A report in The Australian today says that former Fairfax Chairman Ron Walker is heading a consortium of Melbourne families interested in buying The Age and 3AW from Fairfax Media.

In one way it is no surprise. Everyone who knows him understands that Walker seriously wants to get his hands on The Age again, and a buyout by a group of Melbourne patriots has always been one possible future for the paper.

But the more significant story behind the revelation that Walker and his crew are kicking the tyres is the broader context of the position of Fairfax Media.

If Fairfax sold The Age and the Sydney Morning Herald, it would break the heart and the raison d’etre of the company. That means it won’t happen unless it has to happen.

Yet market analysts are saying this morning that if the Fairfax broadsheets are still profitable, then it is “only just”, and they are likely soon to go into loss.

Walker and his crew will not be the only carrion birds sniffing the carcass of the Fairfax beast. The conclusion at present can only be that it is too early for them to move in. Anyone who bought the assets would need to buy them cheap if they are to continue operation, and it is not quite yet a fire sale.

Yet Fairfax Media’s position is dire.

As Steve Bartholomeusz wrote yesterday, the present “strategic review of assets” (as the euphemism goes) by Fairfax, in which both online transaction business TradeMe and the radio stations may be up for grabs, is full of cleft sticks and insoluble dilemmas.

It can only be happening because of pressure from the banks worried about the debt. And it is debt levels that sends big media companies down, as any number of newspapers in the United States can testify.

TradeMe, as Bartholomeusz said, is arguably the group’s best asset. It generated nearly two-thirds of the earnings before interest, tax, depreciation and amortisation of Fairfax’s digital division in the first half. Selling it would gut that division.

And what is Fairfax left with if it sells the TradeMe and the radio stations? Mastheads in the cities that are barely earning their way, plus the New Zealand titles and the Rural Press operations.

So what’s the strategy? It is hard to discern one that isn’t about a much smaller future.

Only a few months ago, the fact that Fairfax had the radio stations was being proclaimed as a strength. The failure to incorporate the radio stations into the culture of the mother ship is one of the management failures of the last decade. I am told there are journalists in Media House, Melbourne, who don’t even realise they share the building with 3AW.

Why do people like 3AW presenter Neil Mitchell, who could be an asset for The Age, continue to be associated with the rival Herald Sun? The truth is that the potential multimedia strength was never exploited, and now it seems it may be too late.

CEO Greg Hywood was only weeks ago talking about using news content online to drive readers to Fairfax’s transaction sites. But how can the company build or buy new transaction businesses from its current position, under pressure to wind back debt and with no cash to spare?

Institutional investors are distraught about Fairfax. Look at the share price.

So what does the future hold? Breakup is one possible future. Former Age editor Michael Gawenda, who said he knows nothing about the Walker deal, told me this morning that it might be good for The Age to be owned by Melburnians. He is not alone in that view.

Yet it is also clear that an Age, or Sydney Morning Herald for that matter, separate from the mother ship would necessarily be a small and modestly profitable operation.

And this is the way we are headed. The news operations of the future will be employers of no more than a couple of dozen journalists, serving multiple platforms. As well as the remnants of the legacy media, there will also be new start-ups online.

We may soon have a dozen or more niche media companies, all trying to distinguish themselves from the others, and to have a point of difference. The game will be about market differentiation, rather than covering the field mass market journalism.

I have been talking to a number of Fairfax reporters recently about the future, and they ask what should they do. An extension to the question is what we should and can do about the future of journalism.

I keep thinking of the movie Titanic. The trick to survival for Leonardo di Caprio and Kate Winslet was, first, to be about what was happening. Those who denied the ship could sink were partly to blame for the tragedy.

Then the trick was to stay on the big boat as long as possible, keeping out of the icy water. They used it, even as it was sinking. But it was also necessary to know when to jump clear, so as to avoid being dragged down.

Then, once the ship had sunk, there were bits of wreckage to cling to, the remnants of the past,  until the rescue boat arrived.

How does the metaphor operate? Journalists and editors at Fairfax should be thinking about how the still considerable cultural capital of the organisation they work for can be used to give journalism in the future the best possible chance.

If they hope for one of the few dozen seats in the Fairfax lifeboat, they should be thinking very hard and very clearly about what the point of difference is — what makes The Age or the Sydney Morning Herald different and better than its competitors, which include, in this converged world, online services from commercial broadcasters as well as other newspapers.

The obvious point of difference is relationships with their cities. That is the potential lifeboat for the Fairfax mastheads, whether they remain owned by Fairfax or not. Time to get smart about making that clear, and claiming that space. I’ve been writing some articles recently about some of the things that might involve.

But there won’t be seats aboard for everyone. Others should be ready to leap clear at the right moment, and then seek the wreckage to cling to.

There will be a future, although it might be less about waiting for a lifeboat and more about rapid paddling towards a new shore.

But remember that Leonardo diCaprio had to die. Not everything we regard as important will survive.

Journalism will survive — in many different places. It will be different from before, in many ways poorer but in some ways better, and as time goes by, we will discover means to continue the capacity that human societies have always found to be necessary — finding things out and telling people about them.

Cue Celine Dion and My Heart Will Go On.