Fairfax Media Limited (ASX: FXJ) today took another step to end the printing of weekday newspapers after taking $989 million in writedowns.

The media company says it will book the impairments on its publishing assets and also in relation to changes to its segment reporting.

Here’s how the total charge is split:

  1. $484.9 million on Australian Metro Media
  2. $408.8 million in Australian Community Media
  3. $95.3 million in New Zealand media assets

Rival newspaper The Australian – owned by News Corp (ASX: NWS) claims that weekday editions of The Age and Sydney Morning Herald will end, although weekend editions will still be printed. The Australian says 65% of advertising revenues are generated by the weekend edition papers. The Australian Financial Review (AFR) is also likely to cut its weekend paper.

Interestingly, News Corp’s largest asset is Domain’s main rival REA Group Ltd (ASX: REA) – which owns and operates Australia’s leading real estate website realestate.com.au

Speculation that Fairfax was looking to dispose of its Domain online real estate business was also dashed, with CEO Greg Hywood saying, “Domain has established itself as a genuine force and aggressive competitor in real estate media and services. Domain makes a significant earnings contribution and remains an integral and growing part of Fairfax. We have no plans for that to change.

We continue to invest in Domain to make it stronger and extend its business model beyond listings to capture the immense opportunity in the broader real estate ecosystem.

Domain half year results Jul 2016

Source: Company reports

 

One thing investors should note is that while companies are required to write down the value of their assets if they are no longer expected to deliver expected earnings, but they have no ability to revise the value of assets upwards. As Fairfax says, “The accounting standards do not allow Fairfax to recognise in its accounts all of the considerable value which Domain has created over the past four years.

Domain has been valued at $1.95 billion by Credit Suisse analysts – roughly 82% of the total value of Fairfax. And the value is growing as the chart above shows revenues and earnings accelerating over the past four years.

Foolish takeaway

The end for newspapers appears nigh. One has to wonder when News Corp will be forced to take similar steps with its newspapers – particularly The Australian.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.