RICK:

From Schwartz Media, I’m Rick Morton, this is 7am.

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RICK:

If you pick up a copy of The Age or The Sydney Morning Herald, you’ll see the tagline “Independent Always” under the masthead.

Now, as journalists at those papers reel from a recent announcement that 200 jobs would be cut across the company, some are wondering if they’ve been targeted for being too independent.

MIKE:

A lot of people have been asking whether this disproportionate cut is payback because of the coverage the papers ran on Sneesby and Costello. Sneesby, of course, being the CEO of the Nine Empire and Costello being the chairman of the board.

RICK:

The cuts come at a terrible time for Australian media with jobs going at Channel Seven, News Corp and others as well. It seems almost nowhere is immune.

Today, National Correspondent for The Saturday Paper Mike Seccombe, on why the Australian media is struggling and what it means for the future of independent news.

It’s Tuesday, 9th of July.

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RICK:

Mike, you’ve been talking to journalists at what used to be the Fairfax papers, now the Nine newspapers. Take me to the moment that they found out that there would be these significant mass job losses.

MIKE:

Well, it was just before 10:30 in the morning, Friday the 28th of June. The same day as the big debate between Trump and Biden. So, you know, a normal, not particularly busy news day in the office and then a message just popped up. First of all, a slack message saying, please, you know, go to your email and have a look at this email from Mike Sneesby, and there's the email announcing job cuts. And, according to all the sources I spoke to, things got very intense, very fast from that moment because somewhere between 70 and 90 jobs were to go from publishing, that is the old Fairfax papers, only 38 from TV News and Current affairs and the rest to be made up from sort of, you know, head office and digital and stuff, but falling very heavily on publishing, on the old newspapers.

Suddenly, nobody who wasn't tasked to do it was watching the debate, and journalists were gathering in little knots all around the newsroom discussing the email, calling around their colleagues, emailing them, you know, all that sort of thing and trying to work out why this was suddenly happening to them. Because there hadn't been a redundancy round at the old Fairfax papers for something like seven years. So, you know, why now was the question.

RICK:

And of course, news in the newsroom travels faster than even in the ordinary world. What did it take for people to make sense of what was actually happening and what were they starting to say when they made those calls?

MIKE:

Well, you're right. News does travel faster than in the ordinary world. The other good thing is, if you're reporting on it, journalists are compulsive communicators. So, you know, it wasn't very hard for me to find a whole lot of sources to talk about this. Let me quote directly from one senior reporter. A lot of people have been asking whether this disproportionate cut is payback because of the coverage the papers ran on Sneesby and Costello. Sneesby, of course, being the CEO of the Nine empire and Costello being the chairman of the board. So this reporter was referring to the revelations of a few weeks ago.

Audio Excerpt - Sharri Markson, Sky News:

“Nine has been accused of covering up allegations that its legendary news guru, former director of news and current affairs Darren Wick, behaved inappropriately towards women.”

MIKE:

Multiple women came forward with allegations that Darren Wick, the former head of Nine's television and current affairs news division, had drunkenly groped them and made unwanted sexual advances.

Audio Excerpt - Sky News Reporter:

“The revelations have sent shock waves through the media industry with sources entering the fray to allege that Nine not only knew about Wick’s alleged behaviour, but covered it up.”

MIKE:

Wick resigned on March 15th with a reported million dollar payout. The claims of the sexual harassment, etc., were first reported in the Murdoch media, and the Nine papers immediately weighed in painting a very unflattering picture, of course, of the culture at the other Nine division, television and news and a current affairs, and also the apparent failure of senior executives and the Nine board to do anything about it. So, it was reported that there had been non-disclosure agreements used to silence the complainants, that the board and Sneesby, the chief executive, had been aware of complaints against Wick before they agreed to this large payout. So, here was one part of the Nine empire reporting on another part of the Nine empire, and reporting pretty grim stuff, frankly.

Audio Excerpt - The Australian:

“Why won't you support Mr Sneesby publicly?

Audio Excerpt - Peter Costello:

“Good to see you.”

Audio Excerpt - The Australian:

“Well, you’ve got to answer the questions Mr Costello. Don’t, don’t. You’ve just assaulted me.”

