Hywood makes a last pitch to young people to get into journalism, and says the quality has never been higher.
He says many will get jobs, and “it’s incredibly exciting”, and media companies train people.
That’s where we’ll leave the inquiry for now. Stay tuned to the Guardian Australia homepage for further coverage.
Updated
Lisa Singh suggests the timing of the redundancies and TPG’s bid is “convenient”.
Greg Hywood rejects the suggestion, and says the cuts were a long time in the making.
Mastheads need to stay in their communities for as long as possible, says Hywood. Fairfax is shaping long-term decisions around that.
Nick Xenophon asks when the executive or board became aware of the TPG bid.
Hywood:
All I can say to that is you don’t know until you get the letter.
Xenophon:
So no hints?
Hywood:
You don’t know anything is happening before it’s in writing.
Updated
Hywood is asked if employee entitlements will remain if TPG buys Fairfax.
He doesn’t answer. Dastyari says TPG was invited to appear before the inquiry but didn’t respond, and he suggests they could summons the company.
Dastyari says four big ideas have emerged:
- Taxation arrangements for Google and Facebook
- What kind of taxation incentives can be created – eg a R&D-style structure with tax write-offs
- Charity status of making donations to journalism causes, and if it should extend to subscriptions
- Issues with the ABC and its digital traffic
Updated
Senator James Paterson takes over questioning, and makes a crack about the number of questions about Hywood’s pay rather than the topic of public interest journalism.
He asks if the passage of reforms on media ownership will help or hinder.
Hywood says anything that helps media companies maximise their scope and scale is good.
The clock is ticking on this. Let’s not look at the world through the prism of the late 80s and early 90s, let’s look at what the right legislative environment for now is.
He notes concerns about who might get power at the end of the reforms, perhaps thinking of rival News Corp, but says Fairfax isn’t worried.
Updated
Hywood says he still believes Fairfax will be printing papers for “years to come”, and the decision to shut down two large presses in Sydney and Melbourne saved the company and is the reason Fairfax is here now.
Hywood says the company has been working for years to get metro publications towards a sustainable place in the market, and he hopes the 125 jobs are the last round of redundancies.
The inquiry is getting descriptive.
Senator Kitching asks Hywood whether some Fairfax staff call him “the Marie Antoinette of Fairfax” #PIJ
— Mark Di Stefano 🤙🏻 (@MarkDiStef) May 17, 2017
Do you guys?
Sen: there is concern that you have driven off the cliff in your Maserati... #PIJ
— Michael West (@MichaelWestBiz) May 17, 2017
Hywood says Fairfax has consistently asked for the two out of three rule on media ownership to change so the industry can effectively compete.
Google and Facebook have an advantage in the media and advertising space, he says. The ABC is also a problem.
"The ABC has gone into the provision of free news online," Hywood says, criticising public broadcaster for using $$ to drive traffic
— Shalailah Medhora (@shalailah) May 17, 2017
Hywood says if ABC News was not a popular, high traffic website, no problem, it still fulfills its mandate #PIJ
— Mark Di Stefano 🤙🏻 (@MarkDiStef) May 17, 2017
Updated
Hywood refuses to talk about the TPG bid.
This is an issue in front of the board at the moment.
Updated
Sam Dastyari and Nick Xenophon are getting frustrated with Greg Hywood avoiding questions about his pay packet.
Dastyari:
No one’s saying it was against the rules. What did you get paid last year?
Hywood:
That’s not appropriate. This is an inquiry about the future of journalism.
He tells Xenophon the executive team at Fairfax are committed to ensuring mastheads stay in their communities. At the same time they have built Domain into the business it is now, and focused on the other businesses within the company.
They have been offered the sort of incentive arrangements that are vary common across the board of ASX-listed companies of this size.
Updated
Guardian Australia’s political editor has weighed in on Hywood’s earlier comments about diversity.
As a working journalist, I can tell you without a second's hesitation that ownership matters & diversity matters #PIJ
— Katharine Murphy (@murpharoo) May 17, 2017
Fairfax has been at the forefront of diversity campaigns in this country for 20 years. For a good reason #PIJ
— Katharine Murphy (@murpharoo) May 17, 2017
Viability is crucial, obviously. But diversity is also crucial #PIJ
— Katharine Murphy (@murpharoo) May 17, 2017
This is an interesting exchange which goes some way to the heart of at least Fairfax’s specific problems.
