Last week in Perth, Fairfax CEO David Kirk delivered a glowing speech to an audience of local luminaries in which he spruiked his company’s creation of “a dynamic program of diversification and growth” that makes it “as well positioned as any heritage publishing company in media worldwide”.
To put it in terms that non-journalist Kirk probably won’t understand, that speech was a giant beat-up. The real “dynamic program” now occurring at Fairfax is a plunging share price, stockbroker downgrades, a terrible financial outlook and increasing talk of the removal of the CEO who is responsible for positioning the heritage publishing company in the doldrums.
Last Friday was an awful day for Fairfax Media. Its shares hit an intra-day price of $2.92 — almost a ten-year low — and a major broker, Goldman Sachs JBWere, relegated Fairfax from “Hold” to a “Conviction SELL” and downgraded the 12-month share price target from $4.90 to $3.15.
This follows an earlier downgrade from Deutsche Bank, which two weeks ago cut its valuation from $4.35 to $3.50 because of the “structural shift” of advertising “out of print [which] is most evident in the large metro markets such as Sydney and Melbourne, which are key markets for Fairfax.”
The key question now at Fairfax has nothing to do with Kirk’s waffle. The key question is whether the company’s biggest shareholder, John B Fairfax, will continue to stand on the sidelines as he watches the value of his investment collapse under the hand of a novice CEO and board who (apart from John B) have no media background or instincts.
The likely answer to that question will come very soon when John B replaces Ron Walker as chairman, and deputy CEO Brian McCartney is handed the CEO chalice.
One senses that David Kirk is about to exchange his “dynamic program of diversification and growth” for a stint of “spending more time with my family”.
Victor, I like your style. 🙂 🙂 🙂
Where would Australia be without Fairfax? A print media controlled by Rupert Murdoch, a fate worse than death. It’s in all our interests that Fairfax prospers and continues to provide a sane alternative to the commercial greed, megalomania and just plain anti Australian attitude of the Murdoch press.
When John Della Bosca ,on his bike ride ,told a photographer to “get a real f***ing job” the petal of a snapper should have taken it as wise advice instead of running back to his editor to report the words. The way Fairfax is slashing it’s decades of investment in solid reporters and photographers is beginning to really downgrade their product to it’s rivals’s levels. The Sun Herald is now completely tragic and the SMH is begging to compete with the Telegraph in content and style, apart from a few notable writers. ( and how long will they last ?). The “rivers of gold” in advertising could dry up pretty quickly if they continue to be a content lite publication that delivers a swag of glossy brochures as well -the kind wthat annoyingly get stuck in our letter boxes everyday. I mean who wants to actually pay to have them delivered ?. This is what happens when real newspaper men don’t run the show. But is James B.Fairfax really the right man at the top ?. Although he has publishing in his blood , it isn’t the adventruous type- Rural Press are just printers in the end and his investment in Courier Newspapers isn’t exactly backing a company known for it’s journalism-just more advertising. He certainly should move quickly though as a major shareholder to put someone at the helm who knows about newsapers. It will be his and our loss in the end if he doesn’t-and quickly.
Venise, you right. Whoever becomes CEO of Fairfax should be from Melbourne. He should have done a stint at The Age (preferably when Graham Perkin was there). For some commercial killer instinct he should have worked for Rupert. He should have at some time risked his own money in the real world and made it big time. He needs to beyond reproach and be respected by his peers as a giant. Crikey! Venise, you and I have just described Eric Beecher!
Not only time for Ron Walker to go but also David Kirk and Jack Matthews
Fairfax had the inside running in online opportunuties in real estate and everything else and have completely botched the whole thing.
Real estate for instance – Fairfax had real estate in print tied up nationally, they should be streets ahead but fail dismally and have allowed realestate.com.au to surge ahead making fools of themeselves and Simon Baker CEO of realestate.com.au a multi millionaire in the process, I bet he cant believe his luck.
The Fairfax web sites are full or errors and just dont work in many instances it’s pathetic, whats more their print business runs in direct competition to their online so they dont help each other.