One of the most interesting - but worrying - media stories of the
past few days is the #904 million bid for Newsquest by US heavyweight
Gannett. It represents the first real acquisitive push into grassroots
regional UK papers by a foreign publisher. The deal’s hardly
toe-in-the-water stuff.
Newsquest owns such illustrious UK papers as the Northern Echo, Brighton
Evening Argus and the Oxford Mail among the 63 paid-for and 120 freebies
in its stable, built on the former Reed Publishing and Westminster
empires.
The third largest regional publisher in a rapidly consolidating sector,
Newsquest is concentrated in lush Greater London, Wiltshire, the
Midlands and the North. Gannett, meanwhile, is best known here for its
1970s launch of a European version of USA Today, a brash broadsheet
aimed at US tourists seeking their baseball fix.
Gannett is attracted by the profitability of the consolidating regional
press - 77 per cent of regional press has changed hands in the past
three years - assisted by the fact that the key buy-out backers, US
Kohlberg Kravis Roberts (with Cinven), have control. They should deliver
this deal without a fight, or reference to the Competition Commission.
Given this lack of checks, it is surprising that Gannett, or other big
US publishers haven’t pounced before. After all, Conrad Black and Rupert
Murdoch have already colonised the national press.
There are similarities between US and UK regional papers beside common
language and publishing techniques. Gannett, with 74 daily titles, likes
to hold a media monopoly in its towns. It has high advertising to
editorial ratios and a big focus on the bottom line. It has heavily
invested in local TV and cable companies (impossible because of
regulatory constraints here) and crucially, is way ahead in translating
its regional presence into e-commerce.
Three quarters of regionals now operate a web site, demonstrating that
the new media does not necessarily obliterate the old. Significantly,
Douglas McCorkindale, vice-chairman and president of Gannett, said of
Newsquest: ’We like the way they create their product, initiating new
products and what they are doing with the internet.’
He means the paper’s web sites, internet auctions, electronic
directories, and involvement in This is Britain - the consortium which
provides content to big portal operators.
So why do I find this acquisition worrying? The news broke as I was
judging the regional press awards: over the past five years in the role,
I’ve observed editorial improvements as the papers are being run ever
more professionally.
Nine out of ten people read a regional paper every week. They are not
just local ’rags’, but a medium for democratic debate and information,
too. I hope Gannett respects that.
