Last week saw the long-awaited announcement that Trinity Mirror has agreed to acquire Richard Desmond’s premier press titles for around £200m. The landmark deal has raised eyebrows and generated debate over whether each paper will be able to maintain its editorial position at either end of the political spectrum.
Sam Postlethwaite assesses the likelihood of this happening and reflects upon Desmond’s contribution to the media world over the last four decades.
Trinity Mirror, the publisher of the Daily and Sunday Mirror, the Sunday People, the Daily Record and a number of smaller titles, has agreed to acquire Richard Desmond’s Express newspapers and celebrity magazines such as OK! for a price of around £200m. Trinity Mirror plans to finance the deal by stumping up existing cash and issuing new shares.
After accounting for inflation, the deal is significantly less than the £125m Desmond paid for the titles in 2000, such is the difficulty British newspapers have been facing in mitigating against sharp declines in print advertising. This is evidenced by Trinity Mirror’s latest revenue figures which show a decline of around 11 per cent in print revenues for 2017.
Why is it important?
The acquisition has been in the works for a while, however it’s still one of the most significant in the UK newspaper industry over the past decade.
For a start, the deal marks the end of Richard Desmond’s 43-year publishing career. Desmond will be remembered for publishing iconic titles such as Penthouse and OK!, as well as acquiring Channel 5 in 2010. Now, he will begin a slow retirement from the public spotlight, free to enjoy the lion’s share of the £106.7m cash portion of the deal.
However, the much larger question is how the Brexit cheerleader Daily Express will square its stance with its new Labour-leaning, Remainer-friendly sister publication, the Mirror.
We have somewhat been here before. Rupert Murdoch, often lambasted for his domination of UK commercial media, has done a decent job of not allowing for too much crossover between The Times and The Sun. Both papers, while catering to a right of centre audience, uphold dissimilar modus operandi and maintain entirely different tones of voice.
That said, this deal creates far more political questions than Murdoch’s usually pro-Tory titles.
What has the reaction been?
The reaction from most circles has been positive, although some parties emerge less victorious than others. Trinity Mirror’s share price jumped nearly 15% in trading on Friday morning before settling to a 6% rise later in the day, with investors drawn in by the apparent cost saving opportunities that the merger presents.
Desmond himself is, unsurprisingly, particularly pleased with the deal; despite the fact he bought the titles for significantly less almost two decades ago. He was quoted on Friday as saying Trinity Mirror was “the perfect home to make the most of their potential”.
Journalists at the Express titles will be slightly less sanguine, however, and decidedly more anxious about a P45 coming their way following the merger. Initial comments suggest that the sports and showbusiness desks may become one, although Simon Fox, Chief Executive, Trinity Mirror plc, has expressed initial optimism about keeping the political teams separate and preserving their editorial independence.
Trinity Mirror hopes to make £20m in annual savings from the deal, which will mean redundancies across the business and a review of poorly performing titles such as celeb-magazines New! and Star. Concerned workers have already begun to coalesce since the deal was announced on Friday. Workers’ union Unite has called for ‘urgent talks’ with Trinity Mirror over job fears, while National Officer for the Media Industry, Louisa Bull, levelled a parting shot at Richard Desmond by calling him, “one of the worst and tight-fisted of the many Fleet Street proprietors”.
There’s also a small question mark around whether the new enlarged group will run foul of the Competition Markets Authority, who vote on the deal in the next fortnight. However, this is unlikely given that the combined circulation will still be less than The Sun.
Financial considerations aside, it’s likely the editorial teams will now face increased scrutiny from the Twitterati; keen to see whether Fox will stick to his comment that “The Mirror is not going to go right-wing and the Express is not going to go left-wing… Decisions on what goes into each title will be entirely down to the editors”.
Last year the Express ran headlines such as ‘Corbyn’s plot to bring migrant workers to Britain’ and ‘At last! May gets tough on migrants’, while the Mirror featured a sympathetic ‘Migrants’ hell on Costa beaches’ and ‘Lies, lies, damned lies and Theresa May’. They’re going to be interesting bedfellows.