Greg Hywood: Fairfax spotted structural challenges early and as result has greater market cap than Seven, Nine and Ten combined
Fairfax Media CEO Greg Hywood has suggested the publisher had more vision than the TV commercial networks when it came to grappling with structural changes that threatened “their very existence”.
Greg Hywood: Fairfax Media’s market capitalisation is greater than the three free-to-air TV companies
In a comment piece welcoming the media reforms published in The Sydney Morning Herald, Hywood said: “Companies, such as Fairfax, that spotted the trends early and acted – reducing legacy costs and building new businesses like Domain – can not only survive, but thrive in the new world. Because Fairfax Media has taken the tough but necessary decisions to ensure its survival, its market capitalisation is greater than the three free-to-air TV companies – Seven, Nine and Ten – combined.”
Fairfax Media currently has a market capitalisation of $2.44bn, while Seven West Media’s market capitalisation is $1.12bn, Nine’s is $1.14bn and Ten’s is $79.67m.
Hywood argued the fact that the media reform package announced by the Turnbull Government was 10 years overdue demonstrates the “gulf” between policy makers and the media.
“Where media companies grapple with structural changes that threaten their very existence, our policy makers seem to have little sense of the changing world,” he said.
“The Fifield reform package simply acknowledges what everyone in the media has been fighting for years.”
Hywood argued the major points of the reform – abolishing broadcasting licence fees and repealing the two out of three and 75% audience reach – had their greatest relevance “five, even 10 years ago”.
“That was the time the industry should have been allowed a level playing field so it could prepare for the big global players,” he said.
“It is a much tougher world now. Google and Facebook hoover up the lion’s share of advertising in the Australian market, create no local content and pay little taxes. By futzing around with notions of “diversity” that were made irrelevant by the emergence of the internet in the 1990s, our policy makers across all parties have threatened the depth and breadth of local news, information and entertainment.”
Hywood also took aim at the New Zealand Commerce Commission for its decision to reject the proposed merger between Fairfax’s NZ assets and NZME, stating: “New Zealand, a generally well governed country, is still to read the memo, as demonstrated by the fresh decision of the New Zealand Commerce Commission to reject the merger of the country’s two major publishers, Fairfax NZ and NZME.”
He added: “Where at least the Turnbull government recognises the issues, the NZCC stands condemned as a regulator totally out of touch.
“By denying Fairfax and NZME the ability to take backend, non-content costs out of a merged business, it will force both companies into reviewing their editorial workforces and number of publications.”
Hywood concluded with a warning to policy makers to not fall behind again.
“But if our policy makers want strong local voices they need to stay tuned to the media and never again get caught so far behind the real world.”
Miranda Ward worked for Mumbrella from 2013 to 2017, eventually becoming deputy editor. Miranda joined Mumbrella in September 2013 from Sky News.
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You can see why no one in the media industry has any time for him.
It looks TPG has set up its deals for the media law breakup. In which case Seven might well be a buyer (that would put the TV network back where it was – in Fairfax – before the Fairfax family feud). Ten won’t, though News would love to have the AFR and would give up the Oz for it. Nine can’t do much at all other than pick up Stan or perhaps some radio.
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Hywood can’t spin the Domain float any longer. TPG has called his bluff and clearly knows that the news media and Domain have a symbiotic link. Let’s hope TPG instals real management.
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