Stuff to sell or close 28 community and rural newspapers

Wednesday, 21 February 2018

Fairfax Media chief executive Greg Hywood said the company had to sustain its earnings and Stuff's print cuts had been predicted.

Stuff is planning to sell or close some of its smaller community and rural papers in a move that could affect 60 jobs.

Chief executive Sinead Boucher said on Wednesday that 28 mastheads would be affected, while reiterating Stuff's plans to grow its digital business.

About 60 jobs could be affected by print publication cuts at Stuff.

The company was still working through plans for each of the titles and consultation with staff would occur over coming weeks, she said.

Greg Hywood, chief executive of Australian parent company Fairfax Media, noted that the company had warned that its New Zealand business would go into 'consolidation mode' if the Commerce Commission did not approve its proposed merger with rival publisher NZME.

Sinead Boucher said the closures would happen over about six months.

* NZME and Stuff to appeal merger ruling to Court of Appeal

* Fairfax grows profit, but revenues slip**

'We predicted this outcome. We said that ultimately there would have to be rationalisation in the industry and the best way of sustaining journalism was to allow the merger to go ahead.'

But he stopped short of blaming the sales or closures on the commission, saying it was 'hypothetical' whether they would have happened anyway, had the merger gone ahead.

'The business has to sustain its earnings and if there are parts that aren't doing their bit we have to make the decision to rationalise them and that is what we have done.'

Asked whether there might be more cuts, Hywood said the world was clearly going through a period of 'print to digital'.

'We will make decisions on a publication by publication-basis about whether they are adding value to the business or not.'

Boucher emphasised the changing nature of the business.

'Our strategy is focused on achieving a business model where digital revenue growth outweighs declines in print, so we can maintain a strong national footprint to serve our New Zealand communities with our quality journalism, content and great experiences,' she said.

'The Stuff business is delivering strong digital revenue growth, benefiting from the growth of our new business ventures.

'This is providing some offset to ongoing print advertising challenges, however we need to continue to act decisively in transitioning our business model into an increasingly digital business.'

The sales or closures are expected to happen over the next six months.

Boucher said Stuff had stepped up its consideration of the future of the papers in question over recent weeks.

There were already expressions of interest for some of the papers, she said.

They make up about 35 per cent of Stuff's print titles but The Kaikoura Star is the only paid newspaper affected.

E tu spokesman Sam Gribben said the union had decided to consult with members to get a fuller picture of the changes before commenting.

Stuff, Fairfax Media and NZME have sought leave to appeal the Commerce Commission's decision not to grant clearance for the Stuff/NZME merger at the Court of Appeal, after the regulator's ruling was upheld by the High Court.

The commission has said it will not oppose leave to appeal, paving the way for a hearing that NZME believed would take place before July and a new ruling later this year.

Fairfax Media reported on Wednesday that its net profit for the six months to the end of December fell by more than half to A$38.5 million (NZ$41m) with its 'underlying' profit for the period down 10 per cent at A$76m.

Locally, Stuff's revenues fell 5 per cent to NZ$160m, as 33 per cent growth in its digital revenues failed to offset a decline in print advertising.

Its operating profit fell 24 per cent to NZ$21m – a decline of 15 per cent after the impact of one-off items and its investment in internet provider Stuff Fibre were excluded.

Fairfax Media shares were trading up 3 per cent at A$0.68 in afternoon trading on the ASX in the wake of the result.

Boucher said the growth in digital revenues validated the company's strategy.

'We're really encouraged by the success of businesses like Neighbourly and Stuff Fibre.'

Affected papers:

Avenues

Waikato Farmer

Admire Marlborough

NZ Dairy Farmer

Discover Magazine

Selwyn and Ashburton Outlook

Admire Nelson

Hastings Mail

Christchurch Mail

Napier Mail

The Tribune

Kaikoura Star

Invercargill Eye

Auto Xtra

South Canterbury Herald

Clutha Leader

Waiheke Marketplace

NewsLink

Wairarapa News

Queenstown Mirror

NZ Farmer

Waitaki Herald

Canterbury Farmer

North Waikato News

Central District Farmer

Rotorua Review

Otago Southland Farmer

Ruapehu Press