News that Fairfax family elder John B. Fairfax and his family interests have sold the vast majority of their stake in publishing giant Fairfax Media have been met with predictable headlines this morning: The Australian Financial Review went with “Final edition for Fairfax dynasty” on its front page; The Australian had “Founding family severs ties with Fairfax after $200m stockmarket sale”.

The general theme is that this is the end of an era.

The Fairfax family has been involved with Fairfax Media and its forerunners since 1841. The past 35 years have been particularly dramatic. John and brother Tim were forced to leave the company in 1987, when their cousin Warwick Fairfax privatised the company. But when Warwick’s debts took Fairfax to the brink of collapse, John and Tim bought the controlling shareholding in Rural Press from Warwick.

John B. Fairfax built Rural Press into a publishing powerhouse known for aggressive cost management, particularly under chief executive Brian McCarthy. But in December 2006, in what many saw as a romantic reunion, the Fairfax family came back home when Fairfax Media announced a merger with the Rural Press.

John B. Fairfax and his oldest son Nicholas joined the board and the Fairfax family’s investment company Marinya Media emerged with $114 million in cash and a stake of about 14%.

On April 19, 2007, Rural Press shareholders approved the merger with Fairfax. On that day, Fairfax shares sat at $5.07, valuing the Marinya stake at $1.08 billion.

Yesterday, those shares were sold for just $194 million, or about $814 million less than at the time of the merger.

That is, of course, only a paper loss and doesn’t include the dividends that Marinya would have received during that period — on my rough calculations, these dividends would have been worth somewhere around $50 million.

But the paper losses still represent a huge erosion of wealth for John and Tim Fairfax who has seen their valuation on BRW‘s Rich 200 fall from $1.39 billion in 2007 to $522 million in this year’s edition.

John B. Fairfax said yesterday that the decision to sell the stake in Fairfax Media was “not easy” but from a purely financial stand point it must have been.

Fairfax Media shares have wallowed below the $1 mark since June and its must have been hard for John B. Fairfax to see where a turnaround might come from. Better to stop the bleeding now than to continue to wait for an unlikely return to what now seem like the glory days of 2007.

One question to come out of all this is what John B. Fairfax and Marinya will do next. As well as the proceeds from the Fairfax Media sale, Marinya recently collected about $200 million from its investment in smart meter company Landis + Gyr, which was acquired for $2 billion earlier this year.

John B. Fairfax said yesterday he plans to “diversify”. Given his recent losses, it wouldn’t be a surprise if he stayed well away from the media sector.

*This article first appeared on Smart Company