CIoJ gives evidence to Office of Fair Trading on media mergers

A daunting picture

The Chartered Institute of Journalists painted a daunting picture of the future when its team gave evidence to the Office of Fair Trading’s examination of proposals to loosen the media merger regulations.

Referring to a Channel 4 News interview on March 14 with Mr Roger Parry, leader of the recently-formed Local Media Alliance, the Chairman of the Institute’s Professional Practices Board, Robin Morgan, told the nine-strong OFT inquiry panel that the proposals would lead to a comprehensive development of websites to enable these publishers to effectively create local radio stations, as well as a similar challenge to regional television stations and, most frighteningly, the eventual abolition of all morning and evening newspapers and their replacement by weekly editions.

“Is that what Britain wants or needs? That interview was so ominous it should not have been shown before the Watershed!” Morgan said.

Disturbing proclamation

The Institute was invited to appear at the OFT’s off-Fleet Street headquarters, along with the National Union of Journalists, on March 20 – less than a week after Roger Parry’s disturbing proclamation. CIoJ General Secretary Dominic Cooper and Past-President Charlie Harris joined Robin Morgan to present the Institute’s case.

Just as disturbing to the Institute’s team was the fact that throughout the OFT’s discussion document on the media merger regime, not one mention was made of readers’ interests.

“The references to public interest appear to be confined to merger effects on advertising and the plurality of news sources but nowhere is the question of whether readers – the ultimate customers – will be better or worse served by a merger,” Morgan told the panel.

“This omission needs to be rectified. The Chartered Institute is asking that whether the rules are changed, or not, this opportunity is taken to introduce specific requirements whereby the company that is taking over is required to make a binding statement of intent detailing how it will preserve or enhance the editorial content of the taken over publication to safeguard content value to readers.

“Any sought-after change from this declared statement will have to be examined and approved by a competent Government authority, such as the OFT, the Competition Commission, or by a body set up for that purpose.”

The proposals from the Local Media Alliance are truly frightening and we told the OFT: “The Chartered Institute recognises that our industry faces a formidable crisis – but much of it is of its own making, or rather the making of a group of proprietors who now find themselves unable to pay the price of their past actions. Roger Parry admitted so in his interview.

Massive spending sprees

“It is significant that the Local Media Alliance is made up of companies that have been on massive spending sprees in the past decade with, seemingly, little or no thought to the consequences of an economy turning sour. They have resorted to wholesale redundancies, massive expenditure cuts, closing titles, closing branch offices, reducing coverage and centralising printing resources in many cases.

“These papers are still making trading profits. It is just that they cannot afford the hire purchase repayments.

“We have not seen the same drastic actions from what remain of the independently-owned regional and local media, which suggests they are managing to cope with the effects of the present recession in a better way – probably by sticking with the tried and trusted traditional remedies of newspapers dealing with troubled times.”

As an example of this the Institute’s representatives drew attention to a Martin Wainwright interview with Sir Ray Tindle, Chairman of the Tindle newspaper group, which appeared in The Guardian on November 17. (www.guardian.co.uk/media/2008/nov/17/ray-tindle-local-press-newspapers).

Sir Ray has built up his stable of over 200 titles by buying out of revenues or reserves, and has not borrowed for that purpose. He has a firm policy of covering local news in depth – and as a result retains the support of his readers and produces a healthy group profit.

The Institute cautioned the OFT against being swayed by “the siren song of the techies” who see the Internet as the be-all-and-end-all of future news dissemination.

“The Internet and websites have their place but ‘in addition to and not instead of’ alternatives to traditional newspapers. There are good reasons for this belief. The Internet is not universal, nor will it be for many years to come in Britain. People on low or fixed incomes, such as pensioners or families in reduced circumstances cannot afford the high price of computers, nor the necessary broadband subscriptions.

“We believe that as much as 40 per cent of the British population falls into these categories. There are also many people who do not use the Internet as their prime source of news and in our estimation it may be that as much as 60 per cent of the British population still rely on newspapers as their prime source of news.

“A recent Ofcom survey found that 72 per cent of the elderly have no access to the Internet; 95 per cent of over-65s use other media as their prime source of news; and two-thirds of women are uncomfortable using the Internet.”
Local democracy

The OFT also wanted the Institute’s views about Local Authority newspapers. We made three points:

• We are, broadly against them as an alternative to our traditional newspapers, largely because of their lack of critical examination.
• We are in favour of national and local government and other public authorities being instructed to place more public interest advertising in the commercial press and, certainly, all job and contract adverts that are funded from the public purse.
• We are firmly against any direct government financial intervention to support commercial newspapers because of the real or imagined inferences of state control.

The full text of the CIoJ’s submission to the Office of Fair Trading, may be found at CIoJ submission to the OFT – March 2009 .

Posted on by CIoJ in News

2 Responses to CIoJ gives evidence to Office of Fair Trading on media mergers

  1. Daphne

    Interesting article … I am not sure I have a lot of confidence in the Competitions Commission following the Lloyds TSB take over of HBOS etc Good luck

  2. Amanda Brodie

    As one of the many journalists who have been made redundant by one of these Media Alliance newspaper groups, I wholeheartedly agree with the CIoJ’s stance on this.
    Thank goodness someone is out there fighting for us. Well done to the Institute – keep up the good work.

Reply to Amanda Brodie