Australia: Fairfax on verge of collapse
People play shoot the messenger while I try to document the demise of heritage media. So let me put a target HERE on Vex News for you to aim at: The publisher of left-wing newspaper The Age, Fairfax Media is on the verge of financial meltdown after announcing a $365 million net loss for the…
People play shoot the messenger while I try to document the demise of heritage media. So let me put a target HERE on Vex News for you to aim at:
The publisher of left-wing newspaper The Age, Fairfax Media is on the verge of financial meltdown after announcing a $365 million net loss for the first half of the financial year.
The company was forced to slash $447.5 million from its balance sheet valuations of the businesses they own, including dubiously over-valued assets like The Age’s masthead.
“They’ve borrowed many millions on The Age and (Sydney Morning) Herald’s mastheads, which we doubt they could get anything much for in a firesale. The situation is really quite desperate for them,” one industry observer said. “The assumptions underlying loans to Fairfax depend on classifieds revenue and that it is dying in real estate, autos and even employment, so how much longer can the company survive?”
The write-downs of asset valuations make for big headline numbers but of themselves don’t make a big direct impact on the business (at least until it comes time to refinance).
Pick on Landeryou on Twitter.
Australia: Fairfax on verge of collapse
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People play shoot the messenger while I try to document the demise .. http://tinyurl.com/adxjoq
I wonder if people will follow bloggers and community journalism websites more? interesting times for sure.
Here you have highlighted the problem with “social networking” and information.
1. Landeryou is a blogger. Because he was caught out with some dodgy financial stuff he is no fan of The Age or of Fairfax. Is he the right guy to rely on, as you have?
2. Landeryou talks about debt and covenants (not the same thing as default, since their breach only triggers re-pricing). Fairfax reported net cash for the December-ended six months of more than $200million. It has nil debt to cover until late 2011, some of which is convertible to equity anyhow.
3. Fairfax merged with Rural Press and bought Trade Me. Neither of those looks at all like a dud. It is arguable that the purchase of Southern Cross radio (and the lovely Neil Mitchell on Melbourne 3AW) was a turkey. Generally, it’s a big mistake to say that it’s going to sink with online classifieds.
4. Last weeks’s equity raising appears to have been very well received. That is, they have no trouble raising $500million. In this market.
Landeryou was probably making it up for fun. Or he’s a liar. Or maybe just a dumb crook?