Competition and much higher real estate advertising rates put Antony Catalano’s seven Melbourne community papers out business: rival

The seven Melbourne community newspapers shut down by Antony Catalano’s Metro Media Publishing (MMP) Group this month failed because they charged well above the real estate advertising rates of its News Limited competitor in the same market, John Trevorrow, the editor of Leader Community Newspapers has claimed.

The Fairfax stable of local papers has been revealed as sometimes charging double and triple the News ad rate.

On June 17 MMP will stop publishing the Casey Weekly, Frankston Weekly, Casey Weekly Cranbourne, Knox Weekly, Monash Weekly, Maroondah & Yarra Ranges Weekly and the Peninsula Weekly with 32 employees to lose their jobs.

The seven publications came under Catalano’s MMP division in July last year as part of a merger with Fairfax.

In total 12 community papers have been shut down since the merger.

Catalano blamed the recent closures on its ability to gain new real estate advertising clients being “undermined by the millions of dollars News Limited is paying to agents across Melbourne and particularly in the south-east, which has made it impossible to compete fairly”.

He added that it was "ironic that a media organisation’s kickback program is the cause of media jobs being lost.”

But in an article published in News Limited-owned Herald Sun, Trevorrow, hit back claiming healthy competition had been the downfall of MMP-Fairfax titles.

“Reason for the closure of these publications is simple: healthy competition had provided consumers with a choice, and they chose not to go with MMP,” Trevorrow wrote.

He attacked the MMP business model, which involves local real estate agents having equity in the MMP titles.

“Those agents share in the profits the titles make, ironically off the back of real estate advertising they place but which is paid for by home sellers."

Trevorrow said the titles “generally have the high real estate advertising prices in their respective markets - presumably they have to charge higher rates in order to increase profits for their real estate agent shareholders”.

As an example he said the MMP publication in Stonnington/Boroondara charges $2772 for a full page ad compared to the local Leader title, which charged $990.

In Ivanhoe/Diamond Valley, Trevorrow said MMP charged $1550 for a page in its publication versus $770 in the rival Leader newspaper.