MIKE:

And you'll remember, of course, it’d end up with Peter Costello, the chairman of the board, resigning a few weeks ago.

Audio Excerpt - ABC News:

“Former Treasurer Peter Costello has stepped down as chairman of Nine Entertainment just days after an altercation with a journalist at Canberra Airport.”

MIKE:

Anyway, Costello didn't survive, Sneesby survives for now. Then he announces all these job cuts. So, you know, given all the recent history, it's not really surprising that quite a few people suspected retribution in these latest job cuts.

RICK:

I can't pass up the idea that Sneesby falters over in television and publishing catches a cold. Now they're dealing with the fallout. How's the company handling the suspicion and the anger that's risen up through the ranks?

MIKE:

Well, there were hastily arranged “town hall meetings”, so-called, involving, you know, various editors and staff on the floor. And, I've got to say, these appeared only to make things worse. The way it was put to me was that it became immediately obvious to everyone that the editors themselves hadn't found out what was coming much before the rest of the staff had, and they weren't really able to give any further details. So early afternoon, there's a union meeting held on Zoom, and it was very angry. Some people were saying, let's walk, but that didn't happen. Instead, a resolution was passed expressing the fury, that was the word they used, of the staff at The Age, The Sydney Morning Herald, Australian Financial Review, WA Today and The Brisbane Times. And I might quote from it because it's sort of alluded to the conspiracy theory that this was payback. It said, we note the recent poor behaviour and cultural issues in other parts of the company, which has been widely reported, and the role that the independent reporting of the publishing division has played in upholding the reputation of the company's news division. We demand an explanation from the company about why the publishing division appears to have been disproportionately targeted for job losses.

They went on in the resolution to question whether they were being targeted because of the fact that it was a unionised shop, and the resolution also moved no confidence in Nine Chief Executive Mike Sneesby, and the Nine Entertainment company board. It passed unanimously.

RICK:

Coming up after the break, how social media giants are dismantling news in Australia.

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RICK:

Mike, we've been hearing that journalists at the Nine newspapers suspected they've been targeted for their reporting on their own company, certainly other divisions of it, but it's been a bad time for the media across the board, really. Can you tell me a little bit about where that's happening elsewhere?

MIKE:

Well, you're entirely right, of course. Underlying all of this is the fact that it's just hard times in media.

Last month, Rupert Murdoch's News Corp announced its biggest restructuring in a decade. There's already been a bit of reshuffling at the top, at the, sort of, editorial level, but it's yet to be revealed how many jobs will go. But they're aiming to cut costs by $65 million, so you can expect that there will be quite a lot of jobs disappearing very shortly. The Murdoch Media, of course, is a bit of a black box. You never hear as much about what's going on as you do out of the more democratic institution of Fairfax.

Then two weeks ago Seven West Media, which is controlled by the Western Australian billionaire Kerry Stokes, he announced that staff there would be cut by 150 in pursuit of $100 million in savings. And a similar story is happening all across the country in media large and small. Revenue is declining, budgets are stressed, and ultimately, of course, that has impacts on staffing.

RICK:

It has been tough for legacy media for some time. I'm told that it's one of the worst advertising markets ever in newspapers. Is that why we're seeing all of these cuts all at once right now or is there more to it?

MIKE:

You're right, It has been tough for a while. When I spoke to the MEAA that's, you know, the journalists union, the media acting director, Michelle Ray, described this week of cuts as, quote, one of the most harrowing weeks she'd seen in journalism. And who can deny it? As to why, a couple of years ago a deal was struck between the big social media company Meta, you know, which runs Facebook, and the search engine Google, which runs YouTube, among other things, to pay Australian media companies for the news that they picked up from those companies. This was under something called the News Media Bargaining Code and that allowed Nine, Seven, News Corp, all the other players in the industry, to reinvest some money in journalism. And collectively, this amounted to several hundred million dollars between the two big tech companies spread across the various media, large and small. Back in February, Meta announced that it would not renew its deals. So bang goes maybe $150 million, we don't know exactly because these things are commercial in confidence, but nonetheless this was a big deal. This was funding a lot of journalism. Since then, the MEAA has been calling on the federal government to designate, as they call it, Meta under the code and force it to continue paying. The government hasn't acted and, frankly, there's real doubt about what it can do.

