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Local monopolies will kill regional press, NUJ warns OFT

2 April 2009

The UK regional press will go into a "spiral of decline" if the government scraps the rules restricting mergers among the big groups, the NUJ has warned. Faced with a drop in their huge profits of recent years, newspaper owners have been lobbying hard for the rules preventing the growth of monopolies to be lifted.

The Office of Fair Trading (OFT) has launched a "review" of the regulations. In its formal response, the NUJ has told the OFT that the outcome, if they did, would be a disaster for local journalism.

The union points out in its submission that the intense profiteering by the four main groups – Trinity Mirror, Newsquest, Johnston Press and Northcliffe Newspapers – and their lack of investment in journalism and new media, means they cannot continue to control the local press.

"The inevitable fact is there is no longer the prospect of sufficient returns from local newspapers (and their websites) to sustain a model of ownership that requires a quarter or more of their revenues to be siphoned off to holding companies and their shareholders.
"If they were now to be permitted to consolidate their control of substantial areas of the country there would simply be a continued contraction of the industry – more than 50 papers were closed in the second half of last year – with fewer titles, even fewer journalists and a rapid fall in the amount and quality of news. It would be to accelerate a spiral of decline."

The NUJ response informs the OFT that there is "anger among journalists about the way the businesses have been run, very similar to that of the population at large about the banks."

What the industry needs, the NUJ submission says, is:

"new capital and new managers. The NUJ believes that new companies would enhance competition in the sector, both through new launches and by taking over existing publications, buying individual titles or series on favourable terms from the present publishers. The latter course should be encouraged by such regulatory means as can be found."

The union says that it wants all takeovers sanctioned by the OFT and Competition Commission to carry enforceable conditions. These could include:

"commitments to invest in newsgathering, with a specified proportion of profits going into editorial resources and requirements over staffing ratios.
"There should be undertakings to retain titles in circulation, with locally and originally produced content. Companies could be required to make a convincing economic case when looking to cut jobs."

Tags: , merger, submission, oft, newspapers, regional newspapers, competition commission, trinity mirror, newsquest, johnston press, northcliffe, ownership, media plurality