It’s been a hard few years for the nation’s journalists, whose newsrooms have been cut to the bone through round after round of redundancies.
So if nothing else, the Fairfax-Nine merger offers the chance for a bit of schadenfreude, as the boards that have overseen such dramatic downsizing, particularly at Fairfax, get targeted for cost cuts themselves.
The precise details about who will sit on the merged company’s board are at least three months away. But, on current announcements, the plan is for CEO Hugh Marks to join a seven-person board, with three directors apiece from Nine and Fairfax, one being current Nine chairman and former federal treasurer Peter Costello.
The scale of the new business boggles the imagination. It’ll span mass-market television from Nine, high-brow print assets from Fairfax, populist radio stations in Macquarie Radio, a separate classifieds business in Domain, a separate subscription streaming service in Stan, a separate soon-to-launch business television JV airing on Foxtel (in partnership with News Corp!), numerous digital add-ons (from both the Fairfax and Nine sides), and rural newspaper and Kiwi assets (for now). Which is a lot for any seven directors to stay on top of.
One man whose executive career has spanned an unusual number of the assets in the new company is current Fairfax chairman Nick Falloon, who early chatter has suggested might come to replace Costello as chairman in time. He’s the executive chairman of Domain, and he’s got oodles of TV experience form his time as chief executive officer of PBL and Ten Network Holdings.
If we consider Marks, Costello, and Falloon as certain, only four spots for 11 potential directors remain. How’s that for a redundancy round!
Currently sitting on Nine’s board is former CEO and TV guru David Gyngell, whose expertise is surely valued. There’s a soon-to-be former CEO on Fairfax’s board as well in Greg Hywood, who quipped last week he was for once announcing his own redundancy. But does that include from the board? After all, who better to advise Nine on how to deal with all those pesky journalists? And he’s certainly got the most print media experience of any director at either company.
If Gyngell or Hywood do stick around, along with their chairs, only one spot remains for Nine and Fairfax.
Surely you’d want a woman or two. And there are five to pick from. From Fairfax, that means veteran NED (and Fairfax’s longest-serving director) Linda Nicholls or McKinsey grad and digital media exec Mickie Rosen. Nine offers a three more options, between marketing exec Janette Kendall, accounting and finance expert Samantha Lewis or lawyer Catherine West.
But let’s not forget the other men. Do you want to lose the T-shirted ad exec Todd Sampson, corporate banker (and Domain director) Patrick Allaway, accountant James Miller or even Hungry Jack Cowin? Cowin is an interesting one because upon his appointment six years ago, then-major shareholder Gina Rinehart was after a board seat or two, and he was widely depicted as her representative. But that was never the case. Either way, at best a majority of these names (based on a simple headcount) will soon depart.
Both companies have fairly fresh boards, which makes it hard to rule many out of the running. One thing’s for sure though, and that’s that turning 14 directors into seven will save a lot of board fees. Both Fairfax and Nine pay their non-executive directors a base rate of $135,000, so paying seven fewer will save nearly a million when you add in the payments for belonging to board committees. Both companies pay their chairman around $350,000 a year, so you can add that amount for a total board wage reduction of $1.3 million. Unless they decide to give themselves pay rises based on the growing complexity of the business. The fact that they can do this is really where our newsroom cost-cutting analogy ends …