Fairfax CEO hits back at News Corp, accuses it of ‘spreading lies’ and being ‘at war with itself’
Fairfax CEO Greg Hywood has fired off an email to staff at the media company accusing rivals News Corp of spreading “lies” about the company, having “deep seated cultural problems” and being “at war with itself over it future”.
The email, sent this afternoon to staff, comes after a series of pieces in News’ The Australian in recent weeks attacking Fairfax, with editor-in-chief Chris Mitchell last week accusing Fairfax of “misleading advertisers” over their readership at the Mumbrella360 conference.
News Corp’s co-chairman Lachlan Murdoch also took aim at “competitors” at the conference saying they had “talked down” print, an accusation Hywood angrily denies in today’s email.
Accusing News of “a litany of bizarre commentary” and saying senior executives there had “indulged in a series of speculative lies about Fairfax Media”, Hywood levels a series of claims including:
- News putting house ads through the ad booking system to improve the look of its revenue;
- Says News has deep seated cultural problems with a legacy of phone hacking;
- Says the company uses the media section of The Australian for “advertorial”;
- Accuses executives of spreading “lies” about Fairfax including closing print editions and talking down print;
- Says News is “in denial” over structural changes in the industry;
- Accuses the “old guard” of News of “seeing off” Kim Williams who he said was making “necessary changes”.
In the email Hywood accuses the publisher of “mad ranting and ravings of late are just their standard tactics of bludgeoning anyone who dares to have a different voice – indeed dares to challenge their view and place in the world”.
Hywood also singles out an article in today’s The Australian media section abut the paper, which reports Mitchell’s claim at Mumbrella360 the company has been “profitable for a number of weeks this year” and is now turning a profit from its digital operations.
This comes after Mitchell admitted the paper lost around $30m last year and has not turned a profit since 2008.
Hywood adds: “News flash – Fairfax Media has never stopped making profits on all its mastheads – in print and digital. Fairfax has demonstrated its ability to adapt to our competitive environment. According to emma, the industry endorsed metric, The Sydney Morning Herald is the nation’s most widely read publication across print, web and mobile.”
Later in the email he adds of News “all the reports we get is of an organisation at war with itself over it future,” adding: “Are we surprised by such behaviour? Hardly. News Corp is wracked by deep-seated cultural problems. How could we forget this is the Group whose legacy to journalism is phone hacking.”
Addressing the accusation of putting house ads through its booking system to boost recenues, a spokesman News Corp told Mumbrella: “The claim is incorrect. House ads have zero value attached to them and hence are not counted as revenue. We do put house ads through the agency system as they help us and our affiliates better plan our campaigns.”
However the company declined to respond to the other accusations put forward in Hywood’s email.
Alex Hayes and Nic Christensen
Greg Hywood’s email in full:
All,
Fairfax Media promises its readers an independent view of the world. Always.
We seek the truth. We commit to transparency. We value the clash of ideas and differing perspectives.
We also pride ourselves on running our business on the same values.
As the world of the media transforms, Fairfax has been straight about the challenges we face and the changes we are making to fulfil our core commitment – to deliver honest, at scale journalism to the communities we serve.
Unfortunately, sadly actually, News Corp seems reluctant to operate by the same standards. Indeed there is another serve of advertorial in today’s Media section in The Australian. While most of us ignore it and sometimes get a good chuckle at its absurdity, the time has come to explode some of their self-serving myths.
In a litany of bizarre commentary on the state of the industry, News Corp publications and senior management have indulged in a series of speculative lies about Fairfax Media.
They claim we are walking away from print. They claim we are talking down print, not defending it. They claim, even more strangely, it is our fault print advertising revenues in Australia are falling!
This is so ridiculous it is barely worth taking the effort to deny it.
And they have been spreading a lie that we will stop print editions of our metro and national mastheads by the end of the year. Utter garbage. And we have denied it many times.
Why would Fairfax walk away from print? Over 75% of our revenues are print based. We have more than 200 titles across Australia and New Zealand.
Moreover, the health of our Metro titles, the most challenged by digital disruption, is robust. Over the past year we have doubled their profitability by building subscription revenues and becoming more efficient; all the while improving the quality of our journalism.
And how could we “talk down” print. We all know of the structural reduction of print advertising revenues in recent years. It is occurring in all western countries. It began later in Australia because of the relative post GFC buoyancy in our economy. But soon after it began to fall sharply. And if, as seems likely, we are to reach the levels in the US and UK, there is more to go.
That is the prospect we are managing. And that is a world where, because we are adapting with a clear view of the future, there will still be a sustainable role for printed editions of our mastheads.
On the other hand, News Corp has been in denial of the changes we are all facing.
While once a great newspaper company that diversified successfully into broadcasting, News Corp’s Australian arm has struggled and resisted reshaping its news organisation in the digital age.
