Regional press seek to consolidate after virus hammer blow

Linda J. Dodson

For David Elms, KPMG’s UK head of media, mergers may be the only route to safety. “You have a scenario whereby the commercial foundations of these businesses are becoming more and more perilous, but they are perceived by many to be a crucial part of the media ecosystem.

“There has to be consolidation and you have to believe that it should involve at least JPIMedia, Archant and Newsquest – or two of the three.”

Even with mergers, keeping the regional presses rolling may prove impossible without government support. Ministers helped to plug a financial hole for newspapers during the pandemic with a £35m splurge on advertising. Cutting VAT on digital newspapers to zero also provided a fillip, but more so for the national press.

Meanwhile, the impact of an independent review into sustaining the UK press by Dame Frances Cairncross has been soft so far. Calls by Cairncross for a review of the digital advertising market have led the Competition and Markets Authority to pose new rules to grapple with the dominance of Google and Facebook.

Regional publishers have been lobbying for more help. Alongside a push for tech companies to pay for content, JPIMedia has asked the Government to adopt a Canadian-style subsidy to support newspapers in small towns. The Canadian government offers refundable tax credits, where publishers can claim back 25pc of some staff salaries.

For Parry, a more sustainable model may not even come from the current players. He believes local newspapers could be funded in the style of business improvement districts, where private businesses top up council payments for services.

He says: “If you got the merchants together in a typical town or village to fund Christmas lights, it wouldn’t be such a big jump to say, ‘if we don’t do something there will be no local news’. There would have to be some form of subscription and a small amount of advertising.

“Why don’t they exist at the moment? Well, it is because you have still got the dying embers of the purely commercial local newspaper business. The challenge is how do you get there from here?

“Perhaps it only happens when the local newspaper business goes toes up – but you will want people to move rapidly into that void.”

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