New merger rules will result in horse trading not local sell-offs

The focus has fallen on regional media in an unprecedented manner recently. Last week’s Digital Media Summit kept the issues squarely in the spotlight, attended by political heavyweights including PM Gordon Brown and business secretary Peter Mandelson, and industry bigwigs such as Mirror Group’s Sly Bailey.

It dovetailed with the submission to Lord Carter’s Digital Britain process of former GMG Radio chief executive John Myers’ report on local radio, previewed in Media Week last week, and the recent report to the Office of Fair Trading about local media ownership rules by the Local Media Alliance – headed by outgoing Johnston Press chairman Roger Parry.

The latter submission is particularly interesting, especially in a week when Gannett-owned Newsquest posted a shocking 60% year-on-year decline in property classified revenues. The LMA is an ad hoc alliance of seven of the largest regional newspaper publishers and the Newspaper Society, set up in February to lobby for the relaxation of local media ownership rules. It was an expedient measure to get the process moving quickly and meet tight deadlines imposed by Carter’s initiative.

The early consensus was that, if ownership rules are relaxed, the industry would rationalise into two or three regional media supergroups, with consequent concentration of titles, centralisation of systems and printing facilities.

But, behind the scenes and separate to the recession that makes access to M&A finance problematic, major regional newspaper owners don’t see it quite like this. They want to use a relaxation of rules to cluster their portfolios in a multimedia shape that makes sense on a regional basis and brings audio and video firmly into the content mix. It will be horse trading rather than wholesale sell-offs.

The BBC has been headed off at the pass after its plans for local online video services were blocked last year. But regional media faces a new threat from local councils producing their own papers and publishing planning notices there rather than in local papers. “Newspaper” no longer adequately sums up what local media brands must evolve into if they are to survive the recession and structural changes ahead.

Audiences still want local content, but there is increasing competition to provide it. Traditional newspaper brands have to demonstrate they are still best-placed to give local people what they want – when and how they want it.