- Fairfax Media and News Corp Australia announces a deal to use each other’s printing networks.
- This will cut newspaper printing overheads for both publishers.
- Fairfax says it will mean a full year benefit of $15 million.
Australia’s two biggest newspaper publishers, Fairfax Media and News Corp Australia, have agreed to use each other’s printing networks, reducing the overheads to keep producing hard copy newspapers.
The publishers, who face declining revenue from newspapers, are looking at other opportunities following this deal.
Fairfax Chief Executive Officer Greg Hywood says the deal will mean the closure of some printing assets but the deal means Fairafx will be able to “produce newspapers well into the future”.
“These are landmark initiatives. They demonstrate a rational approach to the complex issues facing the industry,” he says.
“Better utilisation of existing print assets makes sense and will deliver economic benefits to Fairfax Media.”
Fairfax expects the new arrangements, and the changes to Fairfax’s printing network, to result in an annualised full-year benefit of $15 million. The benefits are expected to begin towards the end of the 2019 financial year.
News Corp will provide a range of printing services for Fairfax in New South Wales and Queensland.
Fairfax will transition work from its print centres in Beresfield, NSW, and Ormiston, Queensland, and then close both.
Fairfax will print publications for News Corp out of its North Richmond, NSW, plant.
“The agreements deliver greater cost variabilisation, enabling us to produce newspapers well into the future,” says Hywood.
In its latest half year results, Fairfax posted a 3.9% drop in revenue to $877.1 million. Net profit after tax was $38.5 million, compared with $83.7 million in the same prior last year.
Metro Media, where Fairfax’s big mastheads sit, posted a 9% fall in revenue to $253.6 million.
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