What's New July 25, 2013

Killing Fairfax

"Killing Fairfax', a new book by journalist Pamela Williams, has been released this week.

The key focus of the book is the failure of Fairfax to recognise the threat of online to their newspaper business, however it also provides a fascinating insight into the buying, selling and sharing of online, newspaper, television and radio assets.

The book outlines the acquisition of the Southern Cross Radio network by Fairfax, and the intent of the then CEO of Fairfax, David Kirk, to merge the newly acquired network with the Macquarie Radio Network.

The story is told below from the book;

The second and crucial stage of (David) Kirk’s plans to diversify earnings from radio on the back of the Southern Cross investment fell victim to a dispute in the boardroom.

On 20 February 2008, Kirk took to the board a proposal to merge Southern Cross with the entrepreneur John Singleton’s Macquarie Radio Network.

He faced open revolt from JB (John Brehmer Fairfax) and Nicholas Fairfax. Kirk’s objective was for the company to establish a monopoly position in Sydney by merging the two commercial talk stations in the city on the back of the powerful talkback hosts in Macquarie’s pay, including the controversial and top-rating Alan Jones.

Already Fairfax had a monopoly in Melbourne, Perth and Brisbane. A merger would create a powerhouse Sydney talkback presence and a national network that advertisers could not ignore.

Kirk’s financial modeling indicated that Fairfax could substantially improve earnings from its radio investments from around $30 million a year to more than $60 million a year with this expansion.

It was the deal Kirk needed but he was overruled by the board for the first time, with JB and Nicholas leading the revolt, They argued that the Southern Cross business had just been bought and needed to settle in.

There was a political aspect to the resistance in the boardroom too. JB and other directors expressed their personal reluctance for buying a business with Alan Jones on the payroll.

JB recalled later: “I said it was ridiculous and we shouldn’t go anywhere near metropolitan radio, and all the trouble that brings with the big name prima donnas. They’d paid a lot for Rural Press and they had paid a lot for Southern Cross.”

'Killing Fairfax' is on sale this week.