Speculation has circled since Rinehart first took a slice of Fairfax in 2010 that she would use her influence to steer editorial direction, particularly in the wake of the government’s mining tax legislation.
As Fairfax cut nearly 2000 jobs yesterday, Rinehart upped her stake from 12.6% to 18.7% through Hancock Prospecting and has reportedly requested three board seats, including the deputy chairman role, as well as the right to hire and fire editors.
The Australian Financial Review, a Fairfax newspaper, reported that directors were expected to oppose the move but chairman Roger Corbett may be prepared to offer her two seats on the board.
Minister for Communications Stephen Conroy told Radio National this morning that Rinehart was entitled to board representation but she was not entitled to trash the Fairfax brand.
“If Rinehart wants to turn it into the mining gazette, well Ms Rinehart's entitled to, but the shareholders, the other 80 per cent, the 80 per cent of shareholders who will see the share price fall, need to know that that's what's behind it,” he said.
Shadow Communications Minister Malcolm Turnbull warned that making Fairfax a spokesvehicle for the mining industry would undermine its business.
“Reputation and a sense that people are not being given a particular line from a vested interest is absolutely vital for the credibility of a media outlet,” he told ABC News 24.
The Greens have also spoken out about the move, with Senator Scott Ludlam saying Rinehart’s increased stake, as well as the job losses, made it a very bad week for media diversity and independence.
His colleague deputy leader Adam Bandt said the situation was reaching crisis point.
“When you look at the reasons Gina Rinehart has given for wanting to come in and own part of Fairfax, it is clearly about influencing public debate,” he said.
“One of the things that has become clear according to some of the reports I’ve read, is that she’s not yet willing to accept that there’s a distinction between ownership and editorial control and hasn’t been willing to sign up to the longstanding understanding that you don’t mess with editorial control.
“If the situation in Australia becomes one where if you have a lot of money you can pick out the loose change down the couch and use it to buy up a newspaper, then we are in a very worrying state as a democracy and that’s what concerns me.”
Business Spectator’ Alan Kohler described “carelessly rich” Rinehart’s move as “absurd and uncomprehending”
At this stage it remains unclear what effect, if any, the push into media will have on Rinehart’s mining interests.
As Aspermont contributor Tim Treadgold points out in the upcoming issue of Australia’s Mining Monthly, media investment is not a new thing for Rinehart’s family as her father Lang Hancock was a media investor himself.
“The difference is that Rinehart is doing similar things on a far grander scale,” Treadgold writes in the July edition, out early next month.
“The mine plans are bigger and the media investment has gone from Hancock’s financial support for trade magazines and a short-lived Sunday newspaper in Perth to Rinehart’s investments in the Channel 10 television network and Fairfax Media, where she is seeking board representation.”
This article first appeared in ILN's sister publication MiningNews.net.
