The Light At The End Of The Tunnel Is A Single Bulb

Michael Hedges February 12, 2018 Follow on Twitter

Big media deals are always attention-getting. Media watchers wax on about consolidation, digital, jobs and competition. Money by the pile being what it is, most transactions of a certain scale are rather creative. Give thanks to the accountants and hedge fund managers for keeping the last light on.

UK publisher Trinity Mirror reached agreement, finally, to acquire two newspapers and a magazine owned by Northern & Shell. The deal has been under speculation or negotiation or both for more than a year. Merged, eventually, will be Trinity Mirror’s Daily Mirror, Sunday Mirror, People and more than 200 local and regional titles with Northern & Shell’s Daily Express, Sunday Express, Daily Star and celebrity gossip weekly OK! Trinity Mirror will also take-over Northern & Shell’s 50% stake in Irish tabloid Daily Star, partner being Independent News and Media (INM).

Illustrious Northern & Shell founder and chairman Richard Desmond’s pay-day will be GBP126.3 million (€144 million) plus a 9.4% stake in Trinity Mirror. The last sticking point, apparently, was a contribution to Northern & Shell’s pension fund for the next decade, about GBP70 million on top of the purchase price. The Financial Times (FT) (February 8) called it “one of the biggest shake-ups in the UK newspaper industry in more than a decade.” Of course FT publisher Pearson sold the title to Japanese publisher Nikkei in 2015 for GBP844 million.

The question all UK media wags were asking was - and remains - how well will staff of the reliably lefty Daily Mirror get along with staff of the reliably right-wing Daily Express and Daily Star. “The Mirror is not going to go right-wing and the Express is not going to go leftwing,” said Trinity Mirror chief executive Simon Fox, quoted by the Guardian (February 9). “They will absolutely all have editorial independence. Decisions on what goes into each title will be entirely down to the editors.”

Of course, there will be cuts, often referred to as efficiencies or economies. For a certain amount of time yet-to-be former Northern & Shell publishing staff will attend to their daily chores at the Northern & Shell building, the Trinity Mirror building being of insufficient size. For another, suggested Mr. Fox, sports coverage might best be handled by pool reporting. The companies will operate separately while competition authorities in the UK and Ireland do the due diligence.

"After many years of under-investment and one pay increase in the past decade, journalists working for Richard Desmond have been desperate for a new owner to provide the resources needed to help increase the readership and the success of the titles,” said National Union of Journalists (NUJ) general secretary Michelle Stanistreet, quoted by The Drum (February 9). “However, the NUJ is concerned that Trinity Mirror, with its long record of making cuts to its newspapers, will not be the knight on the white horse they were hoping for.”

Northern & Shell was founded by Mr. Desmond in 1982 to publish the UK edition of Penthouse, followed by other racy titles. His first big leap came in 2000 with the acquisition of Express Newspapers (Daily Express, et.al.) for GBP125 million. He was foiled in 2004 in a bid to acquire the Daily Telegraph. Buying Channel 5 was more lucrative; RTL Group taking GPB103 million (€125 million) for the loss-making TV company in 2010 then selling to US broadcaster Viacom in 2014 for GBP450 million. His next big venture, widely reported, is bidding for the license to operate the National Lottery.

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Media Mergers and Acquisitions