Are Nine’s staff cuts ‘payback’?

When Fairfax Media launched its new tagline in August 2013, it took out full-page ads to announce it to readers. The words were also set under its mastheads: Independent. Always.

“Fairfax’s greatest strength as a news organisation is its independent journalism,” the company’s then chief executive, Greg Hywood, boasted. “Our audiences want it. They value it. Others won’t and can’t deliver it.”

Five years later, when Fairfax merged with one of those “others”, Nine Entertainment, some questioned whether that independence would survive. On most accounts, it did.

Now, however, journalistic staff at Nine’s publishing division, which holds the former Fairfax mastheads The Sydney Morning Herald, The Age and The Australian Financial Review, are again questioning whether they have been targeted by their employer for being, in various ways, too independent.

As one senior reporter puts it, speaking to The Saturday Paper after last Friday’s announcement that the company plans to cut up to 200 employees: “A lot of people have been asking whether this disproportionate cut is payback because of the coverage that the papers ran on Sneesby and Costello.”

The reporter is referring to the revelations of a few weeks ago, after multiple women came forward with allegations that Darren Wick, the former head of Nine’s television current affairs and news division, had drunkenly groped them and made unwanted sexual advances. Some believed their careers had suffered as a result of having spurned those advances.

Wick resigned on March 15 with a reported million-dollar payout.

The claims were first reported in the Murdoch media, but the Nine papers also weighed in, painting an unflattering picture of the culture at the television division and the apparent failure of senior executives and the Nine board to address it.

It was reported that non-disclosure agreements had been used to silence complainants and that the board and chief executive Mike Sneesby had been aware of complaints against Wick before agreeing to his large payout.

Nine chairman Peter Costello eventually resigned, after an incident in which he knocked over a Murdoch reporter who then accused him of assault. Sneesby survives, at least for now, but the whole affair has been damaging for the Nine boss.

Given that recent history, it is unsurprising that some suspected retribution in these latest job cuts. There were other factors, too, however.

Unlike the rest of the Nine empire, the publishing division is strongly unionised. The enterprise bargaining agreement (EBA) between the journalists’ union, the Media, Entertainment and Arts Alliance, and Nine was to expire on June 30. Negotiations on a new deal had stalled.

So when the message from Sneesby popped up on the computer terminals of all staff about 10.30am on Friday, June 28, announcing the job cuts, it fed suspicion that management was gunning particularly for the unionised publishing staff.

According to multiple sources, things got very intense, very fast. The United States presidential debate, the biggest news event in the world that day, continued playing on numerous monitors in the newsrooms but was largely ignored as reporters gathered in little knots of agitated conversation. They phoned and emailed colleagues not in the office that day.

Somewhere between 70 and 90 jobs were to go from publishing, and only 38 from television news and current affairs.

Hastily arranged “town hall” meetings between editors and staff only exacerbated the anger.

“It was pretty obvious the editors didn’t find out much before we did,” says one source. “And they didn’t really have much of an idea of the details.”

Early in the afternoon a national floor meeting of union members was held via Zoom, led out of Melbourne. It was very angry.

“There were some very, very emotional people,” says one person who took part. “Some were of the view that we should immediately walk out of the building.”

Instead, a resolution was put, expressing the “fury” of the staff of The Age, The Sydney Morning Herald, The Australian Financial Review, WAtoday and the Brisbane Times.

It continued: “We note the recent poor behaviour and cultural issues in other parts of the company, which has been widely reported, and the role that the independent reporting of the publishing division has played in upholding the reputation of the company’s news division.

“We demand an explanation from the company about why the publishing division appears to have been disproportionately targeted for job losses…

“We consider the announcement of the job cuts during [EBA] negotiations particularly poor and question whether the unionised part of the workforce at Nine has particularly been targeted.”

The resolution moved “no confidence in Nine chief executive Mike Sneesby and the Nine Entertainment Company board”.

It passed unanimously. The long-anticipated cultural conflict between the independent journalism of the former Fairfax and the new owners at Nine had been made real.

In a separate statement, the union announced it was beginning the process of organising a ballot for so-called “protected action”.

MEAA media acting director Michelle Rae later told The Saturday Paper the ballot will open on Wednesday, July 10, and run until July 19. There will be a mandatory conciliation on July 18.

