Fairfax - no boss zone

[Ideo]

Well you always have the non-Gina Rinehart press like News Corp, ABC etc. It's not like Fairfax controls other media outlets like TV, radio etc the way they do with newspapers.

So, you are comfortable with someone riding roughshod over existing business charters because they are used to getting their own way?

I have no issues with Rinehart owning a share, nor having an appropriate number of seats on the board.

However, to do this, she has to sign a document that says she can't get her own way all the time.

 

[Aaron_C]

So, you are comfortable with someone riding roughshod over existing business charters because they are used to getting their own way?

I have no issues with Rinehart owning a share, nor having an appropriate number of seats on the board.

However, to do this, she has to sign a document that says she can't get her own way all the time.

Well I don't own any Fairfax shares and I don't like anyone, government or otherwise, trying to tell me how or what to think.

However, ultimately Fairfax is a publicly listed company and so it must comply with the rules of the ASX and the Corps Act. Directors cannot simply nilly-willy keep control of a company if enough shareholders (who are the ultimate boss) say otherwise. Directors (both owner and PAYG) are expendable. There is no 'charter' or whatever which says who can/can't have control of a company except for special legislation like Qantas.

 

[dan c]

However, ultimately Fairfax is a publicly listed company and so it must comply with the rules of the ASX and the Corps Act. Directors cannot simply nilly-willy keep control of a company if enough shareholders (who are the ultimate boss) say otherwise. Directors (both owner and PAYG) are expendable. There is no 'charter' or whatever which says who can/can't have control of a company except for special legislation like Qantas.

It's not about control of the company. It's about editorial control of the newspapers. There is a big difference.

18% of the company isn't anywhere near a majority, so why should she be able to infuence the content of the newspapers? If Gina or anyone else wants to do that, then launch a bid for the whole company.

Then she can do whatever she likes.

 

[Aaron_C]

It's not about control of the company. It's about editorial control of the newspapers. There is a big difference.

18% of the company isn't anywhere near a majority, so why should she be able to infuence the content of the newspapers? If Gina or anyone else wants to do that, then launch a bid for the whole company.

Then she can do whatever she likes.

You're right - 18% is not a majority. But you know that under the Takeover laws here you can only get to 20% before you are prohibited from purchasing any more stock unless you launch a takeover bid. So 18% is pretty influential - and that influence is entitled to spread to the editorial content if she is able to get her own people (and herself) on the Board of Directors. Each person is entitled to their view/political alignment - there is no 'protected' species in this business. It just so happens that Gina, the one with money/power, does not agree with the 'latte-sipping' views of the Left who seem to think they are entitled to control Fairfax's news content without having any sort of control via money or shareholdings. Go figure.

 

[Peter_Tersteeg]

Well I don't own any Fairfax shares and I don't like anyone, government or otherwise, trying to tell me how or what to think.

I suspect the editors and journalists working there feel exactly the same way, which is why they want her to sign the charter like every other director.

 

[dan c]

You're right - 18% is not a majority. But you know that under the Takeover laws here you can only get to 20% before you are prohibited from purchasing any more stock unless you launch a takeover bid. So 18% is pretty influential - and that influence is entitled to spread to the editorial content if she is able to get her own people (and herself) on the Board of Directors. Each person is entitled to their view/political alignment - there is no 'protected' species in this business. It just so happens that Gina, the one with money/power, does not agree with the 'latte-sipping' views of the Left who seem to think they are entitled to control Fairfax's news content without having any sort of control via money or shareholdings. Go figure.

Firstly, well done for the 'latte-sipping' reference. Again.

So the editor of the AFR (hardly the Daily Worker, by the way) has a story on Hancock Prospecting that he wants to run. It's newsworthy, and in the public interest. Gina doesn't want it to run for business reasons, or privacy reasons or whatever.

Why should she be able to quash it? Because she owns 18% of the paper? Proprietor interference will ruin the papers. You only have to look at some of the rubbish sprouted in the Oz to see that.

 

[truong]

Seems to me the debate is all about public interest (editorial independence) vs private interest (shareholders).

IMHO the first companies that should be required to sign a public interest charter are… the banks! After all they’re getting huge taxpayer funded subsidies in the form of the deposit guarantee.

AFAIK Fairfax doesn’t get a cent from the Commonwealth.

So chill out and let Gina direct her company as she sees fit. She will quickly find out that as far as media is concerned, to go against the public interest is also to go against her own.

 

[Aaron_C]

Firstly, well done for the 'latte-sipping' reference. Again.

So the editor of the AFR (hardly the Daily Worker, by the way) has a story on Hancock Prospecting that he wants to run. It's newsworthy, and in the public interest. Gina doesn't want it to run for business reasons, or privacy reasons or whatever.

Why should she be able to quash it? Because she owns 18% of the paper? Proprietor interference will ruin the papers. You only have to look at some of the rubbish sprouted in the Oz to see that.

