Media: Sydney's new boy gets tough: Robert Milliken on Conrad Black, the latest member of the Packer-Murdoch club

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The Independent Online
A year of relative calm under the control of Conrad Black, the Canadian press proprietor, has come to an abrupt end at the Fairfax newspaper group in Australia. The sacking of an editor led to a denunciation of Mr Black's style by one of his own columnists, and there has been a shareholder revolt over plans to award generous share options to directors and executives.

Mr Black won control of the Fairfax papers last December after a vigorous battle that also involved the Australian Kerry Packer and the Irish publisher Tony O'Reilly. The group's three main titles, the Sydney Morning Herald, the Age of Melbourne, and the Australian Financial Review, are among Australia's most influential and the world's most profitable newspapers, through their dominance of classified advertising. They are a valuable source of cash to Mr Black's operations in Britain, where he owns the Daily Telegraph, and North America.

After treading softly for 12 months, Mr Black is beginning to shake up the Fairfax organisation, as he did when he took over the Daily Telegraph six years ago. Staff cuts of 10 per cent are under way and since late October the editors of four leading titles in the group have been sacked, replaced or have resigned.

Such sudden turbulence was unheard of in the pre-Black era. For almost 150 years the group was controlled by the Fairfax family through its flagship, the Sydney Morning Herald, Australia's oldest paper.

The Fairfaxes were benign proprietors compared with their rivals in Australia, Rupert Murdoch and Mr Packer. They lost their empire in 1990 through an attempted takeover by Warwick Fairfax, a fifth-generation family member, which resulted in receivership and debts of almost dollars Aus1.5bn (pounds 680m).

The biggest shock under the new ownership came with the unexpected sacking a month ago of Gerard Noonan, editor of the Australian Financial Review for four years. No explanation was given. He was replaced by John Alexander, editor-in-chief of the Sydney Morning Herald. Since then the sober financial paper has undergone cosmetic changes to brighten its appearance.

The affair prompted Peter Robinson, a former editor of the Financial Review and one of Australia's most distinguished journalists, to write in his weekly column for the paper that the new owners had embarked on 'a wholesale effort to change the so-called Fairfax culture'. The Financial Review declined to print the column, which appeared instead in Mr Murdoch's national daily, the Australian.

Mr Robinson wrote: 'In places with a rougher culture - the Packer or Murdoch empires, for example - editors have traditionally been sacked without ceremony, and the results are evident in neurotic staff and fragmented reader relationships.' The Fairfax company's new board and management, he added, 'are now paying their dues to join tough and unsentimental guys in the Packer-Murdoch club'.

Although Mr Black in effect has control of the company, his shareholding is limited to 15 per cent by Australia's foreign ownership law. He has been lobbying the Labor government for a change in the rules to allow him to take more. Fairfax was refloated in May and its share price has increased by half since then. Despite the recession, the papers have performed strongly.

In September Mr Black appointed a new chief executive - Stephen Mulholland, a newspaper manager from South Africa with a legendary temper. A fortnight ago Mr Black himself strongly criticised unnamed Fairfax journalists. He spoke cryptically of 'Fairfax's much vaunted and, in general, justified traditions', but added: 'There are altogether too many by-lined writers for some of the Fairfax papers who have got into the, in my opinion, unprofessional and intolerable habit of tossing their own philosophical views in the midst of reporting on things. It is a straight question of imposition of editorial discipline.'

Mr Black was speaking in Sydney after the first Fairfax shareholders' meeting in five years. He was angry after shareholders forced the company to drop a plan to distribute 6.5 million share options among directors and executives. The revolt was led by Malcolm Turnbull, a Sydney merchant banker and lawyer who fell out with Mr Black after being a partner in the takeover. The meeting approved a less generous option scheme for employees.

Daniel Colson, a Canadian lawyer who oversaw Mr Black's takeover, now a Fairfax director, says he foresees more changes next year. It would seem that the last vestiges of the benevolent, moderate Fairfax regime are being blacked out.