Advertisers' Telegraph bid fears should worry DMGT

Over my dead body doesn't really cover it. You could imagine that Tony Blair would rather have his eyes squeezed out of his head in a vice, 'Casino'-style, than let Lord Rothermere's Daily Mail & General Trust get its hands on the Telegraph Group, writes Ian Darby.

Reports have suggested Downing Street is none too chuffed with DMGT's supposed "knockout" £700m bid. Number 10 is said to be upset about the "spiteful" tone taken towards Blair and his cabinet rather than the papers' general right-wing position.

So, assuming DMGT and its new venture-capital partner, CVC Capital Partners, fight off the Barclay brothers to win the Telegraph bidding war (owner Hollinger is expected to decide by next week),it is likely to face difficulties in winning clearance from a government that could put every possible hurdle ahead of it.

There may be other objectors, too, notably advertisers.

The combination of the Telegraph and Mail titles under one owner is a heady brew for any publisher, despite the high asking price for the Telegraph Group. Covering retired colonels and every apron string in middle England, DMGT would have a large share of ABC1 readership.

It seems that executives at Associated Newspapers have gone to great lengths to assure the media that the Telegraph would be run as a separate entity with standalone commercial and editorial operations. CVC's involvement will dilute DMGT's influence -- this is another key part of the message. But this is sophistry, opponents say. And some agencies are fearful of a DMGT takeover. "It would be a fucking disaster," one press director says with typical style and understatement.

There is plenty of support among agencies for the view that DMGT will be too powerful if it wins the Telegraph. Many think Associated is already too strong and can impose aggressive sales practices in key markets (witness the Evening Standard in London) because of its strong readership and lack of competition.

Associated directors are fond of countering with the argument that each of their titles is traded separately and they don't use their combined weight to beat up agencies. And newspaper groups are even fonder of claiming that agencies hold all the power. Some paint a picture of agencies operating as a cartel when buying press, with rival press directors meeting at cosy dinners to decide strategy on whipping media owners into shape. This is an over-simplistic view but, now that so much buying power lies in so few places (WPP's Group M and Omnicom's OPera bill close to £1bn each), agencies may have a hard time justifying a competition argument against DMGT.

But expect the Department of Trade and Industry -- and Ofcom, if required -- to be listening very intently.

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