I had a latte this morning, was OK but not that good.

In any case, to answer your question, editors make judgment calls all the time on content to publish. If people are so worried about her influence they should start their own publishing business. They are free to do so but I don't think anyone would have that much confidence in them after losing so much money these past few years.

 

[Ideo]

Firstly, well done for the 'latte-sipping' reference. Again.

So the editor of the AFR (hardly the Daily Worker, by the way) has a story on Hancock Prospecting that he wants to run. It's newsworthy, and in the public interest. Gina doesn't want it to run for business reasons, or privacy reasons or whatever.

Why should she be able to quash it? Because she owns 18% of the paper? Proprietor interference will ruin the papers. You only have to look at some of the rubbish sprouted in the Oz to see that.

Exactly my position on the matter.

Why should she be the only director not to sign the agreement to impose editorial direction on the news media? What special rights does she have?

A lot of these concerns are coming from those rabid leftie socialist scums, the fellow board directors.

 

[dan c]

In any case, to answer your question, editors make judgment calls all the time on content to publish. If people are so worried about her influence they should start their own publishing business. They are free to do so but I don't think anyone would have that much confidence in them after losing so much money these past few years.

True.

Of course, Gina could start her own media business too, seeing as though she is the one who wants to influence the editorial content. This would then give the consumer more choice.

 

[dan c]

I had a latte this morning, was OK but not that good.

I knew you were a secret latte sipper!

 

[truong]

Editorial independence can be a very relative thing. Read Terry McCrann:
http://www.heraldsun.com.au/ipad/gift-that-keeps-on-giving-deliciously/story-fnd2zcc1-1226409547098

The very different appointment of Holden provided a delicious intersection with a letter to that paper from a few dozen 'right-thinking' Melburnians, defending the Age's - their word - integrity to report without fear or favour.

The letter was another example of very clever people saying very stupid things.

They opened by saying the Age's charter of editorial independence defined the culture of Fairfax journalism and was recognised by the Fairfax board as "critical to the value of the company".

That's a cack-handed bank-hander if ever there was one, considering the 90 per cent recent drop in the "value of the company".

More pointedly, my colleague Andrew Bolt has identified one of the new editor's proudest achievements as editor of Fairfax's The Press newspaper in Christchurch across the ditch. Bringing Earth Hour to that city and promoting it.

Ah, 'promoting Earth Hour.' I wonder how the 'useful idiots' who wrote to The Age rationalise The Age's massive promotion of Earth Hour with their motherhood statements about "public trust in The Age's journalism."

In 2008 then Age CEO Don Churchill wrote to staff thanking "everyone who has been involved in organising, promoting and writing about tomorrow night's big event, Earth Hour."

Hmm. Editorial independence anyone?

His boss, the overall Fairfax CEO, David Kirk showed his fine appreciation of independent journalism, when he declaimed, "Our publications and websites have done an outstanding job in promoting Earth Hour." Both CEOs 'invited' staff to 'participate in Earth Hour and 'volunteer' to work at the Earth Hour concert.

Then we had The Age's 'partner' in Earth Hour, the activist World Wildlife Fund, 'suggesting' all sorts of Earth Hour story ideas to then editor Andrew Jaspan.

Thanks to the ABC's Media Watch, we know that Jaspan took good dictation, as the 'suggestions' all made it into The Age's 'independent' coverage of Earth Hour.

Interesting word 'partner' from Jaspan. What he didn't say and nor did The Age in all its voluminous 'without fear or favour, independent' coverage of Earth Hour, was that Fairfax was actually a part owner of Earth Hour.

Indeed, as former Media Watch executive producer and now proprietor of The Week, David Salter, wrote: Earth Hour began in 2007 as a "promotional campaign for Fairfax dreamed up by an advertising agency, Leo Burnett".

Salter posed the ethical issue: a purportedly independent media organisation adopting and endorsing a partisan, activist position. "If The Age and SMH continue to devote so much unquestioning time, effort and newsprint to the nonsense of Earth Hour, can we assume their general reporting on climate change is impartial?"

Of course you can David. We have the word of those dozens of useful idi..., er, upright, informed citizens.

As they concluded their letter, the proof of The Age's independent journalism is the way it "underpins the commercial value" of the masthead. The proof of that quality journalism is on display every day, in the Fairfax share price.

Why, who knows what Gina would do. Probably partner The Age with Ian Plimer and start promoting the not-Earth Hour. That of course would be an outrageous breach of The Age's journalistic integrity.

 

[Jonril]

My cynical take on it is that Ms Rinehart has (a possibley justifiable) beef with some FXJ journo's.

Why bother wasting time and money on the courts fighting a sinking ship when you can just waste money and scuttle the sinking ship.

 

[willair]

Why bother wasting time and money on the courts fighting a sinking ship when you can just waste money and scuttle the sinking ship.

