Rejuvenated regional papers should reflect on Mirror’s cracks

I used to think regional newspapers were a backwater. Perhaps you did too. But events of the past year or two have forced a rethink. First there were those heavy-duty mergers and management buyouts, not least those of the Reed and Westminster Press regional titles to form Newsquest and those of United Media’s titles to form Regional Independent Media.

Now two regional press groups – the aforementioned RIM and Trinity – are actually vying to take over Mirror Group (assuming that Trinity’s interest is reignited now that Mirror Group chief executive David Montgomery has gone).

Regional press groups used to give every impression of torpor, but not any more. RIM and Trinity have demonstrated that local newspaper baronies are as prone to ambition as any other commercial enterprise.

There are still a few moribund enterprises and some old family firms, but their numbers are declining. Portsmouth & Sunderland Newspapers is one of the last remaining medium-sized outfits, and one where family interests account for 40 per cent of the shares. It’s very far from moribund, and is currently being courted not only by Johnston Press (whose takeover offer valued the company at 90m), but also reputedly by Newsquest and by Charles Villiers, who used to run Scottish Radio’s newspaper division.

Suddenly, regional newspapers are sexy in the City. But it still comes as a surprise that their managements are now bold enough to consider snapping up a national tabloid like The Mirror. It may have something to do with The Mirror’s peculiar circumstances, riven with boardroom feuds, its chief executive vilified mainly on account of his dour demeanour and inability to get on with scores of journalists.

It’s worth reiterating what others have said about Montgomery. His business record is not a bad one: he rebuilt the shattered Mirror Group after Robert Maxwell’s death, settled with its pensioners, restored it to profit and re-established shareholder confidence. Then he sought to build the business: he bought 20 per cent of what is now Scottish Media Group, acquired regional newspapers in the Midlands and Northern Ireland, and tried to get into television by way of Live TV.

Live TV is a standing joke (and a costly one, if it’s true that it is still losing money), but it was not inevitable at its launch that a cable-only TV channel must necessarily fail.

His biggest failures seem to have been lack of organisation and clear objectives (the abortive plan to relaunch the Sporting Life as an all-sport newspaper is evidence of that) and the decision to take a half-share in The Independent, which Montgomery and/or Mirror Group proved incapable of running or understanding.

That failure offers a warning to the regional newspaper groups now thinking of acquiring The Mirror. Running a national tabloid newspaper must have looked pretty similar to running a national broadsheet: both employ journalists, both require printers and distribution networks and computer systems and advertising departments. News International has run tabloids and broadsheets in tandem for years. Yet Mirror Group couldn’t handle the Indie.

Superficially, regional newspapers make as good a fit with a national tabloid as The Mirror did with The Independent. The Daily Mail and Northcliffe Newspapers cohabit happily and successfully. So do The Guardian and the Manchester Evening News. And yet other national newspaper groups, including Pearson (the FT and Westminster Press) and United have got out of regional papers. Perhaps they’ve realised something that Trinity or RIM may be about to learn the hard way – you can cut costs by combining regional and national titles, but achieving real “synergies” may be rather more difficult.

Of course, the bids from RIM and Trinity could come to nothing. Trinity in any case would have to cope with a reference to the Monopolies & Mergers Commission: it owns Northern Ireland’s leading newspaper, the Belfast Telegraph, while Mirror Group owns the number two title, the News Letter. If either succeeds it’s not impossible (though unlikely) that the national titles might be sold.

But whatever the outcome, all this excitement can only do the regional press good with shareholders and, especially, advertisers. Larger regional newspaper groups may offer their proprietors little but increased negotiating power with newsprint suppliers, but all the coverage in the City pages of the sector’s consolidation in the past two or three years has helped to raise its profile and give the impression that the companies in it are serious and well-run.

That some of those companies are bold enough to consider taking over The Mirror simply reinforces the impression of an industry that’s going places. Acquiring a national newspaper group might do for local papers what Classic FM and Virgin and Talk did for local radio.

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