While Rupert Murdoch was introducing Donald Trump during a dinner with Australian Prime Minister Malcolm Turnbull in New York on May 4, Australians were waking up to a clunker of a headline in The Sydney Morning Herald.
Friday morning marked day three of a seven-day strike by journalists at Fairfax Media, the biggest rival to Murdoch’s News Corp Australia. Fairfax employees had learned earlier in the week that staff across prominent print titles including The Sydney Morning Herald, The Age, and The Australian Financial Review would be cut by almost a quarter (125 people) to achieve savings of $22 million.
In response, more than 500 Fairfax staff, including journalists in regional newsrooms, voted to walk off the job for a week, leaving the metro mastheads to be run by skeleton crews. The action means strikers won’t report on the Turnbull government’s federal budget that will be handed down on Tuesday.
— Kate McClymont (@Kate_McClymont) May 5, 2017
The decision to undertake an illegal strike (the journalists’ current contract does not allow for strikes except in limited circumstances) for such a lengthy period during one of the biggest political news events of the year is an unusual move in a media environment where newspapers around the world have been beset by layoffs. It speaks to the frustration felt by Fairfax staffers, who have been on the receiving end of cuts for several years.
Fairfax Media has suffered the same financial woes media businesses across the globe are facing, including declining advertising revenue and declining circulation. Yet staff accuse company leaders of making matters worse by mismanaging its transition to become a viable digital business by focusing on shareholder returns, rather than strategic planning for holistic growth. “You can’t cut your way to prosperity,” says Paul Murphy, CEO of Sydney-based media union Media Entertainment and Arts Alliance. “Good quality journalism needs to be journalism at scale. It’s increasingly hard for us to see, and I think for Fairfax subscribers to see, how that’s going to continue with these cuts.”
In response to the strike, a Fairfax Media spokesperson said in a statement, “We are disappointed in the decision by some of our masthead journalists to take unprotected industrial action for seven days after a month-long consultation period about necessary changes in our Metro Media business. But it is not the first time we have had industrial action. As in the previous episodes, we will continue to publish across print and digital as usual.”
— Michael Lallo (@Michael_Lallo) May 3, 2017
In a conference presentation on Thursday, Fairfax CEO Greg Hywood said Fairfax had reduced publishing costs by $295 million over the past five years, and that its publishing arm remained profitable. Over that timeframe, Fairfax has cut its metropolitan masthead staff by about half. Under the Fairfax Transformation Incentive Plan, executives are rewarded for reducing costs, among other performance indicators. Last year, Hywood’s incentive bonus scheme reportedly increased in value by $1.8 million.
In a statement published on the MEAA website, staff rejected the proposed cuts. They said they would only accept voluntary redundancies, stating that people who didn’t agree to leave should not be forced out. They also asked management to give staff three weeks to make a decision about whether to accept a retrenchment package rather than the one week the company proposed, and requested that senior management take a 25 percent pay cut.
One point of contention for staff is the decision by management to spin off its lucrative real estate classified advertising and publishing arm, Domain, the country’s second largest real estate website, into a separate entity, estimated to be worth $1.5 billion. A move Murphy says amounts to Fairfax cutting off its nose to spite its face. Marcus Strom, The Sydney Morning Herald’s science editor and a union spokesman, says, “[Domain] comes straight out of our newsroom. Our bosses will say to us, ‘Things have been so difficult lately that if it wasn’t for Domain, we wouldn’t be here.’ That may be true, but the counter is also true: that if it wasn’t for us, Domain wouldn’t be there. Domain leverages its association with high quality, independent journalism.”
— david rowe (@roweafr) May 3, 2017
On Friday, Texas-based private equity firm TPG made an unsolicited proposal to buy Domain and the three metro mastheads for $1.6 billion. A successful bid requires approval from the Foreign Investment Review Board, which makes recommendations to the Australian government on proposals by foreign investors. Fairfax is reviewing the proposal, which has been described in financial media as a low-ball bid.
Fairfax staffers have received statements of solidarity for the strike from freelance journalists, who have refused to file to Fairfax during the action. Newsrooms across the country have also sent statements of support, including the News Corp union, who described the cuts as disgraceful and said they “would damage the interests of the Australian public by dramatically reducing the number of journalists scrutinising matters of importance.” (News Corp Australia also announced major layoffs last month.)
My GW column appears tomorrow as filed weeks ago, but I'm not submitting while the strike's on. Freelancers, pitch elsewhere. #FairGoFairfax
— Benjamin Law (@mrbenjaminlaw) May 4, 2017
Margaret Simons, a media commentator and director of the Centre for Advancing Journalism at Melbourne University, says that while the strike is unlikely to have the desired effect on management, it has drawn attention to the fact that journalism is in crisis. “That’s not news, but I think people are now beginning to realize and to talk about it, whereas up until now it’s really only been journalists who were sounding the alarm bells,” she says.
The Australian media landscape has diversified in recent years, most notably with the influx of foreign digital outlets like The Guardian, BuzzFeed, Mashable, HuffPost, and The New York Times. But these are small newsrooms lacking the scale to cover state and local issues. Fewer journalists necessarily equals less media diversity. “The gaps that have emerged so far have been not so much in national politics or investigative journalism, but in reporting the affairs of the state and the nation,” says Simons. “Things like state parliamentary reporting, state court reporting, local businesses, that sort of thing.”
With Fairfax predicted to wind down its print operations in the near future—“It will happen at some point,” says Simons—some took to Twitter to raise concerns about prospects for the ideological diversity of newspapers in Australia’s capital cities. Miki Perkins, a social affairs reporter and union spokesperson for The Age, says of the strike, “We want [management] to understand that the more they cut the quality of journalism in their mastheads, the more they diminish their product, they diminish the trust of readers, and the community at large, they diminish journalism in Australia.”
— Esther Han (@EstherHjHan) May 3, 2017