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Paper boy

By Andrea Fox

Saturday 1st November 2003

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Brian Evans is sure he is being watched.
But the chief executive of Fairfax New Zealand expected it. "We've paid a lot of money - but a fair amount of money, far cheaper than anything we could buy in Australia. People are watching," says the Australian now calling the shots at New Zealand's biggest publishing stable, formerly Rupert Murdoch's Independent Newspapers (INL).

So who are the watchers? They are the readers of the two metropolitan daily newspapers, two Sunday papers, seven regional dailies, 61 suburban and community newspapers and 13 magazines purchased by Fairfax for $NZ1.2 billion on July 1. They are Fairfax's 2600 staff, the sharemarket, the advertising market and everyone interested in the media.

Almost all the watchers are fearful - about price rises, cost cutting, job losses, and more restructuring. Staff are watching for Evans to bring on his promised "group drive" of the business, instead of INL's "silo" operating style. They fear facsimile world news and sports pages across the stable, and out-of-work sub-editors and production staff. And they are watching for the Evans blowtorch, now creating heat in the publisher's sales and marketing departments, to be turned on the newsrooms.

Nearly everyone has been watching also for a Fairfax blood transfusion at the Sunday Star Times. Their curiosity was quenched on October 1 with the announcement of Cate Brett, deputy editor of The Press in Christchurch, as its new editor. The paper and its sister publication Sunday News combined have 350,000 sales a weekend - 100,000 more than Auckland's Weekend Herald - and, according to Evans, are the only national newspapers that can truly claim the title.

The way Evans talks, most of the angst is groundless. His big knife, if he has one, is sheathed, as Fairfax New Zealand enjoys a strong start to the year, with revenues 8% up on the same time last year and advertising yields on the rise. Costs are substantially down. As a subsidiary of John Fairfax Australia, the business does not have the same board and head office costs as INL did, and thanks to the decision of 130 INL staff to take redundancy the new owner has saved $3 million a year.

The Fairfax group recently posted a 134% rise in net profit to $A125.5 million for the 2003 year. The New Zealand business is confident it will meet its forecast of $130 million earnings before interest, tax, depreciation and amortisation for the 2004 year.

"It's a case of looking at the back office, the spine of the business. It's not about touching the mastheads as readers see them, but we want to look behind the mastheads. To see what we can do to reduce our costs and get synergies and opportunities."

In line with the departure from what Evans calls INL's silo mentality, "a lot" of money will be spent on a common technology system - so a staffer from Timaru can walk into the Wellington office and use familiar technology. Money will also be devoted to energising INL's oddly-named Stuff website. The resources and technology of Fairfax's successful Australian website F2 will be tapped to build an Australasian business, Evans says.

A new business paper is also on the menu. There is demand for a strong paper that reflects the increasingly transtasman nature of business, Evans says. Fairfax, itself a transtasman business, will probably develop the Australian Financial Review, which it already sells here in small numbers, he suggests.

But for now, Evans, who has nearly 30 years in sales and marketing, is muscling up that side of the business and implementing the group driven policy. "There will be some sharing of content which will be good for everybody, some quality sharing, and even across New Zealand more sharing of text and news. The backbone of the business is really the accounts side and the systems side and purchasing power."

Editors would tell you the sale to Australia's oldest publishing company had made no difference at all, he says. "This is a very proud, successful Kiwi business. It would be wrong of us to even consider we are going to turn this into a Fairfax Australia company."

Nevertheless, Fairfax has had some bad press back home recently. Media tycoon Kerry Packer's The Bulletin has been less than respectful about Fairfax Holdings chief executive Fred Hilmer's management and performance, noting that he and his board have no experience in newspapers. The suggestion is that once august newspapers like the Melbourne Age are being run into the ground as a result.

Evans rejects the criticism. "Some of that banter in Australia has nothing to do with publishing. It's got something to do with other things. It's a very competitive business. Fairfax is so strong in those areas we shouldn't be questioned, but because we are an independent company technically and because we are traded on the sharemarket, we are fair game."

Evans believes Fairfax's label as a cost cutter is the result of it having to take a knife to its "mature products", The Age and Sydney Morning Herald, in recent years, where costs were said to be too high. "Most people would say, if they are being fair and open about it, Fairfax as a company really does stand up for editorial quality."

That quality is aplenty in New Zealand, according to Evans, and meant Fairfax never seriously considered appointing an Australian or an English import to the editor's chair at the Sunday Star Times. Brett would be given "a very strong brief" on the direction Fairfax wants the paper to go. Sunday papers are "taking a while to catch on" in New Zealand, he says. But a merger of the two Sundays isn't the answer to strengthening the product - they have entirely different markets, with only a 15% cross over.

Contrary to speculation, the magazine stable, which includes the hugely popular thoroughbreds Cuisine and NZ House and Garden, is not for sale, he says. And, while Fairfax may be a newspaper breeder, Evans says it is not blinkered to the revenue opportunities in titles such as the TV Guide, New Zealand's most read magazine, with 100,000 readers a week.

Media watcher Jim Tully, head of mass communication and journalism at Canterbury University, expects some rationalisation of production, but worries that too much - for example bringing in uniform world news pages - will lead to loss of identity and diversity of views. He looks forward to copy flow from Australia and is hopeful Fairfax will bring its much-admired in-house training and development programme here. Doors could open for New Zealand journalists across the Tasman.

Brian Evans arrived with a reputation as a hatchet man, but he is a much warmer proposition than his two INL predecessors, Peter Wylie and Tom Mockridge. He's also insightful. He believes newspapers are "the last bastions" of business continuity in communities; "father figures" that stick around long after other businesses have vanished.

"We can be critical or very positive. Sometimes we have to be a bit of both. If a newspaper does its job well the community flourishes."

Newspapers will hold their own in the future but will need to be very concise and to the point, he says. "Editorial needs to look at what they are writing because people are time poor. Overseas, newspapers that have reduced the size of their paging are doing well, while those that are getting bigger are losing readers. In Australian cities I think you are going to see the major metros coming back to be more a true news source than an advertising medium.
"But in New Zealand we are the voice of the community."

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