Fairfax’s famed ‘rivers of gold’ could dry up altogether, at least in Melbourne, with a new weekly glossy from Age turncoat Antony Catalano — backed by the city’s leading real estate players — set to cannibalise the lucrative eastern suburbs advertising market.

The as-yet untitled Metro Media publication to take on Fairfax’s Melbourne Weekly will formally launch next week, with the first edition slated to hit letterboxes by mid year. A number of production staff have already been hired to set it up. Crikey understands that more than 15 leading agents, including major players Jellis Craig, Kay & Burton, Bennison Mackinnon, Marshall White and Noel Jones have signed with the new venture.

Between them, the firms dominate Melbourne’s leafy eastern suburbs. Their defection could wipe some $5-10 million from Fairfax’s bottom line, already under severe strain from evaporating classifieds revenue. The Melbourne Weekly‘s total earnings before interest and tax is believed to be in excess of $12 million.

Crikey can reveal that commercial city law firm Cornwall Stodart and accountants Lawler Draper Dillon are the publication’s key stakeholders alongside Marshall White, Jellis Craig and Kay & Burton. The agents each own 15.6% of MMP Holdings (the owner of Metro Media) according to ASIC documents reported in Saturday’s Age. Catalano’s Kirant Investments owns a further 15.6% and Kay & Burton director Gerald Delany will serve as a director alongside Catalano.

The inclusion of Cornwall Stodard in the deal will help assuage conflict of interest concerns over a publication run by the same agents who influence the advertising spend by vendors. Both firms are believed to have reviewed Metro’s business plan with a fine-tooth comb.

Insiders say the major agents’ defection — which include Melbourne’s three largest advertisers — would leave second-tier outfits with little choice but to embrace the new venture for fear of being left out of the loop. It has also been mooted the new publication could align in some way with News Limited’s Herald Sun — depleting advertisements in the Saturday Age and tearing an even bigger revenue hole.

Since it switched to a distribution company half-run by Fairfax, residents and agents have complained the Melbourne Weekly’s availability has slumped, with some salubrious pockets failing to receive the bulky publication for months on end. It is unknown which distribution channels Catalano’s new publication will employ.

On Saturday, Fairfax Community Newspapers Victorian general manager Colin Moss bizarrely accused the agents of attempting to “take the advertising profits themselves”, a comment dismissed by figures close to the deal as self-evident.

Catalano, a former Herald Sun police reporter, was famously dismissed as The Age‘s marketing manager alongside editor Andrew Jaspan after a brawl with then-Age chief Don Churchill in 2008. He has been at the centre of the Melbourne real estate game for years, penning this story — as The Age‘s property reporter — that uncovered an ACCC investigation into his own paper’s payments to leading agents.

Despite rumours to the contrary, Jaspan, who was sacked by The Age on the same day as Catalano, is not involved in the new venture.

After years of tension between former Melbourne Weekly publisher Text Media and Fairfax, Fairfax eventually acquired a controlling stake in the company from current Crikey publishers Eric Beecher and Di Gribble in 2003, which valued the business at $67 million.