Walker on Fairfax and the media
On December 17, Fairfax Media announced it would sell its remaining 51 per cent stake in TradeMe for a reported $616 million.
As a former Fairfax Media chairman, Walker keeps a close eye on the rapidly changing media landscape. He says downsizing Fairfax mastheads, The Age and Sydney Morning Herald, from broadsheet to tabloid next year won’t take readership from the Herald Sun because they are aimed at a different market.
Walker says the Internet won’t kill newspapers, but printed editions of Fairfax papers may be reduced from seven days to two, three or four days, perhaps Thursday-to-Sunday, to cut costs. The Fairfax board will continue to assess print performance after the pay-for-content model is introduced next year.
“I think there will always be some form of newspaper that people can shuffle around on a Saturday morning,” he says. “But I also think Fairfax Media will eventually be broken up, so shareholders get more value than a price languishing at 45 cents.” Fairfax shares closed at 45.5 cents on December 10.
Walker says his strategy at Fairfax was to broaden the revenue base through online offerings, such as the recently sold TradeMe, dating site RSVP and a “host of other internet services”. He says News Corporation founder Rupert Murdoch’s strategy to diversify out of newspapers years ago and establish cable television opened the company’s to multiple revenue and profit streams.
“Seventy-five per cent of Murdoch’s profits come from assets outside the newspaper business,” he says. “Even though I was no longer chairman, I screamed when Fairfax Media recently sold down Trade Me (to 51 per cent) to pay staff redundancies, or reduce debt (Walker was speaking before Saturday’s sale of the remainder of Trade Me).
“It was one of their key profitable assets.”
He believes mining magnate Gina Rinehart, as a substantial Fairfax Media shareholder, is entitled to board representation without having to sign up to a charter of editorial independence.
“I didn’t sign up and I never interfered with editorial control,” he says. “I think if she pledges her support for the journalists, the same as I did, then there’s no difference between her and me.”
Why the loss-making grand prix is great for Melbourne
Walker says 2013 will mark the 60th year since grand prix motor racing was first held at Albert Park. “And that’s a cause for celebration,” he says as chairman of the Australian Grand Prix Corporation.
He is also the public defender of an event that loses more than $50 million a year. But he argues the Formula 1 Grand Prix generates more than $140 million for the Victorian economy and provides a rare opportunity to advertise Melbourne to the rest of the world.
Walker says the Grand Prix attracts 25,000 overseas visitors, who along with interstate guests fill 80,000 hotel rooms, shop at exclusive boutiques and eat at fancy restaurants.
“More particularly, it’s the only free-to-air sports event in Australia that broadcasts direct to more than 400 million people across the globe,” he says.
Walker says $28 million, of the $54 million State Government subsidy, is spent on setting up and removing the infrastructure around Albert Park.
“Now if the race was held at Bob Jane’s Calder Park, you wouldn’t have the infrastructure costs,” he says. “But there’s no point in doing that because you wouldn’t be advertising the city, you would be advertising tree tops and that’s not what we do it for.”
He loves Melbourne and has done since starting a business making dishwashing detergents in “my backyard in Collingwood with a couple of 44-gallon drums and a paddle”.
“I love the enthusiasm of Melbourne people to get things done,” he says. “I love their energy, drive, focus and determination.
“I love the spirit of the people, who have a great passion for what they believe in, such as the arts, restaurants, more importantly their sport and their culture.”
Walker on Walker
Q: What is your favourite source of leadership inspiration and ideas?
A: I’m a great disciple of Robert Menzies and Winston Churchill because of their decision-making skills in the face of adversity. I like to see people prepared to make a decision in life and stick to it. That inspires me more than anything else.
Q: What two elements are critical to achieving change?
A: Listening to others. Making sure change is for the better and not for change’s sake.
Q: What important qualities do you look for in your direct reports?
A: Accuracy from the person writing it. A report should not be about pleasing the reader. It has to be accurate in explaining the facts, so it can be relied upon impeccably for honesty and integrity in the future.
Q: What makes a workforce productive or more productive?
A: An individual’s energy and drive. The ability to lead others in the pursuit of excellence.
Q: What is the one thing a leader should never do or say?
A: That’s up to the individual and how they operate. There’s no blueprint for that answer.
