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Labour rights
Publishing

Less than nothing: on Fairfax and the future

Last week’s announcement that Fairfax newsrooms are to suffer cuts of ‘the equivalent of 120 full-time employees’ is terrible news not only for those Fairfax journalists and other newsroom staff who will be made redundant and have to struggle to find work in a shrinking and intensely competitive pool of job opportunities. It’s also bad news for the survivors of the cull, who will face the unenviable prospect of producing news with fewer colleagues, making a traditionally high-pressure job even more stressful. And it’s very unwelcome news for the general public. Holding politicians accountable and uncovering information that the powerful would like to keep hidden requires investigative journalism backed by editors with the staff and resources for those stories. A journalist lost from the newsroom is not just one fewer pair of hands of deck: it’s also the loss of a wealth of local knowledge and contacts acquired over a long period of time. David Simon, creator of the celebrated TV show The Wire, describes the effect of staff cuts on the newspaper where he used to work as a journalist:

Amid buyout after buyout, the Baltimore Sun conceded much of its institutional memory, its beat structure, its ability to penetrate municipal institutions and report qualitatively on substantive issues in a way that explains not just the symptomatic problems of the city, but the root causes of those problems.…But absent that kind of reporting, we will all soon enough live in cities and towns where politicians and bureaucrats gambol freely without worry, where it is never a risk to shine shit and call it gold.

But while the news is bad, it’s not much of a surprise, sadly. The upcoming cuts are just the latest round in a depressingly long series of Fairfax manoeuvres to reduce staffing costs. In 2011, soon after Greg Hywood’s appointment as CEO and managing director of Fairfax, he announced a massive outsourcing of sub-editing; at the time, the bitter pill was sweetened by a promise of investment and recruitment in journalism. A year later, though, the same man declared that nearly two thousand staff would be losing their jobs, including many journalists. These latest cuts are not an isolated incident but part of an ongoing and bitter struggle between cost-cutting management and journalists’ defence of their jobs and those of their workmates.

What’s responsible for this downward spiral? The top management of Fairfax haven’t exactly covered themselves in glory. Disastrous purchases of declining media (Rural Press, SBC radio stations) were compounded by selling off assets at a loss, and – perhaps most ruinous of all – passing up chances to buy or invest early in digital startups, most notably Seek.com.au, the jobs website that was first listed at one-eighth of the value of Fairfax, but has since soared to more than double Fairfax’s own shrunken valuation.

This litany of incompetence, however, is only part of the story. The news industry as a whole is facing unprecedented pressure; Fairfax’s larger rival News Corporation has also been making significant cuts to its own workforce. Before the internet, newspapers’ only competitors for advertising were TV and radio. When it came to classifieds, they were the only game in town. Now, readers have a much wider range of choices. This reduces the income from newspaper sales, because readers are less likely to buy a newspaper in print, and don’t expect to have to spend money to read news online. Paywalls are not just ineffectual, but actually contribute to the much more serious decline in revenue from advertising, reducing the number of readers just as – with the proliferation of online media – the amount that can be charged for advertising either in a newspaper or its online version has plummeted. Gumtree and Ebay dominate the market for classified advertising, removing what used to be a steady and guaranteed source of income for newspapers.

Digital media, then, have eroded the financial base that once made newspapers possible. It’s not just that digital media operate at a fraction of the publishing costs of newspapers, or the transition from inherent scarcity of printed newspapers to the infinite reproducibility of digital media. The other big problem for newspapers is that services that were once bundled together no longer need to be sold in a single monolithic unit. Many kinds of readers used to have to buy newspapers, whether their primary purpose was to read the news, review sporting league tables, check their horoscope, buy a house, or find a job.

The bundling of these services in a single package meant that unprofitable activities, like journalism, could be subsidised by profitable ones, like facilitating the sale of second-hand cars. People expected a newspaper to provide all these services, and so long as the newspapers remained profitable, their owners tolerated the delivery of social goods such as investigative journalism and informed scrutiny of state and corporate propaganda – albeit diluted by cultural bias and pressure from paymasters. But there was nothing natural or inevitable about this compromise. The notion that people used to be willing to pay for news, and now are not, is an oversimplification. The success of Seek, and the decline of Fairfax, shows what happens when these services can be ‘unbundled’, to use the ugly neologism. With the upset of the delicate balance of technological and economic forces that have sustained the newspaper for so long, its viability as a product has become increasingly uncertain. The means of production used to be printing press; now it’s the giant server farm. Google famously promises to ‘organise the world’s information’ – not to produce it.

