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December 7, 2006

I see that Fairfax Media has launched a $2.9 billion friendly shares-and-cash takeover bid for Rural Press, thereby creating the largest newspaper company in Australia. The takeover is to be completed in April 2007 and it will probably act as a deterrent to predators ( Murdoch, Packer and Stokes) eyeing a full takeover of Fairfax in the new media landscape. So the Canberra Times and radio stations (in Queensland and South Australia) will added to the AFR, SMH and Age. Rural Press was previously owned by Fairfax, before the bustup in the late 1980s, when Warwick Fairfax lost the company from his ill-fated $2 billion-plus privatisation of the group. Fairfax then slid into receivership.


Fairfax Media will emerge as a stronger, independent national media player following its effective takeover of Rural Press next year. It allows the combined group to step up its internet potential by using the content from the combined metropolitan, regional and rural newspaper group. However, the combined group has no interest in moving into free-to-air television.

Rural Press extracts a good margin out of its businesses as it runs them very lean and operates from a particularly low cost base. Local journalism meaning low rent journalism. Presumably, the tight control on costs by Rural Press will also be a key part of delivering earnings growth for the new Fairfax.

What does that mean for journalism at Fairfax Media? Yet more downsizing? Margaret Simons in the Sydney Morning Herald answers:

We can expect deep cost cutting, and it will be on the Fairfax side, not the Rural Press side, which is already so lean as to be skeletal. Brian McCarthy, the Rural Press chief executive, will now be in charge of running the broadsheets as well as regional and suburban newspapers. He is notorious as a tough, ruthless manager, cutting resources to the bone....the truth is that at Rural, John Fairfax has left McCarthy to run a lean, mean, accountant's company, and hasn't imposed his aspirations. So we can expect cost cutting at The Age and The Sydney Morning Herald. The truth is that this would have happened to some extent no matter who owned the mastheads.

Will the takover mean a much improved Canberra Times that has been so poorly resourced? A greater online local presence for the Canberra Times? How will community and localism work in the national capital?

| Posted by Gary Sauer-Thompson at 5:39 AM | | Comments (2)


I used to live in one of the semi-rural areas that Rural Press serviced - the local rag was a bit of a shocker.

yeah some of the rags are pretty dam awful. That is why the Canberra Times is such a good touchstone for the Fairfax commitment to a watchdog press.