“News of today’s announcement takeover of Fairfax by Channel Nine will change the news landscape of Australia altogether,” Mr. Keating said.
Though Mr. Hywood said there would be “plenty of Fairfax Media DNA in the merged company,” experts said Fairfax’s rural, suburban and regional publications would most likely have no future within the new combined business.
“It’s catastrophic,” Denis Muller, a senior research fellow at the University of Melbourne’s Center for Advancing Journalism, said of the deal. “It’s clearly a takeover of Fairfax by Nine and it seems Nine will be calling the editorial shots.”
Like many media companies, Fairfax is struggling to keep readers as the number of news outlets online grows. The company’s stock is still below the levels it reached before the global financial crisis, even as the broader Australian market has bounced back.
“This merger with Fairfax will add another dimension, creating a unique, all-platform, media business that will reach more than half of Australia each day through television, online, print and radio,” Hugh Marks, chief executive of Nine, said in the statement announcing the merger. “For our audiences and employees, this means we will continue to be able to invest in premium local content across news, sport, entertainment and lifestyle,” he added. Mr. Marks will be the chief executive of the new company, and Peter Costello, a former Liberal Party politician now also with Nine, will be the new chairman.
Wall Street last year started a bidding war for Fairfax Media, with two large American private equity firms, TPG Capital and Hellman & Friedman, valuing the company at nearly $3 billion.
Just weeks before those bids emerged, Fairfax said it would have to sharply reduce staffing at many of its newspapers to contain costs and experts concluded the driver behind the bids was Domain, which has quietly become Fairfax’s most lucrative business. Domain’s digital revenue grew 15 percent in the six-month period that ended in December while Fairfax’s overall revenue dropped almost 5 percent.
Both TPG and Hellman & Friedman withdrew last year from buying out Fairfax but did not say why.