In the meantime, negotiations are continuing over the new EBA. As it currently stands, the parties are a long way from agreement on several issues, including pay. The union wants a 6 per cent pay rise for each of the next three years; the company has offered 2 per cent, or 2.5 per cent if certain other concessions are made.

It will be a couple of weeks before it is clear if there will be industrial action, or what form that might take, but the anger among publishing staff remains extremely hot.

It is fuelled, says one source, by the view that the work of the publishing division has helped shield Nine from the worst of the troubles that afflict legacy media.

“Publishing is in relatively good shape,” he says. “Look at the half-year results, look at the full-year results. We’re making healthy profits. We have, like, 480,000 paid subscriptions.”

It is true Nine is travelling better than other media companies. Its value has fallen some 30 per cent in the past year, but its shares are still worth about $1.30 this week. You can pick up a share in Seven or Ten for less than 20 cents.

News Corp is performing strongly, but that’s because of its associated real estate business, not its journalism, says shareholder activist Stephen Mayne.

In his view, Nine’s publishing arm has a lot to do with that. “Nine runs a nicely balanced portfolio of assets: newspapers, the national TV network, the national radio network, the websites.”

The quality journalism, particularly investigative journalism, of the former Fairfax papers, amplified by the reach of Nine’s electronic outlets, is a reason it has done relatively better.

“Nine is managing decline relatively calmly, but the reality is still decline. For anyone in old media, it’s just a shit sandwich,” Mayne says.

“If you’re going to blame anyone, blame social media. Blame big American tech that has just laid waste to old media in Australia.”

In particular, blame Facebook’s parent company, Meta. According to Michelle Rae, the company’s decision not to renew paid content deals with local publishers, coupled with a tough economy and plunging advertising revenue, has made a “horror” situation for legacy media and their staff.

Last month Rupert Murdoch’s News Corp announced its biggest restructuring in a decade. It is yet to be revealed how many jobs will go, but the aim is to cut costs by $65 million.

Last week, Seven West Media, controlled by Western Australian billionaire Kerry Stokes, announced staff would be cut by 150, in pursuit of $100 million in savings.

Then came the Nine announcement that, says Rae, capped off what “I would consider one of the most harrowing weeks in journalism”.

In this context, the cuts at Nine are not so big – just 4 per cent of staff. The difference is that Nine is in comparatively good shape.

Back in February, it reported revenue for the six months to December of $1.411 billion, up 5 per cent, while net profit after tax was $190 million.

This was a decline of 16 per cent, due to increased costs, but still a pretty healthy return. The one section of the business in which revenue growth exceeded costs was publishing.

On Monday, the managing director of Nine Publishing, Tory Maguire, held another “town hall” meeting at company headquarters in Sydney. She fielded questions from staff who were there in person, as well as questions sent in from staff elsewhere in the country.

It did not go well. Staff were already “pissed off”, as one attendee put it, that Sneesby wasn’t there, having left for a holiday to Greece shortly after sending the email telling them 200 people would soon be out of a job. The mood did not improve when she pre-emptively told them she, too, was about to go on leave, to Fiji.

At one point, the source says, Maguire was asked why the cuts were necessary. What would happen if they were not made? Would the company not still be profitable, absent the Meta money?

It would, she said, but less so.

“Now in one sense, I understand what she’s saying,” says the source. “It’s a publicly listed company: you have to make a bigger profit every year, otherwise the share price declines. There’s pressure on the share price, blah, blah, blah. But that comment went down like a lead balloon. It was like, ‘We’re putting profits before people.’ ”

Maguire did little to flesh out the detail of where the cuts would fall. There was no more precise number than 70 to 90, nor was there a figure for exactly how much money the company was looking to save. It would be some weeks before it would be established who would be made redundant.

Beside her, Nine’s head of people and culture – publishing and digital, Michael Trafford, was fielding the questions flooding in on the Slack communication platform, including about whether unionised publishing staff were being targeted.

“Many of us sent that question,” says the source. “But it was only asked out loud once: was this payback?”

Maguire insisted it wasn’t, but the suspicion remains. As does the tagline, right under the mastheads: Independent. Always.