Fairfax slashes newspapers values by 80%

December 29th, 2012 at 10:00 am by David Farrar

The NZ Herald reports:

Media, which publishes the Dominion Post, Press and Sunday Star Times newspapers, slashed the value of its New Zealand mastheads by more than 80 percent in a group-wide writedown of its traditional publishing assets.

The New Zealand holding company, Fairfax New Zealand Holdings, valued its local newspaper titles at $175.2 million as at June 30, down from $950.1 million a year earlier, according to financial statements lodged with Companies Office. Value is allocated to the mastheads based on how much a company expects to recover from the asset, and is reviewed annually.

Ouch. That is a huge devaluation. Realistic, but painful.

The bulk of the remaining value in its titles is in the North Island publications such as the DomPost and Waikato Times, valued at $112.5 million, compared to $564.1 million in 2011. The South Island publications, including the Press and the Nelson Mail, were written down to $54.9 million as at June 30 from $343.2 million, while national publications such as the Sunday Star Times and Cuisine magazine, were valued at $7.7 million from $42.8 million.

Some might say $7.7 million for the SST is still too generous!

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24 Responses to “Fairfax slashes newspapers values by 80%”

  1. Redbaiter (7,565 comments) says:

    Yeah well Newsweek sold for $1 only.

    People have had it up to here with collections of left wing propagandizers (Newspaper offices) filtering the news.

    Global warming, the Iraq war, the environment, poverty, race issues, gun control, always predominantly covered from a far left political perspective.

    The filtering is so bad, they’ve made themselves totally untrustworthy. And therefore valueless.

    Mainstream reporting on gun control in the US for example is worse than pathetic. Why would I put stuff from the Herald’s collection of left wing indoctrinated “journalists” ahead of the stuff I can see on Youtube?

    Where would you see the kind of truth on gun control that is in this video in NZ’s print media for example.

    https://www.youtube.com/watch?v=M1u0Byq5Qis

    Nope, like Newsweek, which finally went under last week, NZ’s newspapers are completely valueless. And they only have themselves to blame. Pissing off a large portion of your market by feeding them transparent left wing clap trap is not any kind of recipe for building a business.

    The internet rose to favour because of the mainstream media’s political corruption, and there is now no going back. No way to reverse the decline. Market share has shifted permanently.

    The sad truth is that the more of the west’s progressive controlled newspapers go the way of Newsweek, the better it will be for democracy.

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  2. lazza (358 comments) says:

    Oh Dear … Fairfax/MSM writedown value down … BIG time.

    Blog’s commercial value … UP.

    What price Blogs/Kiwiblog then?

    On a masthead/goodwill (Accounting IFRS) basis … probably Bugger All.

    This is due to the accountant’s hide-bound habit of capitialising newspaper historical revenues and their growth rates … and in dollar terms.

    Blogs have little or no track records/revenue (yet) but will gradually take over the news coverage – display ad spends to create conventional value. We will need some history of value if these entities are (soon) to become marketable.

    For now here are some indicators of Blog Value metrics

    1. Exposure rate: numbers not $$$’s

    Number of hits and annual growth rates (AGR)

    Number of deep hits/searching and AGR

    Sign up rate of display and other ad revenue and AGR

    2. News value, activity rates (volumes) all with AGR

    Numbers of daily unique items

    Numbers of active comments

    Numbers of live links (to other sites).

    3. Ranking of Blog nationally and position gain/loss factor

    With Google/Facebook floats/market valuations sold on “potential” now is the time to begin a rudimentary valuation process that has “Some” meaning.

    News is edging? towards a monetising model (free news access is not sustainable) and with more people turning to the net the future … has arrived.

    The day will come when MSM/Display revenue reaches the “dead in the water” point (there now?).

    Some better than staid (irrelevant) IFRS valuation/assessment which will go the same (d-i-t-w) way will be needed when it comes to Blog valuations.

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  3. mikenmild (10,644 comments) says:

    Print news needs to find a way of staying relevant and profitable. Many people, including me, still get value from a print newspaper delivered daily, and I’d like to think that can be sustained for a long time to come. If it can’t, there will still be a niche for the ‘free’ papers.

