbing their hands.

    Pretty much the only national, even regional, source of broadly unbiased news.

    I wonder how much the Coalition would screw it up if they gain power.

  25. fairfax escapee
    28 Jun 12
    1:47 pm

  26. Can I tell you how bad things are at Fairfax:

    1/ When a melbourne football team plays in Canberra they often get a local photographer, not a journo, to file match reports for the Sunday Age

    2/ Media House newsroom has more empty desks than occupied ones.

    3/ A senior Age editor invited the Occupy Melbourne mob to leave the City Square and set up camp outside Media House. Seriously.

    4/ There are at least four Age reporters who focus primarily on environment and climate change. They no longer cover Melbourne outside the Northcote-Yarraville-St Kilda triangle, but they have four reporters doing almost nothing else but climate stories. The public hates the carbon tax and is bored with yarns that say Luna Park will soon be under water, but the Age keeps pushing it and the public keeps not buying.

    5/ Every senior Age editor with any hope of a job at the ABC is working the phones right now.

    6/ A veteran Melbourne journo was rejected for a job at the Age because an editor said “I think she votes Liberal”. Said at a morning news conference in front of witnesses.

    What the Age did was madness when it decided to ape The Guardian, which is in a fiercely competitive newspaper market and wanted to lock up the liberal-green 15% of that market. The Age could have taken on the Herald Sun as a general, better read for Melbourne, but instead it focused on a small segment of a general market.

    Why, because it is cheaper to run a “viewspaper” than a traditional organ of honest reporting and balanced debate.

    I expect Gina Rinehart to force an extraordinary general meeting, wipe the current board and end up with control. And you know what, people I know at the Age are quietly barracking for her. It’s the propagandists, overpaid execs and time-servers who are hoping Gillard funds “quality journalism” (what a joke) and drives economic reality from their door.

    It’s sad when a paper dies, but without Gina it’s curtains for the Age.

  27. Darren Horrigan
    28 Jun 12
    3:44 pm

  28. Great post from fairfax escapee. Nothing like an insider’s perspective.

  29. Ann
    28 Jun 12
    3:55 pm

  30. Fairfax shares hit fresh 52 weeks lows today 52.5 cents!!