Hip-hip hooray for Lords Stevens and Hollick. The merger of their two
companies lays down a benchmark for the brave new media world. Theirs,
probably the first of several such deals, is a bold move and worthy of
applause, for it is an attempt to carve out a territory where British
media companies need not fear domination by their world counterparts.
The City certainly sees it so, moving quickly to mark up shares in both
But what are the likely consequences of the merger for advertisers?
Certainly, the new company is very much a British one. It isn’t a world
player, unlike Rupert Murdoch’s News Corporation, nor a European one.
Nevertheless, the news is good for both Express titles. Lord Stevens may
continue to be at the helm of the papers, but there should be more
resources to invest in them. As part of a larger group, there will be
less pressure to use the papers as cash cows to prop up United’s
dividend. Instead, the new company can take money from other parts of
the group to invest in the papers.
That is cheering for all those who long for decent competition in the
mid market. But what of the Daily Star? A hard-nosed entrepreneur like
Hollick may be less wedded to it than Stevens, whose baby it clearly is.
Second, and perhaps of greater long-term significance, is the potential
linkage between United’s strong regional newspaper portfolio and
Meridian’s TV interests, specifically Channel 5 and whatever it might do
with digital TV. For if there is one area where the benefit should
emerge, it is between local newspapers and ‘local’ TV of the possibility
offered by Channel 5 and digital.
Further out, the new company’s ability to orchestrate cross-media deals
with big advertisers will be a true test of the merger’s synergies. For
all the talk of integrated media companies, advertisers have found these
to be singularly lacking. It would be nice to think this might change.
Then it won’t be just shareholders who benefit.