Fairfax Media’s $2.7bn loss announced today demonstrates that “the sector is eating a massive shit sandwich,” media agency boss John Sintras said today.
Speaking at the Audit Bureau of Circulations conference, CEO of Starcom told the audience: “The sector is eating a massive shit sandwich. The Fairfax news emphasizes how bad the sandwich is. If we’d started eating the sandwich ten years earlier it would have been a lot easier to digest.”
Sintras’s comments comes as the value of Fairfax Media’s mastheads reportedly fell by $3bn due to write-downs and restructuring costs, as the publisher posted a $2.7bn loss.
The value of newspapers including The Age, The Sydney Morning Herald and The Australian Financial Review plummeted from $3.25bn to $1.29bn, due to write-downs.
Fairfax’s EBITDA fell 16.7% on last year, to $506m. This results was “slightly above market consensus”, the company has told the ASX.
Fairfax boss Greg Hywood said in a statement to the ASX:
“Fairfax Media has a sound and diversified business, as shown in the underlying results we have reported today. These results reflect a challenging trading environment. We continue to drive significant change through the business, consistent with our strategy, and we are responding to a stressed economic environment.”
“The cyclical downturn worsened during the 2012 financial year, while continuing structural change is affecting our Metro Media Division. Fairfax has worked hard to respond to these conditions. At the half year we formally announced the Fairfax of the Future program to transform our business. We subsequently expanded and accelerated that process.”
“Despite the tough times, Fairfax is a company that is committed to growth and committed to innovation. We are investing across our digital businesses, which grew revenue by 20% this year. Digital advertising yields grew strongly as advertisers recognise the value of target demographics – the demographics that Fairfax sites attract.”
Fairfax’s extensive restructuring program prompted strikes by affected journalists earlier this year over the decision to outsource production jobs to New Zealand.