No time for media leaders to take a breath

EXTRAORDINARY events in quick succession have punctuated the media industry in recent days, and it is worth drawing breath to take it all in as we enter a new week of unfolding events.

Perhaps the most unlikely and happiest of these events has been the sight of readers queuing for newspapers – to get a souvenir front page of Barack Obama’s election as president of the United States. Many American newspapers sold out while our region’s Sydney Morning Herald was the only paper to tap the emotions on this side of the Pacific, putting out a special afternoon edition.

While new political hope took centre stage, one of the greatest names in regional publishing, the Packer family, took its leave with James walking away from the magazine company and PBL, for which his father, Kerry, had dedicated so much of his life.

The Packers, at least locally, are perhaps a greater icon of publishing than the Murdochs, whose true fortune has been found in the Northern Hemisphere. Even for the Murdochs, this has been an unusual time. Rupert Murdoch, chairman and CEO of News Corporation, announced a 30 percent fall in Q1 profit for the world’s largest media company, and lamented his Australian and British newspapers would need to cut costs.

The recent restructure of its arch Australian competitor, Fairfax Media, may well be seen as being ahead of the curve. The occasionally hysterical response of some media commentators to the Fairfax restructure might have been playing on Murdoch’s mind when he said, as reported in the Sydney Morning Herald: “You will see even leaner operations in both those places. I’m not prepared to say how many people – I know, but I don’t want the headlines – but expect across-the-board cuts.”

Restructure is a possibility at the third major newspaper publishing stable, APN. Last week, the company was shocked by the announcement that its largest shareholder, Independent News & Media (INM), is considering offers for its 39 percent stake.

Prospective buyers and their offers are not public. A sub-committee of directors, reportedly to be headed by Ted Harris, will consider the offers. Its formation is to ensure there is no conflict of interest in any decision. APN’s chairman is Gavin O’Reilly, heir to the INM business. He flew into Sydney last week to help guide future actions. APN chief executive, Brendon Hopkins, who has just renewed his contract, resigned from the INM board, reported.

APN’s business is a mix of newspapers – it is the biggest newspaper company in New Zealand – radio and outdoor advertising. Ideally, the company would like to sell the business in its entirety, but speculation focused late last week on suitors lining up to cherry-pick assets.

The price, however, might be affected adversely given the prospective earnings statement last Friday from Hopkins. He said earnings this year would fall 12.8 percent below forecast. He predicted a flat 2009. “Conditions for the foreseeable future will remain challenging and advertising bookings remain very short term,” he said.

That analysis would be shared by most other publishers currently. West Australian Newspapers’ CEO, Ken Steinke, a recent PANPA board member, gave the same analysis 24 hours earlier at his company’s annual meeting. The company reported net profit of $29.65 million for the three months to September 30, a 43.8 per cent jump on the prior corresponding quarter. Part of that was driven by its New Homes supplement. Like APN, Steinke was less optimistic about the next three months, saying he lacked visibility to immediate-term ad bookings.

New Zealand newspapers, of course, have been occupied by their own election in which the National Party’s John Key won 45 per cent of the primary vote to defeat the nine-year Labour incumbent, Helen Clark at the weekend. Like America, New Zealand is in recession but whether the Kiwis will line up for souvenir newspapers for this particular victory is debatable.


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