Breaking news? Kent saves local press - Business Analysis & Features - Business - The Independent

Breaking news? Kent saves local press

The OFT is tipped to approve a merger deal that could show the way forward for regional newspapers. Laura Chesters reports

When a security guard was attacked by a baseball bat and samurai sword-wielding gang, when a model railway that took 30 years to build was saved from destruction, and when the Sittingbourne vs Maidstone United grudge match was called off because of floodlight failure, the Kent Messenger made sure its 112,000 loyal readers were the first to know.

These are just a few of the recent hot stories in the country's biggest-selling, weekday, weekly regional newspaper, with readers across Maidstone, Medway, Malling, Sittingbourne and Weald.

Once known as the Maidstone Telegraph, the paper is still owned by the same family that snapped up the title 31 years after its launch in 1859. Defying the downturn in local newspaper sales, Messenger-owner KM Group has even turned a profit for the first time since 2006.

Now this low-profile company, which owns a stable of weekly newspapers for different parts of Kent, awaits the outcome of an Office of Fair Trading (OFT) probe into its takeover of a group of Kent newspapers, which could have huge implications for the future of local papers.

KM Group has made a bid for seven titles owned by Northcliffe Media: Dover Express, East Kent Gazette, Folkestone Herald, Isle of Thanet Gazette, Medway News, the Thanet Times and the Herne Bay and Whitstable Times.

On 4 October, the OFT will conclude a 40-day investigation into the competition issues surrounding the acquisition. Most experts expect the deal to be approved, giving KM a monopoly of the Kent newspaper market. It already has a range of media interests in the county that include the Faversham News and the Sheerness Times Guardian, as well as seven local radio stations. Its titles reach 41 per cent of Kent's adults.

If the deal goes ahead, Northcliffe will be left with just the Kent & Sussex Courier. Archant is the only other significant newspaper group in the area.

Douglas McCabe, a media expert at Enders Analysis, says that approval would create a precedent to allow a restructuring of the entire local newspaper sector. "The inquiry could well find that it is actually better for one large company to own a group of papers in an area rather than two smaller ones whose futures could be at risk," he says. "If they get the go-ahead, this could be the starting gun for much bigger mergers."

Regional newspaper and commercial radio executives have been calling for the Government to relax ownership rules for years. There have long been rumours of mergers within the UK's regional newspaper groups as they try to find cost savings made necessary by falling circulations as the public's reading habits change – particularly as a result of free news on the internet – and advertising revenue slumps. The Daily Mail and General Trust, of which Northcliffe is a part, has certainly felt the sting. After a review of its operations, DMGT managing director Steve Auckland decided that it was time to sell the Kent titles even though Northcliffe bought them only four years ago.

However, there will still be problems, even in a sympathetic regulatory environment. A media investment banker says: "It is almost a sure bet that any sizeable merger within the regional newspaper sector would get the go-ahead [as against a few years ago]. But the problem is they are dying on their feet."

The Scotsman and Yorkshire Post-owner Johnston Press last month revealed a pre-tax profit plunge of close to 50 per cent and let go 180 staff. Advertising revenue fell by 10 per cent in the first half of the year and its net debt stood at £370m.

In the same month, Trinity Mirror's regional newspaper group announced that profit was down 36.3 per cent to £18.4m in the first half. It also axed 85 journalist jobs at the Scottish Daily Record and the Sunday Mail to cut costs.

The poor finances of a number of the sector's big players have led some experts to doubt whether consolidation is even possible. "There is not the capital out there for any deal to occur," says one corporate deal-maker. "The regulatory environment might be easier but the financial situation of this sector is incapable. Johnston Press, Newsquest and DMGT are likely to be sellers, but who would be the buyers?"

Top media investment banker Harry Hampson, of JP Morgan, counters: "Capital is not the only route for consolidation. We could see mergers and consolidation via share swaps. It doesn't just have to rely on fresh capital and new debt.

"Basically, without consolidation titles will close and the sector will die."

The growth of the KM Group may well be a sign of things to come. Regional newspapers might do best in the hands of companies that know their readers well – KM boss Geraldine Allinson is the great-granddaughter of Barham Pratt Boorman, who bought the Messenger in 1890 – rather than large corporates.

There are early signs that regional newspaper empires could flourish as readership numbers pick-up, online at least. Last week's figures from the Audit Bureau of Circulations found the number of daily visitors to regional news websites rose by more than 25 per cent in the first six months of 2011, while three of the biggest regional newspaper publishers reported online traffic growth of at least 30 per cent year on year for the same period.

The outgoing KM Group managing director, Graham Mead, told his readers last week: "Local newspapers are alive and well. Communities will always exist and they need news, information and places to share experiences."

Market dominance might have the negative connotations of inefficiencies and relaxed owners lacking the dynamism to create better products, but the OFT could conclude that it is the only way to save the industry.

Then, KM Group can hope that its local campaigns – which include getting the Medway area city status, preventing maternity services being moved away from Maidstone Hospital and fighting toll rises on the Dartford Crossing – will keep its readers coming back both to online and its newspapers for another 152 years.

News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
peopleThe report and photo dedicated to the actress’s decolletage has, unsurprisingly, provoked anger
Property
Home body: Badger stays safe indoors
property
PROMOTED VIDEO
News
The programme sees four specialists creating what they believe are three perfect couples, based on scientific matchmaking. The couples will not meet until they walk down the aisle together
tvUK wedding show jilted
Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Sport
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Arts and Entertainment
Robin Thicke and Pharell Williams in the video of the song, which has been accused of justifying rape
music...and he had 'almost no part' in writing it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Payroll & Accounts Assistant

£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week