Fairfax Media CEO Greg Hywood ‘won’t be dissuaded from making the right decisions’ by strike action
Fairfax Media CEO Greg Hywood has said the job cuts announced yesterday are part of “completely resetting existing models” which is needed to address structural challenges the company is facing.
Greg Hywood: Quality journalism will remain at the core of our future sustainable model
Speaking at this morning’s Macquarie Australia Conference just one day after the company – which publishes The Sydney Morning Herald, The Age and The Australian Financial Review – announced 125 editorial jobs are to be axed as part of a $30m restructure, Hywood acknowledged it was a “tough decision”.
“Our three publishing businesses have made considerable progress in transforming to more sustainable models,” Hywood said.
“Clearly we have made some tough decisions to make our publishing division sustainable. We don’t back away from it – and are glad that we started getting it in order five years before most other media companies began to face the global and local industry realities.”
Hywood’s speech came as Fairfax Media journalists strike against yesterday’s job cuts announcements, with journalists picketing his arrival at today’s conference.
Fairfax staff preparing to walk out yesterday
Hywood said: “We respect our staff for the passion they have for independent, high quality journalism. We share it – but we know what it takes to make our kind of journalism sustainable. Passion alone won’t cut it.
“This is the not the first time we have had industrial opposition to what we are doing – we won’t be dissuaded from making the right decisions – and we will get our digital and print editions out through this period.
“It is self-evident that publishing was facing structural challenges and these could only be addressed by completely resetting existing models.”
Hywood said the company has reduced publishing costs by more than a net $400m over the past five years.
“Publishing cash flows have been invested in creating new growth businesses, as well as substantially de-risking the transition to digitally-driven futures.”
Hywood revealed The SMH, The Age and The Australian Financial Review “have more than 226,000 digital subscribers”, with each title delivering growth.
Referencing the speech Hywood made at the same conference last year when he said it was “inevitable” the company would close its weekday metro print editions, Hywood said the print newspapers will continue to be printed daily.
“We are re-building the technology, processes and teams supporting publishing – all at a fraction of the cost of maintaining our legacy systems,” he said.
“This allows us to fundamentally reset the publishing cost base and reposition our product suite to deliver better commercial and customer outcomes.
“The result will be a cheaper and higher quality digital publishing model, still with the core of quality journalism that we are committed to. Our print newspapers will operate separately and we believe we will continue to provide a positive cash-flow contribution for some years yet.
“Having considered all options, we determined that the best commercial decision, based on current advertising and subscription trends, was to continue to print our publications daily, while developing significantly enhanced digital propositions.”
Hywood said in FY18 the industry will see “some of the major milestones” in the company’s publishing innovation with a “new product pilot in a smaller market”.
“This will be followed by the launch of new platforms for the SMH, The Age, The Australian Financial Review and Lifestyle mastheads, along with new apps for the SMH and The Age.”
Hywood’s comments came as the company posted a trading update to the ASX which revealed Group revenues for continuing businesses are 6% below last year for the first 17 weeks of FY17 H2.
Domain’s overall revenue is up 10% while Metro Media is down 11%.
Miranda Ward worked for Mumbrella from 2013 to 2017, eventually becoming deputy editor. Miranda joined Mumbrella in September 2013 from Sky News.
Linkedin
Why did Hywood choose this timing? It is truly Orwellian. in the age of spinner doublespeak and alternative facts, he is a “facts out” manager of Fairfax.
User ID not verified.
“Clearly we have made some tough decisions to make our publishing division sustainable”. Yes, Greg, very tough for the hundreds of people who have lost their jobs as part of your never-ending cost cutting and “transformation strategy”. Not at all tough for you, who continues to take home an exorbitant remuneration package, recently increased to $2.7m pa, even as you were announcing yet more job cuts. Everyone understands the need to cut costs across the business — but seems apparent that you and the executive ranks of Fairfax are quarantined from these “tough decisions”.
User ID not verified.
“Hywood said in FY18 the industry will see “some of the major milestones” in the company’s publishing innovation with a “new product pilot in a smaller market”.
“This will be followed by the launch of new platforms for the SMH, The Age, The Australian Financial Review and Lifestyle mastheads, along with new apps for the SMH and The Age.”
Sounds as believable as all those new revenue streams Hywood was spruiking to the market for a couple of years, all of which have come to nothing — some incoherent plans around data, marketing services for Small Business, Events. Let’s hope all these shiny new products have a shiny new revenue model attached to them. Without a viable commercial strategy, all the new products in the world are not going to make any difference. Time will tell.
User ID not verified.
Here’s the thing. Hywood has said quite a few times that he’s making tough decision to “make the business sustainable”. Every time he says it the business looks, over all, less sustainable. Yet his pay goes up!
People might note that the people who oversaw his pay and performance are people like these (Fairfax directors):
1. Roger Corbett: made Woolworths hugely profitable by gouging its near monopoly: everyone who has followed hates his guts
2. Linda Nicholls: Mother knows best gal who put the man in place at Australia Post on the most embarrassing pay deal in Australia history
3. Todd Sampson: nice guy who does nice stuff.
4. Sandra McPhee: rose without trace
5. Peter Young: a huge investment banking talent who sadly left the board in 2016 after a decade of brilliant interventiuons.
6. David Gonski: Mr Rubic’s Cube. Google any Fairfax director’s name and the answer is: Gonski!
User ID not verified.
Don’t forget, Chief officer Greg Hywood got a $2.5m bonus this year, which is the equivalent of 16 full-time journalists informing the public.
Value for money?
User ID not verified.
well what is dissuading Mr. Hywood from making the right decisions?
User ID not verified.
I’d say it has a lot to do with the fact that his rem and bonus are tied to some massive cost reduction targets (just as long as those cost reductions don’t apply to his own salary)
User ID not verified.