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  4. Jack5 (4,571 comments) says:

    Just a newspaper term for goodwill.

    Such intangible assets are nearly always of questionable value. They indicate mainly what was paid for a venture over the measurable cost of its fixed assets, or an annual revaluation (largely guess) of what the current price would be for the venture. As newspapers lose classified advertising to the internet obviously masthead amounts will dive.

    Yes it is a big revaluation, but that shows some of this amount should have been written off in earlier years.

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  5. Manolo (13,341 comments) says:

    These rags are well on their way to oblivion.

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  6. mikenmild (10,644 comments) says:

    Not oblivion – just a redefinition of their role and value.

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  7. Redbaiter (7,565 comments) says:

    “Many people, including me, still get value from a print newspaper delivered daily,”

    A revelation that explains so much of your ignorance of what is really happening and your far left political persuasion.

    You get something alright, but its not “value”.

    Mix daily “news” from NZ’s “newspapers” with the regular diet of extreme left propaganda that passes as news and comment on TV One, TV3, RNZ and most other old media outlets, and your brain is completely fucked.

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  8. Brian Marshall (187 comments) says:

    I brought my last DomPost on the 10th of December when I just had enough. After over 18 years of buying the Dominion and either reading my parents copy or when I moved out of home, my own copy of the Evening post for the past 30 years. I just got sick of the lack of balance in the paper. Whereas in the past the Evening post was liberal and the Dominion conservative, you still got balanced reporting from both.
    After the last editor changed, the DomPost has really lost it’s objective balance and my finely tuned BS detector has just had enough. Alongside losing me as a reader, they lost at least three other people at my work who would often borrow my paper during their breaks.

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  9. LabourDoesntWork (282 comments) says:

    lol, great news. Maybe the journos should have studied harder at journalism school? Oh wait- what do they actually learn there and what do these people actually know to qualify them to edjumacate the rest of us? Fortunately you don’t need to know much to be a herd-following progressive….
    Besides, I don’t trust any publication that tolerates horoscopes in its pages: truth simply isn’t the #1 priority for those people.

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  10. Reid (15,924 comments) says:

    The sad truth is that the more of the west’s progressive controlled newspapers go the way of Newsweek, the better it will be for democracy.

    No the media is needed for propaganda and they use both the conservative and the liberal press to achieve that. Part of the propaganda is vapid, celebrity and sports crap, and this will continue just like all the other propaganda like taking sides on a story like we see the US and UK media do on Syria today for example and the way we saw them all do it for Iraq and WMDs and the list is long. All this will continue, just in the online media, where there are no publishing costs.

    It’s tapping in to the ‘rivers of gold’ classified advertising online that’s the problem for them. How do they do that, is their question. I heard recently that the rivers of gold before the web were so strong that the Melbourne Age could publish every single daily edition at a loss because the Saturday classifieds alone paid for the entire week’s print run. How do you replace a revenue stream like that, online?

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  11. Redbaiter (7,565 comments) says:

    The Age is technically bankrupt.

    From Feb 2011

    “Articles in Murdoch’s Australian newspaper have claimed the Age will slide into the red next year, after losing $101 million in revenue and $68 million in profit over the last five years. Others say the position is even worse at the Sydney Morning Herald. The gloomy figures are hotly disputed by Fairfax management but they have not been corrected.”

    Fairfax stock chart-

    http://whatmenaresayingaboutwomen.com/wp-content/uploads/2012/09/fairfax.gif

    One day you’ll write something here that has some semblance of accuracy.

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  12. TripeWryter (715 comments) says:

    Rupert Murdoch bought The Press for $110 million in 1987.

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  13. Pauleastbay (5,035 comments) says:

    Red @10.16am

    The best comment I have ever read of yours.

    It its wildly apparent why the UN and repressive regimes want control of the internet. For them there is far too much “raw” information out there that they cannot control and they are scared. Even wet brains now realise that what they are feed via TV and papers is adulterated to the max and cannot be trusted.

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  14. gonzo (5 comments) says:

    “Redefinition of their role and value”. Very true.

    One of the SSTs best Front Page Lead Stories of last year was a “McDonalds bun delivery problem” that impacted about 50 North Island stores. Was just overnight i think. Top news.

