Fairfax shareholder backs restructure
Market watch top headlines
SYDNEY, June 24 AAP
June 24 2012, 3:04PM
A major Fairfax Media shareholder is backing the diversified publishing house's recently announced massive restructure.
Simon Marais, the managing director of funds manager Allan Gray, says Fairfax has done the right thing in response to the changes in the media industry.
"I really think they have no choice," Mr Marais told ABC Television's Inside Business on Sunday.
On June 18, Fairfax Media chief executive Greg Hywood announced 1900 job losses, the conversion of its two flagship broadsheet mastheads, The Age and The Sydney Morning Herald, into a tabloid format and the shutdown of major printing facilities in Sydney and Melbourne.
Fairfax will also introduce paywalls around its online websites.
"If you just sit there and do nothing I think this thing was probably, especially the metro business, was drifting into oblivion," Mr Marais said.
"I think you have to recognise the fact that there's not as much money in news as there was and you have to cut your costs to match it."
Allan Gray holds about eight per cent of Fairfax stock.
Mr Marais said Fairfax's editors should be allowed to report the news independently and without influence from board members.
"If they're not independent, people will cease reading the paper," Mr Marais said. "That is important."
Fairfax Media's largest shareholder, Gina Rinehart, who holds about 18 per cent of the company, was seeking as many as three board seats.
However, existing directors were keen for Ms Rinehart to sign a charter of editorial independence before any offer to join the board was made.
Meanwhile, News Ltd chief executive Kim Williams said having Fairfax and News, publisher of newspapers such as The Australian, Melbourne's Herald Sun and Sydney's Daily Telegraph, work together on printing facilities made "a lot of sense".
"I've said so to Fairfax, but Fairfax don't seem to see that as a priority and clearly have made alternate arrangements and are pursuing a different avenue now," Mr Williams told Sky News on Sunday.
News Ltd is the Australian arm of Rupert Murdoch's global media empire News Corporation.