<em>Illustration: michaelmucci.com</em>

Illustration: michaelmucci.com

Here is a combat zone.

ABC TV, Q&A,

May 28:

Tony Jones (host): ''We've got a Facebook question … Why is Gina Rinehart so greedy?''

David Marr: '' … she's humiliating herself and her family in the courts … This is amazingly perverse behaviour … she seems to be willing to appear greedy … [and] brutally cruel to her own family … ''

Barry Humphries: ''I am not drawn to Gina. I mean, if I woke up in a motel with her on the next pillow I would … be very surprised. But then I don't like her family very much either.''

Miriam Margolyes: ''It's very difficult, isn't it, because, poor woman, she is not a beauty and I am not a beauty either so I know what it's like to be fat and ugly … ''

John Hewson: ''I find it very difficult to understand people like Gina Rinehart … I think you have a responsibility to put a bit back beyond what you've taken out.''

Q&A, June 4:

The Greens leader, Senator Christine Milne: ''Gina Rinehart had asked to lower the English language literacy standards for people being brought in. That's been something that unions have fought for 100 years for decent occupational health and safety standards … ''

June 7, the union house committees of the Herald, The Age and Australian Financial Review write to Rinehart urging her to support a charter of editorial independence which gives full editorial control to editors.

Q&A, June 11:

Julia Gillard: ''Gina Rinehart … got involved in a political debate … It's the right time to share a bit more from mining with other people around the nation … They said they didn't want to pay any more tax.''

The Herald, June 23, front page: ''[Rinehart has] a voracious appetite for litigation … ''

The Herald, Weekend Business opinion headline, June 23: ''Rinehart might influence people but she's winning few friends in doing so.''

The Herald, News Review, June 23: ''Former prime minister Malcolm Fraser believes this exercise of power is a frightening prospect for Australia. 'The idea that you can buy what you want is becoming pervasive and Rinehart seems to think politics and politicians are for sale.'''

THIS is just a snapshot of the combat zone as the traditional, informal alliance of like-minded people at the ABC and Fairfax tell the largest shareholder in Fairfax Media that, as things stand, she is not fit to control the company.

Ms Rinehart has also lit a fuse. She has criticised the performance of Fairfax, its management and its board. Having assembled 18.7 per cent of the company's shares, she wants to be appointed deputy chairman and have three positions on the eight-member board.

I don't know who has been advising her, but the best course of action would have been to say nothing in public, demand nothing, politely seek board representation commensurate with her holding, which is two positions, and not alarm the company, its staff, and the other 81 per cent of shareholders by implying she intends to heavily intervene in a business in which she has no experience.

It is not boards who change the culture of a company. It is the praetorian guard they install. That is key. The power to appoint editors has always been vested with the board.

None of what has transpired has so far addressed the structural problem that has obliged Fairfax to make extensive job cuts to staunch losses at its flagship newspapers.

The company's deepest structural problem is not the internet, nor changes in technology that are obliterating the distinctions between television, computer and phone. Its deepest structural problem has been the bureaucratisation of the company.

Fairfax has behaved like the ABC except that it does not have the almost $1 billion a year in annual government tax-funded subsidy.

The portrayal of this ominous stand-off between Fairfax Media and its biggest shareholder has seen self-absorption on both sides. The narcissism of the metropolitan media in reporting about itself has been evident, especially at Rupert Murdoch's subsidised ideological mouthpiece The Australian.

You would think Fairfax was a company of three newspapers with a bushel of minor add-ons, when the opposite is true. It is a company of 330 newspapers and magazines, one of the biggest newspaper groups in the world. Last week, Deutsche Bank issued a report on Fairfax which valued its metropolitan print business at zero. That is fair value under their current cost structure, which is among the highest in the world for newspapers.

It is being addressed. Fairfax is far from a sunset company. It has at least a billion dollars in enterprise value trapped inside its current structure and not reflected in its market value. It has a big, profitable and growing internet operation. It has more readers and more reach than ever before. It can maintain the Herald and The Age as quality newspapers indefinitely providing their costs are contained within a new business model.

Most of the Fairfax newspapers and niche publications are small and humble but profitable and sustainable. They are below the radar of the internet. They are key information hubs for their local communities. They are thus the sort of newspapers that the world's most successful investor, Warren Buffett, has begun buying.

What Fairfax needs most is a proprietor who is a media entrepreneur. What it needs least is a self-appointed priesthood of the status quo willing to fight to the last dollar of other people's money.

If an ongoing public power struggle breaks out between progressive union activists and a libertarian who despises progressive journalists the most likely outcome is that Fairfax Media will be broken up so that its viable elements can prevail and its shareholders can salvage their investments.

As things stand, the Herald and The Age are worth more dead than alive. The market is indifferent to their survival. This is no time to bluff.

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