The Domain spin-off was voted through this mooning by shareholders. What will happen to the failing media rump? nothing good, from Citi:
Following the separation, the 60 per cent of Domain that Fairfax still owns should make up 72 per cent of Fairfax’s valuation (which Citi expects should be 74 cents a share). However Citi says Fairfax’s core newspaper businesses are facing continued revenue decline, and Fairfax is facing continued cost cutting to minimise the earnings decline.
“We expect management’s focus will switch to its remaining businesses once the Domain separation is finalised,” the brokerage notes.
Citi says with recent changes in media ownership laws changed, there is scope for cost synergies in combining the newspaper assets with a TV broadcaster.
“Although this is unlikely to change the downward revenue trajectory facing both industries,” it adds.
In short, more realty guff, less journalism.
