Ice Cream, Politics & Gossip Girl: Would It Really Matter if Gina Bought Fairfax?

“Gina Rinehart is evil and we must do everything we can to stop her from ruining Fairfax”.

This was the most common response from those on the progressive side of politics in Australia to news that Rinehart, a mining magnate and Australia’s richest woman, had bought almost 19% of the media company that publishes metropolitan daily’s The Age and The Sydney Morning Herald as well as the Australian Financial Review.

Despite starting life as newspapers produced for, and consumed by, the wealthy city elite, both The Age and The Sydney Morning Herald are considered “lefty papers”. While it’s true that journalists working at Fairfax tend to believe in radical, communistic ideas like the scientific consensus on climate change, the paper’s perceived political positioning is largely due to the contrast with its competition – the News Ltd owned The Australia, The Daily Telegraph and The Herald-Sun, rather than any actual left-wing tilt.

Due to the willingness of Fairfax papers to accurately report on issues of science, such as climate change, and to (relatively) rationally analyse questions of economics, rather than repeating verbatim talking points from the Liberal Party and the business sector, many pundits were shocked and angered by Rinehart’s decision to buy almost a fifth of the shares in Fairfax.

It was largely assumed that Rinehart didn’t want to be a “silent” investor, but was motivated by a desire to take control of the reigns of the company by taking seats on the board, appointing senior staff and influencing the editorial direction. All of these assumptions were later confirmed by sources close to Rinehart, though at this stage it appears the current Fairfax board is strongly resisting attempts by Rhinehart to exert control.

On one level the reaction to Rhinehart’s tactics seems justified – immensely wealthy individuals shouldn’t be allowed to control the content of our “independent” media as it’s an incredibly important part of a vibrant democracy.

But hang on, isn’t Fairfax a publically listed company? And doesn’t that mean that its shareholders are entitled to representation on the board proportional to how much of the company they own? How is it ethical to prevent someone who owns one fifth of a company from having any say in how that company is run? Before answering these questions it’s worth fleshing out the context of Australia’s media landscape

Print is dying. It may not be dead, and it may never completely die-off, but its protracted, agonising descent is irrefutable. Declining circulation and ad revenue, largely the result of growth in online media, has savaged the operations and profits of most newspapers around the world, including Australia.

Initial attempts by those who run companies like Fairfax to bury their heads in the sand and pretend as though the internet doesn’t exist made the situation worse, as Eric Beecher, a former consultant to the board of Fairfax, explained in Crikey and on ABC’s Lateline. The end result is a hollow news organisation, a shell of its former self, dominated by “lifestyle” content designed primarily to push revenue generating sections like real estate classifieds while fewer resources put into investigative journalism and cadetships to train the next generation.

The people feeling the brunt in this downturn aren’t the executives making the decisions. Unfortunately it’s the journalists and sub-editors who are constantly under threat of being sacked. Recently Fairfax announced it was slashing 1900 jobs and closing down its printing plant in Melbourne. Fairfax was well on the path to ruin before Rinehart.

The other factor impacting on the contemporary Australian media landscape is diversity and ownership. Australia has one of the most concentrated media markets in the world. Rupert Murdoch’s News Ltd controls 70% of the newspapers in the country. Reforms to cross-media ownership laws, which prevented one company from owning multiple news outlets in the same city, passed by the Howard Government decreased diversity further, creating the current situation where Rinehart is allowed to purchase 10% of Network Ten as well as 19% of Fairfax.

These are the broad problems media companies are facing in Australia but they provide some insight into how to handle the Rinehart situation. People who are opposed to the Rinehart intervention into media, of which I am one, generally base their position on the following principles: 1) mass media is critical to our democracy; 2) independence is a good thing; 3) diversity is important and 4) stopping rich people from buying into media companies helps diversity and is thus good.

The last point is the one I take issue with. I don’t want to outsource the critical watchdog role the media plays to wealthiest in our society, but I don’t think people have grasped the idea that this is essentially how 90% of our media (everything but the ABC and small independent outlets) has always operated. Rinehart may be particularly repulsive to some, due to her politics and mining background, but Fairfax and News Limited were hardly working class organisations before she arrived on the scene.

Similarly, “independence” is a worthwhile goal but every newspaper, whether it’s The Daily Telegraph or The Sydney Morning Herald, has some kind of bias or particular perspective that relates to who owns it, who writes it, who edits it and who its audience is. That’s because the corporate media is there to make money, not to provide a public good.

This is why I find the calls for “media diversity and independence” which essentially amount to restricting the amount of shares individuals can buy in a company particularly frustrating. The assumption seems be that if one rich miner owning a newspaper is a bad idea, ten different rich miners owning the same paper is all of a sudden a good idea.

Protecting and improving our media landscape can’t be viewed in the narrow context of one individual’s shareholdings. Genuine independence doesn’t mean keeping the status quo, which is quite broken. Innovative new media sources like Crikey and New Matilda deserve support and patronage. Trade unions once combated corporate influence in the media by establishing radio stations and newspapers. The best thing for Australian democracy is to ensure that as many different voices and organisations flourish in print, online and on radio and TV.

Osman Faruqi
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