British buy up regional papers
The purchase of the Leinster Leader Group and Local Press Ltd by Johnston Press has made it the largest owner of regional and local newspapers on the island of Ireland, with 40 titles.
By Emma Browne
The acquisition of the Leinster Leader Group and Local Press Ltd by Johnston Press in the past week has given the company ownership of 23 per cent of the local and regional publications on the island of Ireland, with 40 titles. In Ireland alone it owns 15 titles.
The deal reflects two trends that have emerged in the Irish regional newspaper market in the past few years: firstly, the consolidation of the regional market into ownership by five large companies, and secondly the emergence of British-based media companies buying titles here.
The bulk of the Irish regional press is now owned by five main players – Independent News and Media plc, Thomas Crosbie Holdings, the Johnston Group, Dunfermline Press and Alpha Newspaper Group. Dunfermline is a Scottish-based company which has bought five titles since 2002. Alpha Newspaper Group is a Northern Irish company owned by John Taylor, the former Unionist MP. It has purchased five regional titles south of the border since 2003.
Traditionally the regional press were family-run businesses, but now fewer than ten titles remain in family hands. The sale of the Leinster Leader Group to Johnston means that there are now only two Irish newspaper groups with stakes in the regional market.
Johnston Press is the fourth largest regional newspaper owner in the United Kingdom, with a combined circulation of 8.6 million from their regional titles. The company is also involved in the internet business – it owns over 175 websites.
Three months ago Johnston Press bought 35 titles from Scottish Radio Holdings which included five titles in Ireland – the Kilkenny People, the Longford Leader, the Leitrim Observer, the Tipperary Star, and the Nationalist. In three months Johnston has become the largest regional newspaper owner in Ireland, with 15 titles. Independent News and Media owns 12 provincial titles; Thomas Crosbie Holdings owns 11 regional titles.
Last week Johnston said it would like to expand in Ireland and buy more titles. Tim Bowdler, the acquisitive chief executive of Johnston Press said: "There are a number of independently-owned publications in Ireland, and we're still very interested in acquisitions." But first the company is going to concentrate on its recent purchases: "Our primary focus is getting to know the businesses we have acquired and getting to know the market."
It are keen to tap into the newspaper website market here (in the UK this area has seen a growth of 40 per cent). But it denies claims it is going to consolidate the titles. "Local newspapers are nothing if they are not local," said Tim Bowdler.
Johnston paid €138.6 million for the Leinster Leader Group (many thought this was overpriced – it was originally put on sale for €100 million and the Group has debts of €25 million). It paid €95 million for Local Press Ltd.
In the deal Johnston acquired all seven titles from the Leinster Leader Group – six weeklies and one evening paper – the Dundalk Democrat, Leinster Leader, Leinster Express, Limerick Leader, Limerick Chronicle, Offaly Express and the Tallaght Echo. The Group has a weekly circulation of 92,000 – 72,000 of these are weekly paper sales and 20,000 from daily sales. In the deal with Local Press it acquired 12 titles – three of which are titles south of the border – Donegal Democrat, Letterkenny Listener, and Donegal on Sunday.
Johnston was attracted to Ireland because of the potential profits that can be made here.
Local Press Limited made an operating profit of stg£4.9 million last year, a 54 per cent increase on its profits a year before. The Leinster Group made a profit of €21.1 million – 15 per cent up from the previous year.
The Johnston/Leinster deal is subject to approval by the Competition Authority and the Department of Enterprise, Trade and Employment.
In the past, the Competition Authority has insisted on conditions attached to radio mergers in order to maintain competition, but until now have not done so for any newspaper mergers.