Former prime minister Paul Keating has labelled the Nine and Fairfax Media merger an "exceptionally bad development" that will completely change Australia's news landscape.
On Thursday morning a shock announcement revealed the two companies will merge to form a media company encompassing newspapers, TV channels, real estate advertising, online news, radio, and streaming video services.
The company will be known as Nine – signalling the end of the Fairfax brand, which dates back to the mid-1800s. Nine shareholders will own 51.1% of the new company and Fairfax shareholders will own the other 48.9%.
Fairfax staff found out about the merger when news broke on TV breakfast shows this morning, BuzzFeed News has been told.
In a statement on Thursday afternoon, Keating blamed the Turnbull government, saying the merger was "bound to happen" with the relaxation of cross-media laws introduced by the Hawke government.
“The so-called cross-media rule gave Australia 30 years of media diversity, especially between Australia’s major television networks and its capital city print,” he said.
“The absence of those legislative barriers, in the media free-for-all the Turnbull government is permitting, will, because of the broadly maintained power of those outlets, result in an effective and dramatic close down in diversity and with it, opinion.
“It is true that the technology has brought myriad voices to a public eager for diversity of information. But the atomisation of web-based content, much of it other than local, cannot in terms of impact, be compared with the big local media players, particularly in consolidations of the kind announced today.”
He also hit out at the government’s attitude to the ABC.
“And, of course, if the government really had its way, Australia would face this much closed down and managed landscape without an ABC other than it is today – an independent national broadcaster,” he said.
Keating lashed out at Channel Nine as having "the opportunism and ethics of an alley cat" when it comes to news management.
"There has been no commanding ethical or moral basis for the conduct of its news and information policy," Keating wrote.
"Through various changes of ownership, no one has lanced the carbuncle at the centre of Nine’s approach to news management. And, as sure as night follows day, that pus will inevitably leak into Fairfax. For the country, this is a great pity."
He also criticised Fairfax, saying it was too slow to adapt as online took over.
"Fairfax spent decades missing all the signals about the rise of the digital economy when it could have put itself in a position of relative commercial independence.
"That notwithstanding, the current management has, in the circumstances, done a better than reasonable job in creating income sources to allow the company to preserve its editorial independence, especially in print."
Several journalists reacted with shock and dismay at the news Fairfax Media would be no more, and expressed skepticism over whether it was a merger or a takeover.
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
"there will be plenty of Fairfax Media DNA in the merged company" You don't need to say that when it is actually a merger. You say that when you are being taken over. Like saying there will be plenty of Fitzroy DNA in the Brisbane Lions
I am less attached the name "Fairfax" than I am to the names of the noble mastheads we publish - mastheads which have been a pillar of public life in this country for 150-odd years. Hopefully our new overlords will value them too.
The combined properties will include Nine's free-to-air TV network, Stan, Domain, The Sydney Morning Herald, The Age, a stake in Macquarie Media, as well as the two companies' online news sites.
Nine's CEO Hugh Marks will remain the CEO of the new company, and Nine's current chairman and former Liberal treasurer Peter Costello will head up the new company. Two other Nine directors will be on the board, but Fairfax CEO Greg Hywood told staff on Thursday morning that there would be "plenty of Fairfax Media DNA" in the merged company and on the board.
Nine said that the merger "is expected to deliver" annual cost savings of $50 million that will be implemented over two years.