Fairfax puts TV arm up for sale

Less than nine months after the company became part of Fairfax Media (owner of The Age), Southern Star chief executive Hugh Marks confirmed he was trying to find companies "that would be good for us to tie up with".

Fairfax snared the company, which produces programs such as City Homicide and Hi-5, in its joint takeover of Southern Cross Broadcasting with Macquarie Media Group.

Fairfax chief executive David Kirk said then the addition gave Fairfax "the capacity to develop and distribute entertainment-related content" for its news and entertainment websites, although Mr Marks suggested the parent company's priorities had changed.

"The majority of their business is certainly in their core classifieds, news and transactional things like (dating website) RSVP, and there's not much synergy between us and them in those worlds," Mr Marks said.

"The fundamental reason for Fairfax wanting to sell is that we have a growth ambition (and) want to achieve things internationally, in particular, and because where they are at the moment they obviously feel that's not a priority."

BBY media analyst Mark McDonnell said there was "zero surprise" about Fairfax's decision to sell, largely because the Southern Star programs were "not a good fit" for Fairfax websites.

Mr Marks conceded Channel Ten's axing of Big Brother after eight seasons would create a "bump" in 2009 earnings. But he predicted its overseas production and distribution divisions - which contribute two-thirds of annual revenue - would progressively fill that gap.

"People call our business risky and lumpy and variable, (but) the fact is, for the last five years, we've grown at 20% a year for profit, so we've demonstrated the ability to get consistency if you diversify your business," he said.

Mr Marks said Fairfax would try to whittle down expressions of interest to serious bids in the next month.

The reporter owns Fairfax Media shares.