But lo and behold today we hear about a new business model that will change the world. In The Australian today, writing about themselves yet again: “For the first time in The Australian’s history, it is returning a profit digitally and, in a number of weeks this year, The Australian newspaper has been profitable.”
News flash – Fairfax Media has never stopped making profits on all its mastheads – in print and digital. Fairfax has demonstrated its ability to adapt to our competitive environment. According to emma, the industry endorsed metric, The Sydney Morning Herald is the nation’s most widely read publication across print, web and mobile.
Indeed News seems to be the only people who haven’t recognised Fairfax’s achievements. The industry, our investors and the ASX have certainly taken note.
Since its split in late June 2013, News Corp’s share price has gained 27% versus the 87% lift achieved by Fairfax and over the last six months Fairfax’ share price has outperformed News by close to 50%.
As the quote in The Australian demonstrates, News Corp has only just started to understand and acknowledge the disruption caused to traditional news organisations. Necessary changes initiated by a previous CEO ground to a halt as the “old guard” saw him off.
All the reports we get is of an organisation at war with itself over it future.
News’ mad ranting and ravings of late are just their standard tactics of bludgeoning anyone who dares to have a different voice – indeed dares to challenge their view and place in the world.
The good news for all media companies is relative market share of newspaper advertising is stable despite News’ hysterics. News has become so desperate it has stooped to putting its own internal “house ads” through the agency system so it can claim them as revenue. Sorry guys “Gotcha”.
Are we surprised by such behaviour? Hardly. News Corp is wracked by deep-seated cultural problems. How could we forget this is the Group whose legacy to journalism is phone hacking.
So ignore all the self-serving nonsense from News. We at Fairfax are just getting on with delivering great journalism that makes a profit.
Cue more gnashing of teeth and theatrics from Holt Street.
Regards,
Greg
Simply brilliant. Just like that Carri Markson’s piece today on the Daily Mail. Amanda Meade, a senior and experienced journalist was very quick to debunk all of Carri’s myths on The Guardian’s website this afternoon. It’s time we all stood up to the bullies at Holt Street and stopped reading their schlock once and for all!
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The great irony is that Greg Hywood is the one destroying Fairfax.
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“Kick This Mob Out”. The way the Daily Telegraph’s circulation is declining we are taking their advice.
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Good on you Greg Hywood. The bullies at Holt Street are insufferable and Linnell is right – obsessed with Fairfax.
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Hywood is just as guilty of faking it as is Mitchell. Sadly these people are the ones accelerating the troubles on our news media. Neither has a clue about digital media.
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“Why would Fairfax walk away from print? Over 75% of our revenues are print based. ”
Hywood desperately needs a reality check. Print? Seriously….
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Brilliantly crafted. Need more of that Mr Hywood, stick up for Fairfax. Lacking leadership since Linnell left
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Blistering note. Hywood and Catalano powerful combination.
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Great – and long overdue – put down of the increasingly shrill and quite ridiculous propaganda spewing forth from News Corp. However I doubt the fairfax metros are as “robust ” and profitable as Mr Hywood makes out . The Australian has ( reluctantly) come out and revealed the state of its balance sheet ( ie it has been losing circa $30m pa). If the Fairfax metros are as robust as Mr Hywood suggests, then he should have no
Problem doing the same….
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Linnell hasn’t left, he is messing around hyphening off heaters and holidays to pensioners until Hywood brings him back full time to run the publishing business.
Chris Mitchell is a protected species. If Lachlan doesn’t have the guts to move the business forward and remove geriatrics like him NEWS really is doomed. More advertorials spruiking the importance of extreme right wing odd balls.
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Good note. Too often Fairfax lets the bilious rubbish coming out of Holt St go unchallenged. But let’s get real about the state of Fairfax. The only part of the Fairfax business that’s growing is Domain . Hence ongoing and increasingly damaging cuts – most recently, almost the entire fairfax photographic team.
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@WHOH : Linnell has left ?
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Hywood’s problem is that he has been very deliberately accelerating the decline of print with a message to advertisers that says very simply: we are getting out of this business. He has created no business profitability in digital and has done nothing to effect change in the product, which is getting worse.
My impression is that he’s poison for the talent, which may be an even bigger problem. It is certainly noticeable that staff no longer make any distinction between news and fairfax, which is a huge cultural shift.
Of course Hywood’s best asset in this relativity is Mitchell, who should not speak in public.
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Linnell will be back. Hywood, Linnell, Catalano. Watch this space.
NEWS are hysterical. They are misguided and confused.
“As the quote in The Australian demonstrates, News Corp has only just started to understand and acknowledge the disruption caused to traditional news organisations. Necessary changes initiated by a previous CEO ground to a halt as the “old guard” saw him off.”
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@ Bloz: Linnell should be back “to run the publishing business” very soon then since latest ratings show he’s not exactly setting the world alight in radio land. It does beg the question, though: Who is running the publishing business now? And why do we never hear from him/her — only Linnell and Hywood.