    I kinda felt sorry for them when I saw that. They’ve given up.

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  15. Paulus (2,499 comments) says:

    Sunday Star Times next to fold – real lefty unbalanced articles – look at the writers.
    However what do I know I cancelled 18 months ago, after 20+ years, and they rang and asked me why – I told them.
    The Auckland local (cheap Malaysian paper is used now – not from Kawerau any more) paper the Feral Herald has gone really lefty in the last 6 months going the same way as the SST.
    Soon there will be no newsprint, and what will the ex Waikato Politech so called journalist do – fight for jobs in Parliament for the Greenpeace and Labour parties.

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  16. DJP6-25 (1,268 comments) says:

    Looks like Fairfax are fair buggered.

    cheers

    David Prosser

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  17. tvb (4,200 comments) says:

    This is a dying industry. There is not a business model that works for newspapers. So we will witness its death over the next 10 years. There might be some scope for racy tabloids and a weekend read of some sort.

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  18. Rex Widerstrom (5,257 comments) says:

    We can gloat all we want about the impending demise of mainstream media outlets but I’ve yet to see a blog undertake the kind of in depth investigative journalism that some media outlets still occasionally produce.

    Yes, they’re few and far between and account for only a tiny proportion of what’s printed and broadcast and increasingly real journalism is being replaced by cheap-to-make panel discussions or opinion columns. And since we can find better-informed commentary among the pages of Kiwiblog, why would we buy the SST, for instance, to read the entirely predictable wafflings of people well past their use-by dates?

    But when the MSM remembers what it used to be capable of in its glory days and gives it a go again, we get information no blogger has the resources to match. Take the Winston Peters / Owen Glenn / Spencer Trust story for instance. It was MSM journalists, not bloggers, who tracked down myself and other people with key recollections, went after OIA information, and generally wrote a story the key protagonists didn’t want published (which is the definition, after all, of real news).

    Those eagerly awaiting the end of the MSM should also undertake this exercise: visit your favourite blog(s) and deduct from the past month’s post all those that rely entirely on an MSM story for their content, then ponder how much value those blogs would be without the MSM to feed them.

    That’s not a criticism of bloggers by any means; they too are looking for a model which provides more than a bit of cash to spend on the odd bottle of wine or a hobby. Unless and until they find it, there’s no way they can match even the paltry amount of actual reporting the MSM can still afford to do.

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  19. mikenmild (10,644 comments) says:

    I would have thought there was a market for a good weekly or bi-weekly newspaper. The SST is pretty hopeless, and I know better than to try the ‘Truth’. I like the DomPost’s Saturday edition, and would be happy to get that and a similar edition midweek.

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  20. mikenmild (10,644 comments) says:

    Rex
    Some blogs can produce good stories. Russell Brown and Keith Ng and the other Hard News bloggers do some great stuff, for example the MSD servers story.

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  21. nasska (10,636 comments) says:

    Rex

    All true, but I wonder if that “paltry amount of actual reporting” isn’t already nearing the end of its journey to total extinction. There seems to be a reverse snowball effect in play……papers appeal to less people, subscriptions plummet yet dividends have to be paid. To pay the dividends costs must be squeezed & true investigative journalism doesn’t come cheap.

    Real journalists are let go or relegated to cutting & pasting left wing drivel readily provided by former scribes now employed by political parties well funded from taxes stolen from the average citizen & now used to brainwash him.

    The taxpayer/newspaper subscriber revolts at being force fed the rubbish, sales head South, less reporters are employed, rinse & repeat. Eventually we must get to the point where there is no original content.

    The phrase “death spiral” seems appropriate.

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  22. Pauleastbay (5,035 comments) says:

    Rex
    ..visit your favourite blog(s) and deduct from the past month’s post all those that rely entirely on an MSM story for their content, then ponder how much value those blogs would be without the MSM to feed them.

    true to some extent but how many of those stories when they are taken to the blogs are found to be puff pieces or press releases and its not until thet get dissected that some semblance of balance is found.

    http://www.guardian.co.uk/uk/2012/dec/28/prince-charles-private-meetings-ministers

    Now you see the above headline in the Guardian and you could think that Charlie was meddling big time, but you read the article and you see that the article is driven by a Labour backbencher

    who has been campaigning for greater transparency in lobbying, including by royals, called for the government to provide information about what Charles discussed with ministers.

