GCap and DMGT can benefit from pulling out ofasset auction

Unfortunately, I was not invited to the funfest that was last week's Market Research Society annual conference. But some in attendance claim that the event got pretty heated. The big issue? Blue-chip companies holding reverse auction pitches for market research services.

Some delegates were upset at the growing trend that requires agencies to tender a price online, only for the client company to take the lowest price bid to rival companies to see if they would undercut it. "Why not just do it on eBay," was the obvious conclusion.

Maybe GCap Media and Daily Mail & General Trust should have taken this tack in their recent attempts to sell off their assets - in GCap's case, nine of its stations in the South-West and North Wales; in DMGT's case, its regional newspaper division, Northcliffe. In the event, though, it seems the vendors decided to take their assets off the market rather than play a game of "lowest bid wins" with the apparently tight-fisted bidding companies.

Or maybe GCap's stations and Northcliffe were overpriced. It is a difficult time to demand a premium for your unwanted assets, with ad revenues in the doldrums and regional newspaper readership falling through the floor.

Despite selling off its Aberdeen titles to DC Thomson this week, DMGT is now trying to make a fist of justifying its commitment to regional press. It has merged Northcliffe with Associated Newspapers under the leadership of its managing director, Kevin Beatty, the former managing director of Northcliffe, who is winning friends within Associated for his straightforward, uncomplicated approach.

However, the move is motivated by cost-cutting rather than a better offer for readers and advertisers. With Northcliffe's regional support structure significantly reduced, total savings are expected to reach £45 million, rather than the £20 million envisaged. Further editorial cuts have not been ruled out, but what some customers are calling for is more dynamism from Northcliffe's regional sales operation. This would also improve Northcliffe's margins.

Over at GCap, things seemed even more of a mess as it released a trading statement showing fourth-quarter revenue down 17 per cent. This coincided with the statement that it remains lumbered with the analogue stations it was trying to sell (the few bids it did attract were rumoured to be around half GCap's asking price of £50 million).

Some in the City took the view that GCap had bungled the sale, but other sage observers adopted a "wait and see" approach, hoping changes to station programming will have a positive impact on GCap's listening figures.

Either way, it seems there are actually worse places to be this week than in Charles Allen's seat at ITV.

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