Fairfax CEO Greg Hywood could walk away with almost $7m after merger
THE newspaper boss who killed the 177-year-old Fairfax name could walk away with close to $7 million after agreeing to a Nine takeover in the biggest media shake-up in decades.
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THE newspaper boss who killed the 177-year-old Fairfax name could walk away with close to $7 million after agreeing to a Nine takeover in the biggest media shake-up in decades.
Fairfax CEO Greg Hywood dealt himself out of a job after giving the green light to a $4.2 billion deal with the nation’s second-biggest TV network, to be called Nine and run by its boss Hugh Marks.
It creates Australia’s second-largest media company, combining print and online title The Sydney Morning Herald, Radio 2GB, Nine’s TV channels, streaming service Stan and real estate site Domain.
This reach across all media platforms in a single market was made possible after the Turnbull government last year loosened cross-media ownership rules.
The Nine chainsaw will hack first and hard in Canberra. Watch it. Vroooooooooom. They won’t be keeping separate press gallery bureaux for the SMH, the Age, Nine News and the Macquarie radio network. I’d guess about a dozen jobs to go there. Just saying...
— Mike Carlton (@MikeCarlton01) July 26, 2018
The competition watchdog will undertake a “full review” of the deal and, should it pass regulatory hurdles, the Fairfax name will be consigned to history.
Nine has the controlling share of 51 per cent of the merged company and Nine’s chairman, former treasurer Peter Costello, will run the board.
As treasurer Mr Costello locked horns with Fairfax but an insider said yesterday he now “likes Fairfax enough to buy it”.
Mr Hywood for now remains Fairfax CEO but should he choose to stand aside after the merger he is in line to get a year’s termination pay at $1.6 million and a potential maximum bonus of $960,000, after delivering a 22 per cent premium on the Fairfax share price under the deal.
So after 150-plus years this is all we get: “I would like to thank everyone for their contribution to Fairfax†https://t.co/GHjXMRTX2f
— Kate McClymont (@Kate_McClymont) July 25, 2018
He also holds five million shares and performance rights, which were yesterday worth $4.3 million, and another 9.3 million options.
Mr Hywood yesterday refused to discuss what payout — if any — he would be in line to receive, nor would he confirm whether he was negotiating to take one of three seats on the board of Nine being offered as part of the deal.
“This is not about social issues. This is not about who’s who in the zoo,” Mr Hywood said.
They gave away the name "Fairfax"? I want to cry, too. @murpharoo
— Virginia Trioli (@LaTrioli) July 25, 2018
Media analyst Steve Allen said Mr Hywood’s silence on the issue was an indication “he was still negotiating and leaning towards a board position”.
He said the decision to dump the Fairfax name was a mistake, since there was value in the brand.
“Leaving it out is just crazy in my view,” Mr Allen said.
And why is #Fairfax calling this a merger? It’s a take over!
— Monica Attard (@AttardMon) July 25, 2018
Nine CEO Mr Marks said the $4.2 billion company would give advertisers an enhanced offering of multiple platforms including digital, radio, streaming, print and TV.
The news put a rocket under the Fairfax shareprice, sending it up 10 per cent, while Nine shares plunged 8 per cent.
Prime Minister Malcolm Turnbull welcomed the merger: “I used to work for the Nine Network in the past, in my journalistic and legal past, and I think bringing them together will strengthen both of them.”
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But former prime minister Paul Keating, who designed the cross-media ownership rules which were substantially scrapped last year, slammed the deal and said the solution to competition from Google and Facebook was not to allow the a big TV station to take over a big print organisation.
“This is an exceptionally bad development,” Mr Keating said.
Mr Marks said the deal would save $50 million by getting rid of duplicating roles but insisted no editorial job would be lost “as a result of the merger”.
He insisted the two media organisations would keep their own identities.
“Certainly there are no proposals to do anything other than business as usual,” Mr Marks said.
Fairfax journalists reacted with anger to the news, hitting social media with the hashtags, #savethename and #valefairfax.
Fairfax staff in the past have gone on strike over job cuts, which in May included 115 redundancies.
Mr Hywood yesterday created an awkward moment when he told staff the shoe was now on the other foot as he was “announcing his own redundancy’’.
“If this merger takes place, you can all be confident that the culture of independent journalism will not just survive but thrive,” Mr Hywood said.
Mr Marks also raised the hackles of angry Fairfax journalists when he accidentally referred to Fairfax as the ABC in a press conference, saying: “We’ve discussed and endorsed at a board level the independence charter under which the ABC operates.”
His questioner, high-profile Sydney Morning Herald investigative journalist Kate McClymont, deadpanned: “We’re Fairfax, not ABC.”
Former Fairfax editor Gay Alcorn wrote in The Guardian that losing the Fairfax name was “another punch in the stomach”.
“As Greg Hywood drives off in his Maserati with his millions of dollars in bonuses, he’ll no doubt congratulate himself for the brilliant job he’s done. For the rest of us, give us a moment to shed a tear,” she wrote.
Australian Competition and Consumer Commission chair Rod Sims said he would conduct a full review of the proposal.
“In every merger I have ever dealt with the merger parties never think there’s competition issues,” Mr Sims said.
Originally published as Fairfax CEO Greg Hywood could walk away with almost $7m after merger
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