Former Fairfax CEO: Gina Rinehart is the ‘logical owner’ of Fairfax

Screen Shot 2014-09-11 at 10.28.35 amThe former CEO of Fairfax Media Fred Hilmer has said he believes the business case for print newspapers is “terminal” and argued that mining magnate and major Fairfax shareholder Gina Rinehart is the “logical owner” of the publisher.

“There is a disadvantage you have when you are an incumbent”, Hilmer told a forum at the University of New South Wales. Referencing the struggles of other companies like Kodak to transition to the digital age he added: “With the wisdom of hindsight the best way out is to sell your business.

“Media businesses are more valuable to people who really want to own them almost for vanity or influence. The logical owner of Fairfax is Gina Rinehart.”

Hilmer, who headed the publisher from 1998 to 2005, made the remarks at an event on Monday night where he was interviewed by managing director of the ABC Mark Scott.

In the interview Hilmer spoke about his experience in print newspapers and argued that in the face of double digit declines in circulation that traditional newspapers had been challenged globally by the internet.

“I don’t think any of the newspapers around the world appreciated what (the internet) would do and when it happened it was too late,” he said. “It almost doesn’t matter where you look.”

Hilmer referenced a visit he made to the Washington Post and meetings with he had in the 90s with their owners Donald and Katharine Graham but noted: “A few months ago they gave in and sold to Jeff Bezos at Amazon. It was no longer a business they could fix.

“No matter how much ink you had in your veins it was pushing boulders up a big hill and I think the business is terminal – in its traditional form.”

Asked by Scott if he believed there would come a time when there were no printed newspapers in Sydney Hilmer responded: “Yeah, I do”.

Hilmer also asked Scott, himself a former senior Fairfax executive, what he thought the future would be for print with the ABC boss telling the forum: “It has constantly been underestimated but I have an active expectation that the daily newspaper will be threatened.”

“There are two steps really,” said Scott. “One is monopoly newspapers – there are still two newspapers being published – there will be one which will survive longer but then I suspect a weekly paper of a Saturday paper will be the most likely outcome.”

Hilmer also spoke about the intense competition from rivals News Corp arguing it actually forced Fairfax to look outside itself for solutions to the challenges of the business model.

“I think it actually energised the company and it made the company better than it would have been because the company was so preoccupied with itself,” said Hilmer. “Having an outside competitor at least got people thinking about what they should be thinking about – what are we doing that people will pay for, that they are not now paying for.”

Speculation that Rinehart might seek to buy the media company has been rife since the billionaire took a 14 per cent stake in Fairfax back in 2012.

Nic Christensen 


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