    , you also see that anyone could have got the information rergarding the meetings by requesting the information from the Palace, so you have a non story driven by a opposition politician which has had a pretty good headline put on it by a sub-editor on a left leaning newspaper.

    Now I can give you examples all day of that sort of thing. The real fact is if the MSM would stop being so fucking lazy and re-writing press releases you would find perhaps that the blogs would not be so busy.

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  23. mikenmild (10,644 comments) says:

    I wouldn’t have thought that the heir to the throne writing and badgering cabinet ministers was a ‘non story’, but there you go.

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  24. Rex Widerstrom (5,257 comments) says:

    @mikenmild

    True, Public Address has done some very good investigative work. Probably about the same ratio of investigation to opinion as the MSM, come to think of it. How they do it, I don’t know. When people have to suggest that readers donate to Keith Ng to support the excellent work he’s done, it just shows that blogging remains a labour of love.

    And just like the newspapers who thought they could retrospectively introduce paywalls, I think popular bloggers who tried to charge for content would find the model failed.

    The trick will be finding a new paradigm that works. And it’ll have to oversome the entrenched belief that if it’s on the internet, it’s almost an insult if it’s not offered for free, no matter what it costs to produce. There’s the beginnings of a shift in things like crowdfunding and donationware, but there’s a long way to go before voluntary support produces actual salaries.

    @nasska

    You’ve summed the “death spiral” up pretty well. What frustrates the hell out of me is that there are people on both the left and the right (as well as those apparently nonaligned) who moan about the lack of standards in mainstream media yet are unwilling to fund an alternative. I have no problem with Fox News or The Guardian as their political leanings are openly, almost proudly, on display and I think most intelligent readers are the same – it’s media who pretend to balance and act with bias that annoy people.

    There’s a hunger for real news and investigative reporting, so summon up the courage and fund its production. If, for instance, a right wing mogul funded a newspaper – provided its bias wasn’t too extreme, as that would appeal only to the True Believers – it would find a market, I think. But it means reversing the spiral and absorbing a loss while the title established its bona fides.

    Certainly I think a decent newspaper has another 30 or 40 years in it, till the entire reading public is composed of those who’ve never known the experience of thumbing through a decent read you can slop coffee and spill crumbs on. And even then, I wonder whether smearing jam across your iPad screen will ever replace it.

    @Pauleastbay

    I agree with what you say (which echoes nasska’s decription) of the turpitude of most newspapers and their decline into press-release-reproduction factories. But you say that “anyone could have got the information rergarding the meetings by requesting the information from the Palace”… you’re right of course but “anyone” usually doesn’t (unless they have a political axe to grind.

    That’s traditionally been the job of journalists, who also developed contacts within the “round” they were assigned to, which not only gave them access to information without having to wait for official requests to be actioned, but also gave them background and perspective. Again – aside from DPF with the National Party and some at The Standard with Labour and the unions – bloggers in general don’t have that special level of access.

    An interesting question is why blogs – the freestanding, “independent” kind – are generally “better”, in terms of cogent argument and even commenters injecting additional information into the story than the comments sections of MSM titles. Personally I think it’s partly over-moderation, but also – and I know how snobbish this sounds – because blogs attract a better informed audience. It’s easy to finish selling your collection of John Rowles LPs on Trade Me and then leap on the message boards with an unsubstantiated opinion about the topic du jour. Kiwiblog, on the other hand, first needs to be sought out by those wanting to contribute and then is very much self-regulating (as is Public Address, I might add) – the mods don’t need to intervene very often because the existing community makes plain – by exampkle but also overtly when necessary – what the standards are.

    That’s another factor working against the MSM monetising their offering, unfortunately. But coming back to my suggestion of a new, quality title, a web-based comments section could become a valuable (and thus saleable) adjunct to the main product, rather than a Confederacy of Dunces.

    Of course it could also happen in reverse… and we could see publication of “The Kiwiblog Daily” :-D

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