Under Fairfax direction, editorial mastheads have to be self-supporting, and they have also supported Domain. But Ludlam says Domain doesn’t support mastheads.
Hywood defends Domain, saying the money it makes sustains the whole company, which keeps mastheads in the company, even though the mastheads have to pay their own way.
Ludlam notes this seems to be a contradiction. As a “complete outsider” this is how it looks to Ludlam:
We have some quite profitable businesses that have been spun off, raking in enormous revenues and profits, and we have the editorial parts of the business being slowly starved to death.
The money which used to be cross-subsidised out of advertising when it used to be a huge cash cow business, that used to be used to support the existence of the newsroom. But that money is now in separate entities that are making enormous profits for the shareholders and newsrooms are starving to death.
Ludlam asks twice how much money Domain gives to newsrooms with its “support”.
Hywood says it’s not about money. Ludlam asks if it’s “moral support” instead.
Hywood says shareholders support the company and if they see mastheads supporting Domain and Stan, they invest more in the company.
Updated
Greg Hywood disagrees with Scott Ludlam that diversity of media is hugely under threat.
He says “journalists are very independent beings by nature”, who “want to work for the community good rather than the company good”, even in one-paper towns.
Ludlam says Hywood isn’t answering his questions, and notes that 4,000 working staff across community and metro papers have been sacked since 2000.
Hywood:
You don’t necessarily have to have a multitude of publications to have scrutiny of those institutions. It’s not so much who owns the organisation, as long as you’ve got at-scale journalism in your community you’re going to get decent scrutiny.
Ludlam “strongly” disagrees, and says if Fairfax went to the wall and Australia was left with News Corp as the only big player, we’d all be in trouble.
Ownership doesn't matter, says Greg Hywood to the journalism inquiry. Ummm, wut?
— Katharine Murphy (@murpharoo) May 17, 2017
Updated
Greg Hywood says “media speculation” about his salary and options is not correct. He declines to correct the record verbally but says it is in Fairfax’s annual report.
Sam Dastyari asks then how media got it wrong, if they were presumably reporting from those reports.
Hywood says his base salary is $1.6m, “a very, very healthy income”. Short-term and long-term incentives are based on different goals.
He doesn’t want to say what his bonuses have been, and there’s a bit of back and forth with senators. Scott Ludlam says he’s “not here to debate the merits of capitalism”, but Hywood could correct the media reports which he has said are incorrect.
Hywood suggests that isn’t the point of the Senate inquiry.
Updated
Keeping companies profitable is the key, Greg Hywood says again. By keeping media outlets in the black, shareholders are happy to support them.
Journalism is the core of the business, he says. It brings the readers, which brings the advertisers, and which helps create other products such as Domain and Stan, which bring money to support journalism.
Lisa Singh returns to her original question about his pay packet and bonuses.
Would senior management be taking a 25% pay cut at Fairfax, as I understand has been suggested by editorial staff?
Hywood:
We pride ourselves on providing above-market salaries. We need good people to work at this business. You don’t fix the issues confronting the media business by doing the same thing again and again, and expecting a different result ... You have to think your way through these issues.
Singh says he’s doing exactly what managers have done in the past – slashing jobs.
Hywood says as a matter of principle you have to pay people market rates to get the best results.
So, no, executives won’t be taking the pay cut.
Updated
Senator Lisa Singh goes straight for the Fairfax executive bonus scheme, approved last year. She asks Greg Hywood if the job cuts will help him get this year’s bonus.
“Everyone at Fairfax is paid appropriately,” he says, adding that executive salaries are based on market rates.
Long-term bonuses are based on the share price of the company, which has been driven by the success of Domain, whose value has grown from about $200m to more than $2bn, he says.
Short-term bonuses are based on yearly earnings and annual budgets, and he hasn’t had one in some years.
Asked about this report that he received as much as $7.2m last year, Hywood says there are different bonuses.
Singh asks again.
He says his bonuses tend to be based around the earnings of the company and there are “no specific incentive based around laying off journalists, and nor should there be”.
