Jim Mullen, former boss of bookmaker Ladbrokes and now the man running Reach, the UK’s largest publisher of local newspapers needs a “winner deal” for the company to become a title winner.
That winner, Mr. Mullen thinks, may be a deal to buy the 200 or so regional titles of JPI Media, which include The Scotsman and the Yorkshire Post. According to reports, although Reach has taken the lead late on in proceedings, it is ahead of Belgium’s Mediahuis, National World and Archant.
Additionally, this may be the only chance for the group to grab more scale in its local news business, which was built up through a £45m purchase of The Guardian’s 31 regional papers including the Manchester Evening News plus a £220m acquisition of Local World, which added another 83.
Mullen wants to focus on cutting costs and increasing digital revenues which would add to the profitability of Reach.
Cost cuts can be quickly achieved by centralizing roles, in both advertising and editorial functions. For example, integrating the recently acquired Express and Star titles has delivered £15m of annualized savings this year, which rises to £22m in 2020. Whereas, digital revenues can be increased faster than the current 10 percent by adding more readers and make money out of them more effectively.
As Reach advertising salespeople mention, it is ranked fifth in some league tables for UK website visits after Google, Facebook, Amazon, and the BBC.
However, the danger is that Reach misses this last chance by going at it too hard. A strategy of grabbing scale, pushing for synergies, and stretching for the last margins risks bringing great newspapers down. For example, Digital First Media in the US, which has been accused of killing highly valued local papers and among them Pulitzer Prize winners.
The key is to maintain the quality to keep readers onside. There is no “win” if people are not reading your news.
