INM warns of job losses unless there is consolidation in the sector
Independent News and Media (INM plc) has warned that newspapers will close and journalism jobs will be lost unless there is consolidation in the sector.
INM, publishers of four national titles, including the Irish Independent, Sunday Independent and Independent.ie, has also said that future media merger transactions could be deterred owing to the lack of what it describes as a "fit-for-purpose" regulatory process, saying that the current system is too costly and "takes far too much time".
The country’s leading media group, which said that current regulation "plays into the hands of foreign media interests", issued a statement this afternoon in response to freedom of information (FOI) requests in respect of its planned but aborted acquisition of Celtic Newspapers Limited (CMNL) which publishes several regional titles including the Meath Chronicle.
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The proposed merger was approved by the Competition and Consumer Protection Commission late last year but later referred by Communications Minister Denis Naughten for a phase 2 examination by the Broadcasting Authority of Ireland (BAI).
Last June, nine months following the announcement of the transaction, INM and CMNL announced that they had decided to move forward on a separate footing and the transaction was terminated with both parties having incurred "material costs".
INM, which earlier this month issued a profit warning, said that it firmly believes that a "significant opportunity" for both INM and CNML was lost following the collapse of the proposed merger, adding that it had cooperated fully with the CCPC, the Department and the BAI throughout the process.
INM cited a number of factors for its profit warning, including a decline in circulation and readership, a decline in advertising revenues, ongoing uncertainty arising from Brexit, lower than expected growth in digital revenues and increased costs arising from legacy libel awards.
"Facing the combined challenge of declining circulation and advertising, and consumption via social media platforms – it is essential that newspaper consolidation takes place, be that on a regional, national or global basis," said the company in a statement.
"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."
INM said it believes that media plurality needs to be maintained.
"When compared with many other markets, the balance of media ownership in Ireland is diverse, with a number of publishers and broadcasters competing in the market," the company said in its statement.
"By the nature of markets, some participants are larger than others."
"Current regulation plays into the hands of foreign media interests, who may have large interests in other markets and a limited presence in this market. 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.
"A real debate at policy level is urgently required on media in Ireland, including on the balance between media ownership and the consolidation necessary to protect the sector into the future and the great heritage and legacy that lies in Irish newspapers. A fit-for-purpose regulatory process is also essential as the current system takes far too much time, is very costly and may ultimately deter further media merger transactions".