Fairfax Media has said there will be no substantial change to its ad revenue despite a Citi Bank analyst's note saying the publisher was at risk of losing $20-30 million in print advertising revenue.
A report by analyst Justin Diddams released late last week stated that since the Federal Government removed the mandated requirement for its senior Federal Government job vacancies to be advertised in newspapers, Fairfax could be at risk to lose millions in ad revenue.
Diddams note also claimed that there are reports that State Government jobs may follow, which could further harm Fairfax's ad revenue however the publisher refutes the claims, with a Fairfax Media spokesperson saying: “There is no change of substance arising from the Australian Public Service Commission’s 2015 announcement as it just confirms the position since 2013 that external advertising is discretionary.
“We expect no material change in our revenue from this source as a result of the announcement. The analyst seems to have misunderstood the context of the announcement,” the spokesperson added.
According to the Citi note, the bank estimates that Fairfax derived $45m from print employment classifieds (across regional and metro) in the 2014 financial year.
“Our analysis of Fairfax newspapers' job advertisements suggests that 60% of listings is government related, of which 25% are federal jobs and 35% are state government jobs,” Diddams wrote.
“Based on our analysis, we believe that $20-30m of print advertising could be potentially at risk, or 7-10% of FY16 EBITDA. We are already forecasting a -10% yoy decline in metro print advertising (on underlying basis) and -10% yoy decline in Regional Advertising,” he added.
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