News Corp said today it had failed to reach agreement on the sale of the portfolio of more than 100 regional and community newspapers in negotiations with Australian Community Media (ACM), run by media veteran Antony Catalano.
The company will now focus on a restructure of its business to focus the company on “maximising digital and growth opportunities”.
The move leaves the future of some Queensland titles, including the company’s Quest Community newspapers in doubt.
News Corp suspended printing of 60 community newspapers, including Quest suburban titles on April 1, in response to the COVID-19 economic shock.
In a note to staff today, News Corp Australasia executive chairman Michael Miller said the talks with ACM had failed to result in a sale.
“In recent weeks we have been undertaking a review of our Australian portfolio and structures and have had discussions with the most logical acquirer of our regional and community titles,” he said.
“Those discussions have not resulted in a transaction and we are now considering alternative structures to best focus News Corp Australia on maximising digital and growth opportunities.”
The company’s national newspaper, The Australian, reported today that points of contention in the negotiations included the sale or lease of News Corp printing plants and the mastheads that would be included in any deal.
News Corp’s community news focus has shifted in recent years to single- journalist digital-only titles, designed to drive online traffic and subscriptions –in contrast to the free model, which was traditionally built on wide print distribution.
One of the masterminds behind that strategy, John McGourty, was today appointed national editor of News Corp’s community masthead network – one of a raft of editorial appointments made today.
Miller said McGourty’s appointment “acknowledges his success in establishing digital only local news mastheads and driving editorial subscriptions through hyper local news”.
News has held a powerful control over regional media through its ownership of papers such as the Townsville Bulletin, Cairns Post and Gold Coast Bulletin and in 2016 it paid $36 million for the 12 dailies and 60 community papers that were in the Australian Regional Media ownership (APN).
That gave it an almost blanket print coverage of that state with mastheads in Rockhampton, Gladstone, Mackay and the Sunshine Coast.
But according to Professor of Communication and Creative Industries at QUT, Terry Flew, the commercial value of the titles is now questionable.
“They certainly are a fraction of the value they once held,” he said.
“For all print publications, the two issues are future of the print form and how COVID-19 has accelerated their demise.
“They have a significant role and it’s been a question that governments have been wrestling with. It’s not clear what the alternative may be.”
Flew pointed out that renowned investor Warren Buffett had championed regionalism and invested in US titles, but even that had been diminished by the inability for smaller publications to attract a viable subscription base.
He said there was a strong lobby group within the Federal Government among Nationals and regional Liberals. Deputy Prime Minister Michael McCormack is a former editor of Wagga Wagga’s Daily Advertiser newspaper.
However, despite some funding to help regional papers there did not appear to be a clear framework to help.
If the sale went ahead, Flew said it would be a significant boost to print media diversity in the state.
Under the proposed News-ACM deal, about 100 titles would have been sold to ACM, which itself was bought by Anthony Catalano in 2019 from Nine for $125 million. Its titles include the Canberra Times, Newcastle Herald and Illawarra Mercury, which were all part of the Fairfax stable until it was bought by Nine.
Only last week News Corp announced a $US1 billion ($A1.5 billion) loss in the March quarter after taking a $US1.1 billion ($A1.7 billion) impairment charge against its Foxtel and News America Marketing assets.
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