Fairfax reunites digital and print mastheads
Fairfax Media’s major newspaper mastheads are to be reunited with their online versions in the same division as part of the company’s restructure announced this morning.
However, the share market initially reacted poorly to the company’s changes, which do not appear to be particularly far reaching in terms of product strategy. Fairfax’s share price fell to $1.36, close to its low for the year of $1.32.
CEO Brian McCarthy revealed a new organisational structure consisting of nine business units.
- Metropolitan Media, which will include both print and online editions of the Sydney Morning Herald and The Age within the same unit. It will also include a national sales team
- Australian Regional Publishing
- Financial Review Group
- Fairfax Radio Network
- New Zealand Media
- Agricultural Publishing
- Printing
- Digital Transactions
- Trade Me
The investor presentation also saw the company formally state its ambition: “To be the leading multi-platform media company in Australasia and to deliver long-term sustainable earnings growth for shareholders”. This will focus on news, information and entertainment content; connection people, businesses and communities and on transaction marketplaces.
In a press release the company claimed: “The strategy will transform Fairfax Media’s business model to adapt, integrate and future-proof the company in an era of unprecedented change; to strengthen Fairfax’s competitive position; and to improve profitability. Once in place, the new strategy will position Fairfax Media as an integrated, multi-platform company comprising leading media brands in Australia and New Zealand, enabling the business to monetise content through any channel.”
It was unclear what future role Fairfax Digital boss Jack Matthews would have within the company. When asked about it at the shareholder briefing, McCarthy said that Matthews was interested in a number of potential new roles.
Potentially the highest profile new role within the company will be chief executive of the metropolitan media unit, reporting in to McCarthy. According to the company: “Fairfax Media is undertaking a process to recruit a chief executive for the metropolitan media business unit, with a number of other key appointments under the new organisational structure to follow.”
The move will inevitably drive speculation about greater sharing of editorial content not just between online and print properties but across mastheads.
McCarthy also signalled that Fairfax is now a believer in paid digital content
He said: “Once the new strategy is in place, the integration of our resources will strengthen our business and allow us to take advantage of the myriad opportunities presented to us by a multi-platform world. “In addition, we will charge for content wherever possible, particularly for online and emerging platforms that provide new revenue streams.
“New platforms mean we are reaching more readers than ever before with our great content – in the future we must be able to monetise that content, while more integrated selling will enable us to provide advertisers with the best opportunities to reach their audiences.”
McCarthy also recorded a video message for staff:
(Hat-tip: Crikey)
Tim Burrowes founded Mumbrella in 2008. He worked on Mumbrella until 2021. At various points he was editor, content director and editor-at-large.
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Inevitable.
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Jack Mathews has been very effective in his role, it would be a loss to FFX for him to be shafted in this re-org.
Disclosure: I’m a former FD employee.
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Wow McCarthy might have saved his own ass. All these divisions report to him? Sentiment was up until today his days were numbered.
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Jack has more knowledge about the evoloving landscape of digital media than Brian does who has come from regional (country) press.
It seems like Brian is obviously fighting to justify and keep his job at the expense of the better equiped and educated in the new online world Jack Matthews.
It is well known at Fairfax Media that Jack and Brian do not get along for the above mentioned reasons. Jack has even stated this himself at a number of staff meetings; maybe in joking but as they say.. “Many a true word is spoken in jest”
If Jack does leave or loses the opportunity to head the metro business unit of the renewed publisher, I would be very suprised if the Fairfax Media share price doesn’t fall through lack of confidence in having a roukie online business head like Brian.
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Steve: Jack’s resume is interesting. You should check it.
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I worked at FD for many years, and it was clear Brian and Jack don’t get along. I can’t see Jack wanting to stay and work for Brian. Brian is old school and will just put his rural mates into that top job. Real shame for digital in Australia if Jack goes – he had the vision to acquire all of the transactional websites which as driving the revenue at that place and now have their own division.
He was also a strong advocate for culture and equality (ie women in senior roles). Jack has strong loyalty amonst his staff and I think NEWS may be getting a few CVs today.
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I know…US telco…. etc…
Don’t get me wrong, I have a lot of respect for the man and know more than the general Joe about him. My comments were aimed towards Brian and the Fairfax Media (FM) board…
I just think it’s a shame that FM have not gone to market with a definite confirmation on what will happen to Jack. Not a feel good moment for the company who really should be all out to support him considering he is heading the online business unit that has by large, kept FM afloat over the past few years during the GFC and declining print ad sales.
FM have been talking about the regional / metro restructure for at least 4 months now. I am sure it doesn’t take this long to give Jack what he wants and deserves.
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check out this 5 minute sleeping pill from McCarthy
https://www.youtube.com/watch?v=8CcM6beN4Yk&source=cmailer
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Apparently Jack’s more popular than most thought from the outside looking in… does the on-line business generate any real money? The traditional media still well and truly carries the can does it not?
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Pete – Trade Me contributes $90m EBIT … digital div combined (inc. trademe) does about $290m annual in rev only so I guess do the math. Cola’s notes on digital transactions talk EBIT improvements for transactions so you’d assume they’re profitable.
Media division (from the investor notes today) summary was full of horrible digi-fluff and no numbers around EBIT or even revenue so reading between the lines the media/content properties (Age/SMH/Vine) couldn’t be contributing much profit but am sure they’re contributing the most when it comes to expenses and outgoings.
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One wonders how the Financial Review remains so siloed and away from intergrated in the face of falling circulation in all editions.
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The siloed AFR seems to be in a position for an easy sale, or perhaps to float off as a separate entity.
The digital division has been propped up internally with manipulation of print sales to online. How do you increase the digital divisions performance, just increase the wholesale rate paid internally for classified ads to be carried from print to online.
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@Roadkill. That would be true except for the inconvenient fact that online classified revenues are included in the print results, not the FD results.
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Jack is just a guy who is well paid. No need to worry about him. More interesting to see how a bunch of print guys will manage a digital business that they fundamentally detest. Ninemsn and yahoo must be having Krug tonight.
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Stuart: You ask, how will a bunch of print guys manage a digital business they fundamentally detest?
Expect them to implement NDM 2.0.
While they may not be able to find a vertically challenged ex-satellite TV guy to run it, they can probably round up any number of Campbell Reid clones to quote the appropriate cliches whenever McCarthy comes calling.
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What used to be known as FD Transactions (not sure what all the online classies, RSVP, Trade Me and the others are known as now) were pretty good at making decent profits. Online Media wasn’t too shabby either, but the Transactions business was better by a mile.
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anon-coward … what profit would you think is coming for digital outside of trademe. given revenue total inc. trademe is 290m and trademe ebit is 90m how much could it really be? curious as to why online media didn’t mention divisional revenue or ebit performance at all in their presentation.
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