Updated
Tax breaks and other “bits and pieces” aren’t going to fix the fundamental problem of media companies needing to compete effectively, Greg Hywood says.
He’s against the European model of providing government grants to journalism because he says it creates “obligations”.
Hywood, on role of government intervention in journalism: "What we don't want is handouts. What handouts do is provide obligations." #PIJ
— Lisa Visentin (@LisaVisentin) May 17, 2017
Anything thru the tax system where there's no direct obligation in return for industry support is preferable says Hywood #PIJ
— Rosie Williams (@Info_Aus) May 17, 2017
Updated
Hywood says there are many more editorial staff at Fairfax papers than in the 1970s, and he’s noting the creation of extra businesses, such as Domain, to support the journalism, as well as difficult business decisions made in recent years.
He says only 10% to 15% of business decisions made in the past five years have affected frontline reporting roles.
The result is a small but fit-for-purpose publishing business.
He’s also hitting out at the ABC, who “pay Google using taxpayers’ money” – which gets their stories ranking higher and restricts audience who would otherwise find stories from companies such as Fairfax.
We believe the biggest threat to quality journalism in this country is unprofitable local media companies.
Updated
Greg Hywood is now up. Sam Dastyari thanks him for making time at short notice to appear.
The Fairfax boss is giving an opening statement:
It has never been our belief that commercial enterprises should be supported by government, but we do believe in a regulatory environment. Our intention today is to highlight the commercial realities facing Australian media.
He says the internet has “significantly disrupted” the traditional media role, fragmenting audiences and taking away the advertising revenue, as people increasingly access classified ads for free, and give rise to aggregators such as Google and Facebook.
This has halved the advertising revenue for publishers in just five years and Fairfax would have been out of business had the trajectory continued, says Hywood.
So it has reshaped its business, and continues to innovate and “invest deeply in quality journalism”.
Updated
Hywood and Murphy chatted amicably for a few minutes and then shared a joke about it being a classic Dastyari stunt.
“It was a good stunt,” Hywood said.
Updated
Senator Sam Dastyari is trying to play matchmaker with the head of the media union and the head of Fairfax.
My colleague, Amanda Meade, has been following the morning’s developments with the head of the Media Entertainment and Arts Alliance, Paul Murphy.
Under questioning from Dastyari and Senator Nick Xenophon, Murphy said if Fairfax Media was broken up and weakened it would be disastrous for journalism in Australia, Meade reports.
Asked by Dastyari what the consequences were if the government didn’t intervene in media reform, Murphy responded:
We lose all the vibrancy and the power of public interest journalism in this country. we see an increase in concentration of ownership of Australian-based companies, resulting in further job losses and fewer voices.
Fewer journalists means fewer stories, there’s no way around it ... and increases the risk people turn to unreliable sources peddling fake news.
It would be a disastrous consequence. We can’t rely on the market to fix this ... The government must pursue a reform agenda.
Dastyari said he was shocked to hear that the MEAA chief executive had not met Hywood for some years, and suggested they have a coffee in the break. He said the senators could chip in 80 cents each to buy the coffees.
It appears to have worked, in a way.
Hywood now chatting casually about the future of journalism with @withMEAA chief Paul Murphy and @samdastyari
— amanda meade (@meadea) May 17, 2017
Updated
Good morning and welcome to our live coverage of the Senate inquiry into public interest journalism.
The chief executive of Fairfax Media, Greg Hywood, is about to appear. Fairfax has just announced that 125 editorial jobs are to be lost, sparking a week-long strike by staff from major mastheads, and which included coverage of the federal budget.
Paul Murphy, the head of the MEAA union, earlier told the inquiry that Hywood had “not in recent years” sat down with him to discuss the impact of workplace cuts on Fairfax. Murphy said he had sought meetings with Hywood.
Senator Sam Dastyari is trying to set up a coffee catch-up between MEAA’s Paul Murphy and Greg Hywood… which is all very awkward #PIJ
— Mark Di Stefano 🤙🏻 (@MarkDiStef) May 17, 2017
I’ll take you through the submissions and questions from Hywood’s appearance, which may also cover news of a $2.7bn offer from TPG Capital and Ontario Teachers’ Pension Plan consortium to buy Fairfax outright.
Updated
