Stake in newspaper publisher could give 'world's richest woman' immense power to push agenda.
Will mining magnate Gina Rinehart have the last laugh?
SYDNEY // A cartoon in the Sydney Morning Herald in February depicted the Australian iron ore magnate Gina Rinehart - possibly the world's richest woman - reading a newspaper. The front-page headline stated: "Mining is good." The back-page headline declared: "Mining is perfect."
Four months on, Mrs Rinehart owns nearly 19 per cent of Fairfax Media, publisher of the 181-year-old Herald, and the cartoon seems less amusing.
Her steady acquisition of Fairfax shares has unsettled journalists at the Herald and its Melbourne sister paper, The Age, and prompted Australia's acting prime minister, Wayne Swan, to warn this week that it had "big implications for our democracy".
The fear of politicians and journalists alike is that the multi-billionaire - who is bitterly opposed to the Labor government's carbon tax on major polluters and to a new tax on the "super profits" of mining companies - will try to use the two venerable newspapers to influence public debate. She has reportedly demanded three seats on the Fairfax board and the right to hire and fire editors.
Amid the growing disquiet about her refusal to sign a charter of editorial independence, Stephen Conroy, the communications minister, said: "She's entitled to representation [on the board] but what she's not entitled to do is trash the brand." He added that if the newspapers became "just a pro-mining industry gazette", readers would desert en masse.
News on Monday that Mrs Rinehart had upped her stake again coincided with an announcement by Fairfax that 1,900 jobs are to be axed at the two flagship newspapers, in an effort to make the company more viable in a digital media age.
Like newspapers the world over, the Herald and Age have struggled to survive as readers and advertisers migrate to the internet. Over the past five years, Fairfax's share price has fallen by nearly 90 per cent. Now readers are to be charged for online content and the two broadsheets will shrink to a tabloid format.
The aim is to save 235 million Australian dollars (Dh880m) a year by 2015 - a paltry sum to Mrs Rinehart, who Forbes magazine valued in March at 18 billion Australian dollars (Dh66bn). Australia's BRW magazine goes further, estimating her fortune at 28.5bn, which would make her the world's richest woman, surpassing the Walmart heiress, Christy Walton.
Perth-based Mrs Rinehart inherited an ailing iron ore company from her father, Lang Hancock, and transformed Hancock Prospecting into a phenomenally successful company.
She rarely gives interviews and this year fought unsuccessfully to suppress details of a legal battle between her and three of her four children for control of the family trust.
She has said nothing about Fairfax, which owns more than 300 newspapers, 50 websites and 15 radio stations in Australia and New Zealand. However, a friend, John Singleton, told the Australian Broadcasting Corporation (ABC) that "editorial interference would have made the papers more readable in the past".
Margaret Simons, the director of the Centre for Advanced Journalism at the University of Melbourne, believes Mrs Rinehart is seeking status and power. She already owns 10 per cent of Channel Ten, a free-to-air TV network.
"She has learnt her lesson from fellow Western Australian entrepreneurs such as Kerry Stokes [owner of a TV network and Perth's daily newspaper] that a quick way to influence and gravitas is media ownership," said Ms Simons.
Michael Gawenda, a former editor-in-chief of The Age, agrees. "I can't imagine that she's buying into Fairfax on the basis that it's a business with a bright future," he said. "She wants to exercise some sort of influence within the public debate on issues that are close to her heart."
One of those issues is climate change, or the lack of it. She has appointed Ian Plimer, one of Australia's leading climate change sceptics, to the boards of three of her family companies.
The country's other main newspaper group, Rupert Murdoch's News Limited, which owns 70 per cent of Australian papers, also announced sweeping changes this week but declined to say how many jobs would be lost. Media commentators believe it may be as many as 1,500.
The Fairfax papers were once hugely profitable, thanks to their classified advertising sections - known as the "rivers of gold". But when advertisers moved online, the company was slow to adapt.
Mr Gawenda said: "In some ways you can argue that Gina Rinehart is a white knight. She's at least prepared to invest in Fairfax and no one else is, as far as I can see."
Kate McClymont, a respected Herald journalist, told the ABC: "For 180 years, Fairfax has been chronicling the life of this city, this state, this nation, and we have been doing so without fear or favour. All we ask is … to keep doing that."