Competitors At Heart, Newspapers Find It Sometimes Helps The Bottom Line To Co-operate

Philip M. Stone September 5, 2008

The broadsheet Daily Telegraph in the UK this week proudly relaunched its sparkling new color-on-every-page newspaper and, of course, it pulled out all of the promotion stops to ensure this would be a hit with advertisers and readers. What it didn’t brag about, however, is that the newspaper is now being printed by its arch-rival, The Times.

The Telegraph had pulled out early from its print joint venture with Richard Desmond, owner of the Express and Star papers – the breakup was said to be acrimonious – and the two groups have yet to reach an agreement on winding up that relationship. The Telegraph’s contract there continues until next year although its newspapers are no longer using those presses.

One can only wonder what kind of deal Rupert Murdoch last year made to the ultra-rich Barclay brothers who own the Daily and Sunday Telegraph to get them to move their printing to his three new £650 million state-of-the-art printing plants, but with the immense spare capacity available after printing his four national newspapers it was obvious that the more third-party business those plants can bring in the quicker the investment pays off.

Thus bitter editorial rivals The Times and The Telegraph titles may be, but when it comes down to business this deal obviously suited both front offices. It meant The Telegraph could immediately have access to color on every page for editorial and advertisers and it didn’t have to make a huge capital investment to get there. If Murdoch can swing more such deals then he’ll have proven once again how his print investments continue to pay off.

What is happening in the UK is not so unusual these days when publishers are looking for every way possible to save money or earn additional revenue and that means a rivalry may be a rivalry but business is business. In Baltimore, for instance, The Sun is going to print the Washington Times. That’s a winner for both sides – the Times doesn’t have to make a large capital investment for new presses and for the Sun it’s additional revenue and more economies of scale that will help reduce costs and put its color presses to greater use.

No US market is more competitive than New York so it came as a bit of a shock when TheNew York Times reported a couple of months back that  Murdoch, publisher of the New York Post,  and Mort Zuckerman, publisher of The Daily News, were looking to combine some of their back-office business functions.

The talks, at the lawyer level, apparently had been going on for some time with the idea of combining printing, distribution and other back-office functions. The Daily News is thought to be about breaking even but The Post is losing around $1 million a week, so it has the makings of a win-win deal -- Murdoch would like to see an end to his red ink, and Zuckerman would, no doubt, like to see some profits.

Earlier this year Zuckerman announced he was investing $100 million in new color presses for the Daily News. A few years ago the Post invested nearly $300 million in new print facilities so one big question is how that gets reconciled.  

Murdoch seems in no doubt that color on every page is print’s future. Apart from what he calls his UK  “Cathedrals of Technology”  and the money he spent on the Post’s presses, his News Limited in Australia has announced an A$52 million investment  for a  new state-of-the-art printing plant in Townsville, Australia's largest urban center north of the so-called eastern Sunshine Coast in Queensland. It will not only print the Townsville Bulletin regional newspaper but the regional editions of competitive papers, too. 

Jason Scott, North Queensland general manager neatly summed it up, “People are still writing epitaphs for newspapers but the reality is that the industry is still building more presses today than it ever has.”

And then there is Hearst that announced in April that it was investing some $60 million in new printing presses for its Albany Times Union in New York. The investment will allow the newspaper to go color on every page when installation is completed by late 2011.

Color capability seems to be the major investment these days whether it means one’s own capital investment or using someone else’s facilities. Turkey's largest newspaper publisher, Hürriyet Gazetecilik ve Matbaacilik, owned by the Dogan Yayin Holding Group, has ordered the country’s first Goss Uniliner double-width press as part of a refurbishment of its Istanbul printing facility. The five-tower press will increase color capacity by 20 percent.

Dogan Yayin Holding publishes and prints ten daily titles including Hürriyet, Milliyet, Posta, Radikal, Referans and Fanatik with a combined circulation of 2,250,000 per day.

In Montreal last week the Globe and Mail announced an 18-year printing deal worth some C$1.7 billion with Transcontinental, Inc. Publisher Philip Crawley told The Globe, “There is a lot of mileage in high-quality newspapers. He said the deal was “a sign of our combined confidence in the future of the newspaper business.”

With that contract signed, Transcontinental says it is going to invest C$200 million next year and 2010 for new presses. The Globe will relaunch in late 2010 or early 2011, reducing its size and going all color. Also advertisers will have available glossy newsprint stock.

So, there are plenty of examples globally of publishers convinced that print newspapers are here to stay – they’re choosing different options to upgrade their abilities, including “making deals with the Devil” -- but underlying all of that is they understand that for print to not just survive but be healthy, too, that their newspapers will need all the bells and whistles that full color can provide.