Ratings agency Standard & Poor downgraded its long-term credit rating of Fairfax Media from stable to negative to "reflect the ongoing deterioration in advertising markets in Australia and New Zealand," The Australian reported Friday.

The poor ad market is partly to blame for "increased uncertainty about Fairfax's future earnings and increased the rating sensitivity of Fairfax's leverage position, which is at the high end of expectations for the BBB- rating," S&P stated, according to The Australian, a Fairfax newspaper.

If earnings reports, due Feb. 23, do not show an improvement, S&P warned the rating could go even lower.

The lowered earnings outlook also shows that Fairfax is less likely to see a better financial situation without more capital or operating cost cuts in the near future, the agency stated, according to The Australian.