Posted by Tom Foremski - July 6, 2012
BBC News reports that mining mogul Gina Rinehart, one of the world's richest people, has reduced her stake in troubled Fairfax Media, Australia's second largest media group.
Ms Rinehart, whose wealth is estimated at more than $29 billion, has been trying to win control of three board seats at Fairfax, and wants control over the hiring and firing of editors. Her goal is to oppose the Australian government from pursuing mining and carbon tax plans that could protect the environment at the expense of her iron-ore mining business.
She has acted to take advantage of a much weakened Fairfax, which missed revenue targets and recently said it would cut 1900 jobs, nearly 20% of its workforce.
However, her reduced stake in Fairfax does not mean she has lost interest in the company but likely signals a change in tactics.
Fairfax Media's insurance policy, which is common among companies in Australia, does not protect directors who own more than a 15% stake in the company from potential lawsuits.
Ms Rinehart's 18.67% stake prevented her being covered by that policy and, according to her firm, was working against her bid for seats on the board.
Australia's acting Prime Minister Wayne Swans, said Ms Rinehart's bid for Fairfax board seats could have "very big implications for our democracy, we should all be very concerned."
Foremski's Take: The Australian Broadcast Corporation recently asked me to take part in a debate about the consequences of Fairfax laying off hundreds of top journalists. My position was that it was very bad news for Australia because it will allow special interest groups to become more successful in promoting their agendas.
The same is true in the US, and elsewhere. Our society's ideas are mediated, they are formed and distributed via our media. If that media is weakened then the ideas of special interest groups are much more likely to run unmediated.
Yet this problem of the decimation of journalists worldwide seems poorly understood.
In SIlicon Valley, for example, the techie culture looks down on journalists as being gatekeepers, preventing stories and information from being published. And that it is their fault that their profession is being destroyed because they ignored the blogging "revolution" and the rise of news aggregators.
This is a misunderstanding of the role of journalists as society's watchdogs, and their essential job in bringing attention to the harmful actions of well financed special interest groups.
Australia provides us with a startingly clear example of this process at work. The weakened Fairfax is an irresistible target for Ms Rinehart and her pro-mining allies, which have attempted to portray her actions as a "white knight" riding to the aid of the troubled media company.
It's a perfect illustration of my point:
Special interest groups will gladly support the media they want us to read. But we are losing the media we need to read -- independent and vigilant.
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