LMA submission to OFT: 'Why regional press merger regime must be modernised'

The merger regime must be modernised to reflect the realities of local media markets and safeguard the future of regional newspapers as multimedia businesses, the contry's biggest publishers have told the Office of Fair Trading.
In a 108-page report submitted yesterday for the OFT’s review of the Local Media Merger Regime, the Local Media Alliance, representing seven of the largest local media publishers alongside the Newspaper Society, stressed what they claim is the importance of allowing greater flexibility over newspaper mergers and acquisitions to enable the industry "to continue its transition into a successful multimedia sector delivering local news and information across print, online and broadcast platforms."
LMA chairman Roger Parry said:“This consolidation will support local efficiency and effectiveness to the benefit not only of the larger publishing organisations but also smaller publishers who will be able to grow their businesses through title acquisition or exchange that has previously been prevented” in his introduction to the submission, entitled The Case for Modernising the Approach to Local Media Mergers.
Despite the challenges currently facing local media businesses “a profitable longterm future for the industry is achievable,” he said. “It is the firm belief of the LMA members that print publications will continue to play a pivotal role in the local multimedia business of the future.”
The report argues that further consolidation would enable publishers to make necessary investments in media services and content, product quality, digital platforms and training, allowing them to capture economies of scale in relation to management, distribution networks, printing and more efficient sales structures while repositioning their businesses for growth.
The report outlines three arguments to support the industry’s view that changes to the merger regime are urgently needed:
• The highly competitive local advertising market enables local advertisers to exercise significant choice when allocating their media spend, and this choice has not been, and will not be, damaged by local newspaper mergers.
• Local audiences consume news and information content from a wide range of media, but local newspapers offer the only source of local investigative journalism. There has not been, and will not be, any damage either to audience choice or the local press proposition as a result of newspaper merger.
• The creation of publishing organisations with a clear focus on local media and with greater local scale (‘clusters’) are the most effective way to protect the viability of local titles and maintain plurality of editorial voice.