Good too see the volume is starting to run again,all that needs to happen now is the high end of the investors start to sell in huge numbers,then Ms Rinehart does the same with her holdings,because She can..

 

[Dazz]

You ask some very silly questions sometimes, especially when the answers are staring you in the face.

Why should she be the only director not to sign the agreement to impose editorial direction on the news media?

....because she is a free woman, and she has every right under the law...just as every citizen in this country has, not to sign a document if she doesn't agree with what is written on that document.

The imposition from that document is from the workers, not the other way around.

Once again, trying to run a company from the bottom up simply doesn't work.

What special rights does she have?

See above. We all have the same right. She doesn't feel the same pressure as the other weak kneed Directors to cave into the stroppy journalist's demands.

She's used to negotiating against hard nosed Chinese businessmen and rough and tumble miners here in WA. A couple of self-important lefty Melbourne journo's who don't need a job must seem to her like grappling with a wet lettuce leaf.

One doesn't even need to mention that she is the largest shareholder in the company....apparently that counts for nought in your eyes. In other people's view, that would and should carry special rights. You obviously don't think so.

A lot of these concerns are coming from those rabid leftie socialist scums, the fellow board directors.

.....who have presided over a whopping drop in share price from $ 5.40 down to 55c a pop. If that's what you get for following the charter of independence, then good luck with that !!

Once again, trying to run a company from the bottom up simply doesn't work.

Another fine example of lefties being extremely efficient at spending other people's money and destroying other people's wealth....and not even batting an eyelid over it.

 

[Ideo]

I have said that she has every right to sit on the board in proportion to her shares.

If the other directors see signing the charter as being a requirement that is there business. She can attempt to change it, but she is not the only one who is involved in the company and if the rest of the board disagrees, that is business. You don't always get your own way.

 

[HiEquity]

I have said that she has every right to sit on the board in proportion to her shares.

This is not correct. She can only sit on the board if a majority of shareholders agree to it.

Currently it would seem that the majority of shareholders do not agree to it due to concerns her interests are not aligned with theirs. This would appear to be a reasonable concern given her unwillingness to accept obligations that the majority of shareholders view as critical for a director to accept in order to maintain the integrity of their brands.

The best way to resolve this is for her to:
a) Put it to a vote at an AGM, or
b) Dig a little deeper and mount an actual takeover bid.

Until she successfully does either of these two things, then she should get no special consideration.

 

[Dazz]

Agreed....

 

[oracle]

This is not correct. She can only sit on the board if a majority of shareholders agree to it.

Currently it would seem that the majority of shareholders do not agree to it due to concerns her interests are not aligned with theirs. This would appear to be a reasonable concern given her unwillingness to accept obligations that the majority of shareholders view as critical for a director to accept in order to maintain the integrity of their brands.

The best way to resolve this is for her to:
a) Put it to a vote at an AGM, or
b) Dig a little deeper and mount an actual takeover bid.

Until she successfully does either of these two things, then she should get no special consideration.

Who are these majority shareholders?

Care to share a link where the majority shareholder voted against her taking steps she wants to take? Do these majority shareholders believe Gina will do a better or worst job at running this company? These majority shareholders have already seen their equity reduced by 90%.

Based on their 2011 annual report the largest shareholder used to be Marinya Media Ltd which owned just under 10%.

Gina on the other hand owns nearly twice that amount. Without making any speculations and based on these facts she is the one with the greatest vested interest in the company and people claiming otherwise have their own vested interests IMHO.

Gina is worth upwards of $30B and her investment in Fairfax is about $250m which is less than 1% of her total wealth. She is more than capable to mounting a take over if she wants to and I don't think she is going to need anyone's opinion on that.

Let's just assume all the speculation regarding Gina trying to influence editorial content is true...than let the public be the final judge and they will have the final say on whether they like the editorial content and pay for the newspaper or not. If people don't buy Fairfax newspaper it will not survive and Gina would have lose her $250m investment.

But just like someone with $100,000 in bank doesn't like to purposely do something where they know they will lose $1000, I don't think Gina is in it to lose her $250m.

Cheers,
Oracle.

 

[HiEquity]

Who are these majority shareholders?

I said the majority of shareholders, as currently represented by the Board. The Board has said they have received feedback from shareholders and their decision is based on what they believe the majority of shareholders want.

Gina is perfectly entitled to contest this at an AGM and test what the majority actually want.

BTW $250m is petty cash for her compared to influencing the nature of the Mining Tax debate, to take just one example. And she should be perfectly entitled to spend it that way if she wishes but to date she hasn't put that amount on the table. So her two options remain as I outlined previously.

Do you think she should get a board seat in the absence of evidence that it's what the majority of shareholders want? And in the face of the Chairman's statement that it's very likely to not be what the majority of shareholders want? I don't know what point you are trying to make here...