Fairfax itself, however, has said that it studied the break-up options intensively, with considerable external advice, and concluded that it would be value-destructive because it would reduce the group’s ability to bundle brands and platforms and offer cross-media solutions to advertisers and would also generate significant costs and dis-synergies.
The core problem, however, is that breaking up the group would probably undermine its ability to continue to fund the Fairfax of the Future strategy for its metro mastheads – The Sydney Morning Herald, The Age and The Australian Financial Review – and create at least the potential for their transition into a purely digital future.
Fairfax isn’t prepared, or able to countenance, the complete write-off of its two big broadsheets.
The group is on the brink of radical change in the nature of the two core mastheads. They will move to tabloid formats this year and it will introduce paywalls to the online sites. Subsequently Fairfax will transfer printing of them to its regional presses, shutting down and selling its Chullora and Tullamarine printing plants.
It has also looked at ending physical production of the papers completely, which it has said would cost at least another $200 million on top of the $248 million of costs the restructuring has already generated.
Source: Business Spectator