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The cost of maintaining the real wages of the top quarter of their journalists, who are currently not being offered any pay rise, is currently less than half what Fairfax CEO David Kirk pays himself (and less than what the chief financial officer, Sankar Narayan, pays himself).
But Fairfax management’s “plan” for the future is nothing more than a means of stripping value out of one of this country’s oldest and proudest media groups.
David Kirk, Brian McCarthy and their moneyed mates have a plan for the future all right. Only it’s their future they are thinking about.
 The cost of going to 5% for all their staff (they are currently
offering between 4% and 4.5%) is less than the pay rise the top 7
executives got in the 2006-07 financial year – based on reasonable
assumptions drawn from the Fairfax and Rural Press annual reports.
Fairfax
has offered a pay rise below inflation. The cost of paying inflation
for 1300 journalists is less than the pay rise the top 7 executives got
in the last set of financial data that was available.
As at 1
July 2007, the Prime Minister of Australia was paid $330,300. David
Kirk thinks he is worth 8 prime ministers. Lloyd Whish-Wilson gets two
and a half prime ministers.
The total Cabinet wages bill for
this year was $4,579,737. Compare that with what the top two executives
at Fairfax pay themselves: $4,533,072.
The top two executives at
Fairfax combined are paid about as much as all the Cabinet Ministers of
the Commonwealth of Australia, including the Prime Minister.
The top seven executives at Fairfax earn more than the entire Commonwealth ministry of 30 people.
Check out the annual report. Here’s what the top seven paid themselves over the past couple of years:
Let’s not forget the board – they paid themselves more than $4 million as well. That’s a tidy little earner for a part-time job.
Chairman: Ron Walker $336,000
Deputy Chairman: Mark Burrows $180,000
Other Non-Executive Director $120,000
Meanwhile, here’s what has happened to Fairfax’s share price over the past few years:
Talk about fiddling while Fairfax burns!
Here’s
what renowned business strategist, Michael E Porter of Harvard Business
School has to say about the business strategy that appears to have been
adopted by Fairfax executives:
Owners and managers must be long-term builders, not
so-called ''market harvesters'' who focus almost exclusively on
short-term profits. They must relentlessly set their sights on the
leading company in their industry and do whatever is necessary to be
better.
Here’s what Philip Meyer, Knight Professor of Journalism and
author of The Vanishing Newspaper has to say about the economics of
quality journalism:
A newspaper produces two kinds of influence: societal
influence, which is not for sale, and commercial influence, which is
for sale. The quality of the societal influence enhances the value of
the commercial influence. An advertising message is worth more if it
appears in an environment of credibility and respect. The appeal of
this concept is that it provides economic justification for
journalistic quality. If it's valid, then newspapers that sacrifice
quality to prop up the bottom line are undermining their business model.
In other words, its not just advertising revenues that matter,
the value of advertising in the SMH, Age, Canberra Times, the AFR and
all Fairfax’s other superb mastheads is enhanced by the fact that
advertisers know they are getting more bang for their buck. A quality
environment means enhanced revenue and a better bottom line all round.
But
that takes guts. It takes vision. And those are in short supply in the
top echelons of Fairfax these days. Instead of investing in the
honoured Fairfax brand values of quality, accuracy, flair and honest
service to their community, the Fairfax board and its executives are
preparing to rip as much value out of the company before it becomes
unviable.
Instead of aiming to attract market share by being the
best, instead of capitalising on its talented staff of award-winning
journalists to produce a product that will win, rather than lose,
readers, Kirk and his cronies are “market harvesters” who are preparing
to ruthlessly trash brand values which have endured for nearly 180
years.
Fairfax has filled six pages of its latest annual report
with details of awards and honours won by its hard-working and talented
journalists. The journalists who contributed to making The Age the
PANPA newspaper of the year; skilful and dedicated reporters and
editors who have filled Fairfax’s trophy cabinets with Walkley Awards
and Quills over the past 12 months.
For months, management has
been stonewalling over a new collective agreement that would recognise
the hard work that staff has put in to make the group’s newspapers
among the best in the world.
And now David Kirk wants to sack
120 journalists in the name of efficiency and productivity. Which shows
that contempt for journalism, disdain for journalists and galloping
short-termism have taken over at Fairfax.
It’s a sad day for Fairfax and a sad day for Australian journalism.
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