SUMMARY OF
THE GUARDIAN AND MANCHESTER EVENING NEWS PLC AND THAMES VALLEY
NEWSPAPERS: A REPORT ON THE PROPOSED TRANSFERS OF NEWSPAPERS
On 12 October 1993 we were asked to investigate
and report on the proposed transfers to The Guardian & Manchester
Evening News plc (GMEN) of newspapers published by Thames
Valley Newspapers (TVN), a division of Thomson Regional
Newspapers Limited (TRN) (see Appendix 1.1). The TVN newspapers
are circulated and distributed mainly in the Reading, Wokingham
and Bracknell areas of Berkshire.
GMEN told us that the principal attraction of the TVN
business was its modern printing and production facilities. These would
be able to handle GMEN's Surrey Advertiser titles, for which it had to
find new printing arrangements, in addition to TVN's existing titles.
We consider the public interest issues arising from
the proposed transfers under three headings: accurate presentation of
news and free expression of opinion; concentration of ownership and competition
for readers and advertisers; and employment and employment-related matters.
GMEN told us that its regional and local newspapers
were expected to serve the needs of their local communities and did not
serve as vehicles of any particular political or social outlook or bias.
Each editor was free to exercise his or her own judgment over news and
editorial content. GMEN said that while the editors were ultimately answerable
to the Scott Trust, which owned all the ordinary shares of GMEN, in practice
the Trust had never questioned or attempted to interfere with any editor's
decisions. GMEN's editors had a right of appeal to the trustees if there
was a conflict with GMEN management on matters of editorial freedom.
GMEN told us that the policy of editorial freedom and the independence
of TVN's titles would be preserved. We received no evidence from other
parties which cast any doubt on this assurance.
GMEN is a long-established and reputable publisher
of national and regional newspapers. We see no reason to believe that
GMEN will change its existing policy in respect of editorial independence
and we conclude that the accurate presentation of news and free expression
of opinion would not be endangered by the proposed transfers.
At the national level the proposed transfers would
increase GMEN's share of regional and local newspapers by 0.4 per cent
from 3.9 to 4.3 per cent but leave unchanged its ranking as the eighth
largest UK publisher of regional and local newspapers. The transfers
would also reduce the market share of TRN, the largest UK publisher of
regional and local newspapers, from 11.3 to 10.9 per cent. The marginal
increase in GMEN's market share is not a matter for concern.
At regional and local level, TVN's newspapers and GMEN's
Surrey Advertiser series are mainly circulated and distributed in adjacent
areas. There is, however, some overlap in two small areas. In the Sandhurst,
Crowthorne and Yateley area to the west of Camberley, titles recently
acquired from Argus Press Ltd (Argus) by Trinity International Holdings
plc (Trinity) have a significant market share. In the rural area around
Basingstoke, both TVN and GMEN have small market shares and competition
is provided by Southern Newspapers PLC (Southern Newspapers) and by titles
recently acquired from Argus by Trinity. These titles have a much greater
market share in this area than do the TVN and GMEN titles.
While the proposed transfers would result in a limited
increase in concentration of ownership and some diminution in competition
for readers and advertisers in these small areas of overlap, we are satisfied
that the presence of newspapers published by Trinity and Southern Newspapers
would ensure adequate competition. We conclude, therefore, that the proposed
transfers would have no material adverse effects on competition for readers
and advertisers, especially as with the backing of Trinity's resources
we expect the former Argus titles to compete more vigorously.
On the question of employment, we have noted TVN's substantial
losses, particularly at the Evening Post. Although these are now reducing,
we believe that some job rationalization is likely to be necessary if
the TVN titles are to become economically viable. We have also noted
GMEN's intention to do everything it can to ensure that the TVN newspapers
continue, but on a profitable basis, and the possibility of additional
jobs being created if GMEN is successful in obtaining new third party
printing contracts. We are also satisfied that proper arrangements have
been made for TVN staff who are members of TRN's pension scheme. We conclude,
so far as employment and employment-related matters are concerned, that
there is no justification for opposing the proposed transfers.
We conclude that the proposed transfers may be expected
not to operate against the public interest.
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Last Revised: May 1999
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