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Mitchell – hysterical as he is – might have hit something on Fairfax digital subscribers. Fairfax are constantly discounting the packages – 50% off at the moment.
Argo – Hywood running publishing business the sales people tell me.
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Hywood’s watch has seen the Age and others start to disappear up their own orifices, he’s allowed his journo’s and editors to alienate their key target audience. I hear the organisation is dysfunctional, they are outsourcing their daily production in India or some third world country, which is tantamount to throwing in the towel and a really good message to send to the Australian public (Your Australian newspapers brought to you from India) Revenue is their problem, they’re not reaching the people advertisers want to reach or certainly not enough of them to count. Poorly run, current management can’t resurrect the company; they need new energy and new blood if they’re to survive, first to go, Hywood.
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Lol.
Loved the phone hacking dig. Poor News Corp and its “journalists”. No credibility left.
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Well done Greg Hywood. About time! News Corp want to get rid of all its competition and will do and say what it likes to get the job done.
Don’t stop now!
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Why on Earth would the head of a major media company waste his or her breath on something as trifling as a pointless tit-for-tat with a rival outlet?
Because staff morale is at an all-time low.
How the mighty have fallen.
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@ jamma: yes, Fairfax are dropping their pants on digital subscriptions, as you say. They got off to a great start on digital subscriptions, but the last audit figures showed that growth has slowed to a trickle (https://mumbrella.com.au/index.php?s=digital+subscriptions ). Presumably, as a result, their discounting of digital subscriptions is now much deeper than that of The Aus. Hardly the best way to build a loyal, quality audience. Having said that, it’s still good to see Fairfax wake up and fight back. For too long News Corpse have been able to come out with all sorts of propaganda re themselves and competitors without anyone challenging them.
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Love the Fairfax Sycophants responses
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^ Fairfax kills it in digital. They have more digital subscribers than all of the News Corp properties combined! And while the SMH is no.2 in news website rankings, the Australian and Daily Tele are not even in the top 10
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@argo. Good pick up on the digital subscriptions. Their growth has dived. Why the discounting?
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@ WANG: as opposed to the News Corpse sychophants, you mean?
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Mitchell appears to have played back the tape this morning.Hywood really did not lay a glove on him and looks now to be the sitting duck. I suppose they will give Allen Williams a go next.
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With credit to Fairfax, I do rate a large proportion of their editorial v News Corp’s, which, quite frankly, is about as credible as Bernie Madoff. Anyone who calls themselves a journalist (anyone), however works for News Corp is a fraud(.)
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Mr Hywood actually said very plainly that from 2012 he gave print 3 to 5 years and planned accordingly to be digital only at that time. All his moves are consistent with that.
Unfortunately his plan did not include digital profitability or any prospect of same. So now he is skating around the facts.
IMO it is highly unlikely that his claims of consistent profit are true. Notably in that one product Mitchell cares about – the AFR – which has been butchered.
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@ the Facts: Fairfax are certainly doing better than the other traditional publishers on digital, but I doubt their digital revenue comes close to replacing the revenue lost from print
@Facts are helpful: you’re almost certainly right re the AFR. Latest figures from Emma (the audit system endorsed by newspaper publishers) shows AFR’s print readership has dropped 22.9% in the last 10 months (!!), by far the biggest drop experienced by any newspaper. Goodness knows what their digital subscriptions are doing since they won’t release those figures. Obviously, not good.
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@Argo: It was just a feeling. But the absence of digital numbers tells me that the AFR is seriously in trouble. It is also a reflection of the poor product focus of Fairfax. Its board is clearly useless, but it is amazing that Hywood has done nothing about the Herald and The Age editorial and seems to have deliberately pushed the Fin into the Oz situation (both editorially and financially).
Amusing to read in the Oz that Corbett is on the skids. If only the whole board and management were on the same slope. Fairfax really desperately needs someone with editorial value.
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As a financial newspaper, The AFR “should” be the jewel amongst the Fairfax mastheads – a la the Wall St Journal, The Economist, the FT, all of which have built substantial businesses, including a healthy digital products/revenues. Instead, it appears to be sliding closer and closer to oblivion.
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Check out the Roy Morgan vs EMMA news readership figures, hot off the press.
http://www.bandt.com.au/media/.....readership
http://www.bandt.com.au/media/.....per-brands
Maybe this will shed some light on things
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Australia’s most read newspaper brand. SMH is Australia’s #1 newspaper brand reaching 5,653,000* people across print, website and app. * Roy Morgan Research average four week figures for the 12 months to March 2014
http://www.roymorgan.com/findi.....1406240527
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Website visits:
SMH:
http://www.similarweb.com/website/smh.com.au
The Age:
http://www.similarweb.com/website/theage.com.au
The Australian:
http://www.similarweb.com/webs.....ian.com.au
Daily Tele:
http://www.similarweb.com/webs.....aph.com.au
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