Now that the consolidation of ITV has been sorted out, apart from
the ultimate destination of HTV, the battleground shifts to regional
newspapers.
Gradually regional newspapers are following the trail already blazed by
the rest of the media industry, although there will probably always be
room for the small, independent and sometimes family-owned operator.
Eyes in the industry are turning to Yorkshire as three groups line up to
have a crack at Regional Independent Media, publisher of the Yorkshire
Post. The deal is particularly significant because it is the last
free-standing large group available for sale before the expanding groups
start to devour each other - if legislation and the competition
authorities allow it.
If US company Gannett wins the bidding, it will, through its UK
subsidiary Newsquest, become the largest regional publisher in the UK
All the signs are that this is exactly what will happen.
Even though the Guardian Media Group is sitting on a surprisingly large
pile of pounds 200m in cash from disposals, mainly of its TV interests,
the likely purchase price of more than pounds 700m should prove too
rich. Such a large move would have to be approved by the naturally
cautious Scott Trust, which ultimately controls GMG.
The other contender, Johnston Press, does not lack the ambition, but
Freddie Johnston and chief executive Tim Bowdler have little appetite
for overpaying. They lost out to Gannett in the last round of the
regional press tour - at Newscom - for precisely that reason.
With the US newspaper industry having one of its best years ever, thanks
to all the dotcom ads, Gannett shows no sign of running out of
money.
In the past two months, it has spent dollars 3.6bn (pounds 2.4bn) on
acquisitions in the US.
Its passion for buying regional newspapers, particularly in the UK, is
interesting for several reasons. If Gannett buys RIM, it will have
managed to become the largest publisher in the UK industry in a campaign
lasting less than 18 months. It will have three large media groups to
thank for making it all possible - Reed Elsevier, Pearson and United
News & Media.
Before Gannett came along, Newsquest had been created from purchases of
the regional newspaper interests of Reed and Pearson. Two years ago,
United very generously decided to sell what is now RIM for about pounds
380m.
It is not easy to calculate just how much their decisions to get out of
regional newspapers has cost Reed, Pearson and United because there have
been further acquisitions along the way. But it is clear that their
disdain, fashionable at the time, for mature industries such as regional
newspapers, has destroyed hundreds of millions of pounds of potential
value.
It has made Gannett executives happy people and if it buys RIM, it will
make chief executive Chris Oakley very happy too - sitting on the odd
pounds 30m or so. Oakley, who has no taste for Rolls-Royces or large
yachts, will probably use at least some of the money to buy a nice
little newspaper group somewhere.
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