In a deal that confirms the financial viability of published newspapers remains pressured, Fairfax Media and News Corporation Australia have agreed to share their printing sites, which will see a number of plants ultimately close.
The historic announcement – on the back of years of staff cutbacks and efficiencies at both media empires – will see the traditional rivals use each other’s printing networks, with Fairfax presses in Beresfield NSW and Ormiston in Queensland closing after the transition.
In a statement to the ASX this morning, Fairfax Media chief executive Greg Hywood said the sharing arrangement would save the company $15 million in the latter half of the 2019 financial year.
“The printing arrangements make the production of newspapers more efficient for both publishers. These are landmark initiatives,” Mr Hywood said.
“They demonstrate a rational approach to the complex issues facing the industry.”
Newspapers and other older media are faced with an advertising revenue collapse due to the growing dominance of digital giants Google, Facebook and Amazon.
Both Fairfax Media and News Corp have shed thousands of jobs in recent years to find efficiencies in the face of the advertising decline and changing reader habits.
Despite the latest landmark changes, Mr Hywood said the deal would not change the availability or distribution of Fairfax Media newspapers but “enable us to produce newspapers well into the future”.
In recent years, when questioned about the future of published editions of key metropolitan mastheads, Mr Hywood has said weekday editions of The Age and The Sydney Morning Herald would continue to be printed as long as they remain profitable.
News Corp Australasia executive chairman Michael Miller said the deal with Fairfax demonstrates confidence in the future of printed newspapers.
“As a publisher, we have absolute confidence in the ongoing significance of newspapers,” he said.
Within this framework, we need to continue to look at the most effective and efficient ways to produce newspapers.
“This is a commercial deal which makes commercial sense by enabling better use of our existing print facilities.”
Under the deal, News Corp will provide printing services for Fairfax in NSW and Queensland, while Fairfax will publish News Corp publications out of its North Richmond plant in NSW.
Mr Hywood said the company was consulting with Fairfax staff who would be affected by the new arrangements and would be providing “comprehensive support and assistance” to meet employment obligations.
The sharing deal had been anticipated after years of discussions confirmed by both Fairfax Media and News Corp in recent financial results.
Fairfax Media shares rose 3.9 per cent to 79.5 cents after the sharing agreement was announced.