Fairfax Media and News Corp agree to share printing services
Traditional rival newspaper publishers Fairfax Media and News Corp Australia have announced an agreement to share printing networks, in a cost-saving move designed to extend the future of daily print publishing.
In a statement to the Australian Stock Exchange on Wednesday, Fairfax Media chief executive Greg Hywood said the new arrangements would make the production of newspapers “more efficient for both publishers”.
“These are landmark initiatives. They demonstrate a rational approach to the complex issues facing the industry,” Mr Hywood said. “Better utilisation of existing print assets makes sense and will deliver economic benefits to Fairfax Media."
Fairfax, the owner of The Sydney Morning Herald and The Age, will see a full-year benefit of about $15 million from the end of the first half of fiscal 2019. Mr Hywood said the initiative would "enable us to produce newspapers well into the future".
In February, Mr Hywood flagged further “efficiencies”, noting advisers had been appointed to “pursue deeper strategic opportunities” around printing and distribution. The two companies previously collaborated with shared trucking and printing in Queensland.
News Corp is expected to provide printing services for Fairfax across NSW and Queensland, while Fairfax will print News Corp publications from its NSW-based North Richmond plant.
This will mean closing Fairfax’s print centres in NSW’s Beresfield and Queensland’s Ormiston after a transition period. It's understood about 120 staff, including permanents and casuals, could be affected by the closure of the two plants, with redeployment opportunities to be considered.
“Our decision to rationalise some printing assets reduces capital intensity,” Mr Hywood said. “From today we are consulting with staff at our printing centres affected by the new arrangements.”
News Corp Australasia executive chairman Michael Miller said in a statement the commercial deal provided scale and efficiency and made better use of its existing print facilities.
“As a publisher, we have absolute confidence in the ongoing significance of newspapers. Within this framework, we need to continue to look at the most effective and efficient ways to produce newspapers,” Mr Miller said.
He said talks continued in addition to the NSW and Queensland agreement, which starts this month.
Neither publisher’s content is affected by the agreement, with no impact expected for readers in terms of the availability of titles.