Hagar Cohen: Fairfax has been forced to defend its newspaper fortress on multiple fronts. There was Google, online car sales, real estate, Facebook and YouTube. In 2004, the board asked online media proprietor and former Fairfax editor, Eric Beecher, for advice. He was taken aback by the attitude of the board.
Eric Beecher: I outlined to the Fairfax board what I described as a catastrophe scenario, which involved losing a decent chunk of their classified advertising, predominantly in the Sydney Morning Heraldand TheAge. And I sketched out how I thought this might happen—I didn’t say it would happen, but I said if this was my company I would ascribe a probability to whether or not this kind of catastrophe scenario could occur and if the probability was 20 per cent, let alone 60 or 80 per cent, then in my view that required them to take immediate action to broaden the base of the company, to become attackers as well as defenders, to really press the alarm button, because the trends were so obvious. And they chose to totally ignore that.
Hagar Cohen: So you felt that the board members at the time didn’t feel that the problem was urgent?
Eric Beecher: Well, that’s what they told me. Roger Corbett, who was then a board member and is now the chairman of the company, after I’d finished presenting everything to the board he stood up at the front of the board table and he picked up a quite fat edition of the Saturday Sydney Morning Heraldthat was sitting there. And he held it up in front of the board members and he said to them, ‘I don’t want anyone ever coming into this board room again telling us that people will buy cars or houses or look for jobs without this.’ And he thumped the big fat Saturday Sydney Morning Heraldon the board table. So he made his view very clear.
Hagar Cohen: Did that reaction surprise you?
Eric Beecher: It did. It really surprised me. It shocked me, because I was talking to them about risk mitigation and insurance. I was really saying to them, ‘Put a percentage possibility or probability on this happening and then decide whether or not you need to take action.’ And he was effectively saying a zero chance. In fact, the catastrophe scenario I outlined eight years ago was far less of a catastrophe than reality.