RICK:

And Nine, I mean, Nine, quite apart from other Australian media companies, seem to have been doing quite, you know, quite okay in the last few years.

MIKE:

They were and, you know, when you speak to the analysts about this, Nine was actually pretty well run compared with the other big companies. Seven West Media, its share price at the moment, I think it's something like $0.18, right? It's lost 95%, or something, of its value over the past couple of decades, so it's enormous. It has not been nearly as bad at Nine. Back in February, Nine reported revenue for the six months to December of 1.411 billion, which was up 5%. Net profit after tax was $190 million. Now that was down a bit, it was down about 16% due to increased costs but, you know, that's still a pretty healthy return. And interestingly enough, the one section of the business in which revenue growth exceeded costs was publishing, which is another reason that it seems odd that the cuts have fallen disproportionately on publishing.
So, compared with the other legacy media, Nine's done pretty well and part of the reason for that was because they had this suite of complementary units. They had the quality of the Fairfax papers, amplified by the reach of the electronic media, plus they had, you know, right wing shouters on talkback radio. They had the specialist publication The Fin Review. They had the gamut pretty well covered, and as a result they were a bit more resilient. On Monday, the managing director of Nine Publishing, Tori McGuire, held another big town hall meeting. And, I've got to say, it didn't go well for some of the reasons the earlier ones didn't go well. She didn't add much to the sum total of knowledge. Furthermore, staff were already pissed off, as one attendee put it, that Sneesby wasn't there because he'd left to go on holidays to Greece shortly after sending out the email telling them all that 200 of their jobs would be, you know, gone soon. So that didn't help the mood of the troops. And it didn't improve when Tory McGuire, sort of, preemptively told them that she too was about to go on leave and she was going to Fiji. So everyone at the old Fairfax Media is in a state of sort of hiatus. I was speaking to some of them on the weekend, they're all frantically doing their numbers and trying to work out how much they would get in redundancy if they took up the offer.

RICK:

Suddenly we're all interested in mathematics.

MIKE:

It's not always the strongest point of journalists, I can tell you from personal experience.

RICK:

I know. I mean, like there's a bit of dark humour around job losses in journalism in particular, and of course it's sad and it's not good news for anybody. But readers are the ones ultimately who, I think, suffer. Particularly in this case where, you know, Fairfax newspapers still do some of the best investigative reporting in some of the most public interest journalism in the country. What will the impact be of these cuts? Because, you know, they might not get rid of a Nick McKenzie, for example, but people who do the bread and butter stuff, who support those bigger names, maybe.

MIKE:

Well, that's right. And we've already seen this. I mean, when I were a lad, you know, you had all these specialist reporters covering specialist rounds, beats, you know, and there's not nearly as much of that anymore. So there's lots of stuff already that is not as comprehensively covered as it once was and you'd have to think that that's going to get worse. You know, as you allude to, Fairfax is a particularly interesting case because, you know, it's not like the Murdoch papers, it's not like Seven West where they are, to some extent, beholden to the ideology and moods of their owners. It says right under the masthead, it says independent always. And the staff actually take that quite seriously and I might add that that is undergirded by the fact that they’re a union shop, and the union is fiercely protective in every round of negotiations about the Charter of Independence.

So, if management is going after them because they are unionised and because they are independent, well that's a particularly sad thing.

RICK:

Michael Seccombe, thank you so much for joining us.

MIKE:

Thanks a lot, Rick.

RICK:

I just called you Michael, I’m so sorry. I was thinking in my head it would be funny to call you Michael instead of Mike and then I actually did it.

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RICK:

Also in the news today...

The CEO of Nine-owned youth publisher Pedestrian Group has announced he’ll be leaving the business as 40 jobs are set to be cut.

These jobs are in addition to the 200 jobs already announced by Nine.

The company will restructure and titles including Vice, Refinery29, Gizmodo and Lifehacker will no longer be published in Australia.

And,

Marine Le Pen’s far-right National Rally has failed to take power in the French election.

In a shock result, a left-wing coalition won the most seats, with President Emmanuel Macron's centrist alliance in second and the far right in third.

I’m Rick Morton, this is 7am. See you tomorrow.

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