The Guardian & Manchester Evening News plc and Thames Valley Newspapers: A report on the proposed transfers of newspapers

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Summary

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; concentra-tion 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 economical-ly 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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