The blunders mentioned above notwithstanding, Fairfax has attempted to adjust to the brave digital new world by attempting to reconstruct the old patterns of subsidy in the digital world. Its most profitable product is the real estate website Domain, which in financial terms is worth more than the rest of Fairfax put together. Theoretically, the revenue from Domain could continue to prop up Fairfax journalism so long as people continue to buy and sell houses. But this arrangement is coming under pressure from investors, who look askance on any business decision made on grounds other than the maximisation of profit:

Pressure is mounting on Fairfax Media to spin off its high-flying Domain Group property business to unlock value that is not being reflected in its share price due to concerns about the company’s core publishing division.… “As time goes on, if the ­market isn’t reflecting the underlying value of the Domain business they’ll be forced to look at other options to realise the underlying or the true value of the business,” said Matthew Haupt, portfolio manager at Wilson Asset Management, which holds Fairfax shares. “If it was a standalone business it would get re-rated but it’s inside a portfolio that is not ­reflecting the true value.” …One impediment to a spin-off would be the potential valuation placed on the rest of Fairfax, which is effectively being valued at zero by the market.

So even though Domain is highly profitable, allowing Fairfax to approximate a virtual version of newspapers’ bundling of services, ‘the market’ (i.e. the collective opinions and interests of capital and its agents, like Matthew Haupt) isn’t happy with this state of affairs, punishing Fairfax for its attempt to continue its traditional subsidy of journalism into the digital era by depressing its share price – and this is even after many rounds of job cuts. ‘The market’ does not even seem to consider the value of journalism to be zero, but less than nothing, a pointless liability that is saddling risk onto activities it considers more meaningful, such as facilitating real estate deals. After the latest announcement of newsroom jobs, the market purred its approval by rewarding Fairfax with a 4.8% boost to its share price.

So capitalism knows the price of everything and the value of nothing, in Oscar Wilde’s phrase. We knew that already. The question is, what can be done?

Despite the high stakes, the way forward is unclear, and the forces arrayed against journalists formidable. The MEAA are fully justified to ‘fight for every job’ in a workplace that has already been massively reduced, and to call attention to the irrationality of the proposed cuts:

Constantly cutting away swathes of the very people who create the journalism that is the reason your audience buys your product makes no sense.

Capital, though, as we have seen demonstrated many times, most recently and spectacularly in the global financial crisis, is not interested in making sense. It’s profoundly irrational. The only way to defend oneself against its depredations is to speak its language, to hit investors where it hurts: in their pockets. By all means, sign the MEAA’s petition, but don’t expect it to have much effect.

At bare minimum, readers should support strikes like the one that ended today by refusing to read any Fairfax publication or to use any of their services while a strike is taking place. (Fairfax has retaliated against the ‘unlawful’ strike by docking pay.) But it’s sadly far from certain that strike action will be ultimately effective. The state of the job market gives journalists and the unions that represent them little room for manoeuvre.

Now, a mea culpa. I work for Fairfax, as a software engineer. Last Thursday, when I learned about the cuts and the walkout, it did not even occur to me to join the journalists on strike. (I did resign my position, but that was mere coincidence: I had found a better job elsewhere.) We techs, or most of us, work in a separate building to the newsroom, and I don’t personally know any of the journalists at the Sydney Morning Herald. I didn’t even see the protest outside the main Fairfax building.

I mention this not in an attempt to reduce the situation to a question of personal morality or to berate myself: one software developer’s absence would hardly have made management quake in their boots. What seems perverse is the total lack of unionisation or any kind of collective workplace action by software developers, despite our frequently poor working conditions. Although developers’ pay is relatively high due to a skills shortage, unpaid overtime is so so common that employers advertising jobs in the software industry tout ‘a good work-life balance’ as if they’re doing us a favour by letting us leave our desks at the end of the day. The reasons for this situation are complex, and tangential to this post, but it seems to me that until this relatively new kind of intellectual labour organises, the media industry will continue to become a worse and worse place to work. And not just the media industry: automation is predicted to replace more and more types of work in the future. Opinion is divided as to whether technological advancement offers a chance for a post-work liberation of society, or if this is an apolitical, techno-utopian delusion.

That’s too big a question for this post, but if history has taught us anything, it’s that workers’ rights are not handed down from on high, and nor do they spring naturally out of technological developments. They must be won through organising. Ultimately, it may be the case that the contradictions between profit-making and journalism are unsustainable. In Sweden, newspapers have been protected to some degree by public subsidy; it seems unlikely that Australia’s laissez-faire political environment would support any such move. The future of news media may be co-operative organisations. New media co-ops like the Bristol Cable are a hopeful sign in a bleak media landscape. But one need not consider cooperatives and unions as opposing options; they are different strategies for workplace organisation. In the short term, the urgent need for both workers in the media industry and the citizens and democratic processes that depend on them is for solidarity and organisation, not just within journalism but in the new technical fields that have arisen in digital media. It’s crucial that such organisation not remain narrowly focussed on within each trade, but join in a common fight for a sustainable media future.

 

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Overland is a not-for-profit magazine with a proud history of supporting writers, and publishing ideas and voices often excluded from other places.

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Joshua Mostafa is a writer and critic living in the Blue Mountains.

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Comments

  1. Are any of these job losses the direct result of automation of journalism? An example of this is AP’s automation of journalism that seems to bee an accelerating trend.

  2. If these job losses force Fairfax to restrict its endeavours to the straight reporting of hard news, then so much the better. The SMH in particular has worshipped at the altar of clickbait and committed the sin of flattering the pretensions of its target demographic. Sum result? Decline and damnation.

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