Merger fears as Trinity Mirror buys Guardian Media's regional titles

Published on Tuesday 9 February 2010 20:23

NEWSPAPER publishing group Trinity Mirror yesterday snapped up the Guardian Media Group's regional business, including its flagship regional daily, the Manchester Evening News, in a move that severs the Guardian's historical ties to the city and has implications for wider ownership in the sector.

Trinity Mirror agreed to pay 44.8 million for GMG Regional Media, although 37.4m covers the cost of releasing GMG from a binding contract payable to Trinity Mirror for printing the group's 22 titles. Only 7.4m cash is payable when the deal completes on 28 March. Analysts said the cash price "appears very low".

The Mirror publisher has several titles in the north-west of England, sparking fears the company will begin merging regional operations.

A spokesman for Trinity Mirror insisted GMG would remain a distinct operation within the Trinity Mirror stable. "MEN Media will remain as a separate business within our regionals division. There is no overlap between any of the papers we print with that area of Greater Manchester and no competition," he said.

But analysts said the insistence was likely to be part of an effort to persuade the Office of Fair Trading to wave the deal through.

Alex DeGroote, a media analyst at Panmure Gordon, said: "There is a regulatory issue there which is why they are likely to distance themselves from that. But there is industrial logic in what they are doing."

The National Union of Journalists has raised concerns over jobs, editorial independence and the consolidation of the publishing sector in north-west England. The NUJ said it planned to speak to the Department of Business Innovation and Skills over "concerns for diversity of information and media in the north-west".

DeGroote says the prospect of a Conservative government would allay pressures facing the media sector by loosening the regulator's grip. "A year down the line, if the Tories win the next election, you will see quite significant deregulation in the UK media sector," he said.

The OFT said it would look into the deal over the next few days.

GMG Regional has been troubled since its parent company revealed 90m losses for 2008-9 and started a stringent restructuring exercise. Since the 1960s, GMG relied heavily on the profitable Manchester Evening News for support but the title has been without an editor since Paul Horrocks left after 12 years at the helm in September.

Carolyn McCall, chief executive of GMG, said: "The Manchester Evening News and its sister titles have made a huge contribution to the fortunes of the group for the best part of a century."

She said Trinity Mirror, as the UK's biggest regional publisher, was "best placed" to develop the business.

Trinity Mirror has signalled it will relocate the MEN from its current Manchester location to the site of its print operations at Oldham, where the GMG titles are printed. The Trinity Mirror spokesman confirmed there was six months remaining on GMG's current lease at Scott Place. Chris Barry, a former business editor for the MEN, said it would be an "outrage if there was no editorial staff left in Manchester".

Shares in Trinity Mirror fell 2.4p to 135.5p

The deal cuts the historical ties GMG had with Manchester. The original Manchester Guardian was founded by John Edward Taylor in 1821. CP Scott, who edited the newspaper for 57 years, bought the paper in 1907 and pledged to uphold the liberal principles of its founder. His son passed ownership of the group to the Scott Trust in 1936.

The Guardian said Mark Dodson, chief executive of GMG Regional Media, and Ruth Spratt, managing director of MEN Media, had decided to leave the business.