A truce has been declared in Melbourne’s real estate advertising wars, with Antony Catalano’s giant-killing Weekly Review set to merge with Fairfax in a pioneering 50-50 joint venture that may see the demise of Fairfax’s ailing Melbourne Weekly.
The tie-up, flagged by Crikey five weeks ago, partially deals Fairfax back into Melbourne’s lucrative $50 million eastern suburbs real estate advertising market but allows Catalano, a former Age advertising director, a large degree of autonomy.
Last April, Catalano, nicknamed “the cat”, set up his 200-page glossy and overnight gouged $20 million out of Fairfax’s so-called “rivers of gold”, anchored by its classifieds in the Saturday Age and buttressed by The Melbourne Weekly.
An official announcement is expected either later today or early tomorrow.
But according to a source close to the deal, Fairfax will take on half of the new ownership structure of MMP Holdings, partly by purchasing equity stakes from some existing MMP shareholders. When Catalano set up the firm he held a private stake alongside four leading real estate agents — Kay & Burton, Jellis Craig, Marshall White and Bennison Mackinnon — and several others. MMP’s subsidiary, Metro Media, publishes the Weekly Review.
The source said the 32-masthead strong Fairfax Community Network will be rolled into the new entity, which is expected to be led by Catalano as CEO.
Crikey understands the editorial functions of the Weekly Review will remain the same, with staff continuing to be housed in its South Melbourne headquarters. A staff email missive is expected to be dispatched this afternoon, adding further details following a 4pm meeting yesterday.
Catalano was not available for extensive comment this morning, but briefly noted a report on the deal in today’s Australian had “got it all wrong”.
The Weekly Review‘s coverage extends from Melbourne’s affluent bayside suburbs, to Middle Camberwell and also — via a separate edition — to the Heidelberg and Ivanhoe “green belt”.
The fate of its flailing Fairfax competitor — which delivers along many of the same routes — remains unclear, with either a merger or its partial scrapping seen as a sensible outcome.
Last month, Catalano denied a détente was imminent, telling Crikey that “we haven’t spoken to them in the past, we’re not going to in the future and we’re certainly not selling at that price”. But it seems negotiations have since progressed.
Catalano departed Fairfax in August 2008 with a million-dollar payout and spent his non-compete period in Byron Bay mulling over plans to woo Melbourne’s top agents to his bulky brainchild.
He maintains good relations with relatively new Fairfax CEO Greg Hywood. Hywood elevated him from The Age‘s newsroom floor in 2001 to oversee the masthead’s advertising, and Hywood’s son Tom works at The Weekly Review in an advertising role.
The deal represents the second time Fairfax has been forced to act to insulate its revenue stream, having previously shelled out $67 million to purchase The Melbourne Weekly from Text Media in 2003, then partly-owned by Crikey publisher Eric Beecher.