Not all is gloom and doom as the local newspaper industry adjusts to Australia’s ‘two-speed’ economy (writes Peter Coleman). 

Recent days have seen the leak of internal memos concerning planned cuts for both Fairfax Media and News Limited, yet – despite the headlines – neither brings any surprise.

Conflicting reports about plans for the two publishers to share printing facilities in Sydney – where they have adjoining plants in suburban Chullora – have been current for months. Word from News Corporation chairman Rupert Murdoch that there were “no plans to rationalise printing operations” within News in Australia, and that they didn’t have spare capacity seemed at odds with what we’d heard elsewhere.

Now a memo leaked to ‘Crikey’ suggests a freeze on replacements and new hirings as News Limited strives to cut 15-20 per cent of costs over the next three years. This on top of previous budget plans which were already pitched at reducing costs.

But the memo from chief financial officer Stephen Rue indicates that spending will increase in digital market areas. News will seek to maximise cash flow from printed newspapers to support heavy investment in “a new digital business”.

Rue also warns of underspending on marketing “given the poor circulation sales of late”.

Across at Fairfax, it’s Paul Peters apparently with the red face after a memo of his was also leaked to Crikey. No need for red faces however, with Peters – who is general manager at the Chullora site – briefing staff on what they already knew… that plant sharing with News would lead to a loss of jobs, and that if it didn’t happen, an alternative plan would be needed.

GXpress sought a comment from web printing and logistics chief executive Bob Lockley on this and the interesting prospect of a “smaller Fairfax-owned new site” mentioned in the email, but has not received a reply.

No opportunity therefore, to quiz him on talk within the industry that Fairfax might decommission a press from Chullora and send it over to their Auckland, New Zealand, site… where, I’m told it would be way too big for their needs.

Fairfax’s print sites in Chullora and Tullamarine (Melbourne) both have relatively little relevance to the scale of the newspaper industry as it now exists, but can it really be that considerations such as Sydney’s industrial culture would justify a new ‘greenfield’ site rather than tailoring of the existing one to fit?

But as I mentioned, not all is gloom and doom… and I’m not referring to the upbeat reports from Chennai: Newspaper business in Australia is good enough for Irish telecommunications billionaire Denis O’Brien to put more of his cash into APN News & Media – which he regards as “the jewel in the crown” –  than is already tied up indirectly through his holding in Independent News & Media.

With share prices at their current level, Fairfax might also be worth a punt, either for O’Brien or – as we suggested earlier – Seven West’s Kerry Stokes. Even Mark Day in the ‘Australian’ was seen this week to note that it could be good value.