Newspapers must merge to survive, warns Independent News & Media

Legislation intended to protect media plurality is failing do its job because it is ignoring the “highly challenged” conditions in news publishing, Independent News & Media has claimed in a blunt statement on the health of Irish newspapers.

The company, which recently issued a profit warning amid falling circulation and advertising revenue, said it was “essential” that newspaper industry consolidation be allowed to take place.

“The alternative is that these rates of decline will accelerate resulting in the closure of newspaper titles, the loss of managerial, editorial and production jobs, and ultimately the loss of diversity of voice.”

Current regulation “plays into the hands of foreign media interests”, which may have large interests in other markets and a limited presence in Ireland, it warned.

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"The Irish market, like others, is also faced with competition from digital news sources such as Google and Facebook, who operate with freedom outside of regulatory constraints."

INM, in which Denis O'Brien is the largest shareholder, said the regulatory process around its proposed but later abandoned acquisition of regional newspaper group Celtic Media, "raises a number of concerns".

The company, which publishes the Irish Independent, Sunday Independent, Herald and Sunday World newspapers, said the deal conditions recommended by the Broadcasting Authority of Ireland were "unhelpful in terms of the overall viability of the transaction".

This was despite a conclusion by UK-based consultants Communications Chambers, commissioned by the broadcasting regulator, that the deal should be allowed to go ahead without the attachment of conditions.

The company walked away from the proposed acquisition in June, nine months after it was announced. It was reported to have baulked at the prospect of a condition requiring it to maintain employment at the Celtic Media titles at their current level.

Both INM and Celtic Media “incurred very material costs” throughout the process, the statement continued.

It said the “commercial and strategic logic” of the purchase “made perfect sense” and that “a significant opportunity” for both companies had been lost. There was “virtually no geographic overlap” between INM’s existing regional titles and the Celtic Media stable, it added.

Celtic Media publishes the Westmeath Independent, Westmeath Examiner, Anglo Celt, Meath Chronicle and Connaught Telegraph, as well as two free titles, the Offaly Independent and Forum.

INM said there would have been “no impact on the editorial integrity of the titles” and that jobs would have been “made more secure” as a result of the deal.

Although the Competition and Consumer Protection Commission (CCPC) ruled in November that the deal would not lead to a substantial lessening of competition in any market for goods, the Minister called for a full review on media plurality grounds.

Mr O'Brien, who owns 29.9 per cent of INM, also owns radio group Communicorp, the radio station behind Newstalk, Today FM, Dublin's 98 FM, Spin 1038 and Spin South West.

The broadcasting regulator’s report, which had been sent to the Minister by the time INM said the deal would not proceed, took into account submissions to a public consultation and the conclusions of an advisory panel appointed by the Minister as well as the assessment by Communications Chambers.

INM said it “co-operated fully” with the CCPC, the Department of Communications and the broadcasting regulator throughout the process, which it described as “very costly” and took “far too much time”.

A “real debate at policy level” is now urgently required, it said, to protect the heritage and legacy that lies in Irish newspapers.