18 April 2014

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Northcliffe to axe two Kent weeklies in wake of failed deal

More than 35 jobs are to go after Northcliffe Media announced it is closing two of the seven newspapers it tried to sell to the KM Group.

In a move which may force the hand of regulators, the regional publisher is axeing free weekly the Medway News along with the part-paid-for  East Kent Gazette, both part of its Kent Regional News & Media subsidiary.

The move comes after the Office of Fair Trading effectively blocked its bid to sell the KRNM division and its seven weekly titles to local rival the KM Group.

Media regulator Ofcom had previously warned the OFT that papers could close unless the deal went through.

The other titles affected by the deal – which appear to be safe for now – were the Herne Bay and Whitstable Times, Isle of Thanet Gazette, Thanet Times, Folkestone Herald and Dover Express.

The KM Group withdrew its bid to buy the titles from Northcliffe on cost grounds after the OFT insisted on a full inquiry by the Competition Commission.

Today’s announcement by Northcliffe managing director Steve Auckland is likely to have far-reaching repercussions for the local press industry.

Ministers and MPs are now bound to come under pressure to step in to relax competition rules rather than allow the two newspapers – and possibly others – to go to the wall.

A company statement issued at 3pm today read:  “Northcliffe Media has announced the potential closure of the Medway News and East Kent Gazette as part of a review of its activities across Kent and the wider South East.

“The restructure is in response to the collapse of the proposed sale of Kent Regional News & Media following referral of the transaction to the Competition Commission by the Office of Fair Trading in October.

“This review has concluded that continuing to publish the Medway News and East Kent Gazette is not financially viable. Subject to consultation with staff both titles are likely to cease publication in early December.”

Steve Auckland added:  “As a result of the OFT’s decision on our proposed sale of Kent Regional News & Media to the KM Group we have no choice but to consider closing these titles with the resulting job losses.”

Today’s outcome was accurately predicted by Ofcom in a local media assessment carried out prior to the OFT decision.

It said:  “If advertising revenues, circulation figures and profits continue to fall at their current rates, then absent the merger, KMG and KRNM may in the future be forced to close or merge titles or perhaps even cease operating altogether, thereby resulting in a worse outcome for consumers.

“The evidence available to us suggests that the target business and the regional newspaper business of KMG will struggle to achieve profitability in their current form, which might lead them to respond by closing newspaper titles or reducing quality or both.”

Since the collapse of the deal, the KM Group has also announced up to 10 job losses at its own titles.

According to the most recent ABC figures, the Gillingham-based Medway News had a circulation of 53,235.

The East Kent Gazette, which covers Sittingbourne and the surrounding area, has an overall circulation of 13,975, of which around 7,900 are paid-for sales and the rest free pick-ups.

12 Comments

  1. GrimSqueaker

    Merry Christmas from Northcliffe – making local matter more (as long as it makes money).

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  2. Miss McDoogal

    Start of the annual pre-Christmas cull – those bonuses won’t find themselves.

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  3. Lawrence Shaw, Manchester

    Tactical and cynical closure to push for yet more corporate consolidation of our industry.

    The corporates refuse to allow anyone to start up a paper in competition to them by lowering rates and giving the papers away, but then complain they are not making enough money when they have a monopoly in an area and end up shutting titles anyway.

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  4. Gloomy

    So, KRN were all “hooray, we’ve not been bought” and put adverts in their papers stating as much, and then this? Good work KRN.

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  5. Come and work for the KM group !!!!

    I love working for the KM group, great company, come and join me… we need more media sales executives…. come and have some fun !!!!

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  6. Nellie Pledge, The pickle factory

    THE KM would have closed Medway News anyway, although the disappearence of EKG will leave a very big hole for newspaper readers in Sittingbourne and surrounding areas. Can’t that Russian bloke who picked up the Indie for a pound come to the rescue?

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  7. Hells Bells, Kent

    @ Gloomy – absolutely agree with you!

    Indeed…KM is a great fun place to work…unfortunate about the job losses this close to Christmas (all the best to those affected).

    Come join the fun!

    Nellie, there was never anything noted stated or otherwise relating to the outcome of titles if the KM were successful, your point is purely accusational and Sittingbourne is served well by having access to the Sittingbourne Extra, Medway Messenger and the Sheerness Times Guardian – plenty!!

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  8. ITK, London

    It’s the same result isn’t it. Anyone who can’t see that is blind. The Northcliffe papers were always going to close, the issue was would Northcliffe force the KM to buy them up first and make KM do the dirty work. Good result for the KM I’d say. Well played… Bad for the Northcliffe staff, but they were always going to get s*at on.

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  9. KentCant

    So, KRNM staff — and indeed papers — are pawns in the greater battle between Northcliffe management and the OFT. Delightful to have your meager bit of security and job held to ransom by incensed egos wanting to make a point after being thwarted by a QuANGO doing what it is meant to do; in this case question whether a deal would give one company an outright monopoly on media ownership across a county and the attendant consequences that would have for advertisers.

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  10. OLD COMP, EAST RIDING

    Northcliffe’s problems start around 1999 with major management changes. Good people were retired off and the salesmen took over. The rest is history.

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  11. Nellie Pledge, Picles-R-Us, an industrial estate somewhere near Larkfield

    Hells Bells writes that: “Sittingbourne is served well by having access to the Sittingbourne Extra, Medway Messenger and the Sheerness Times Guardian – plenty!! ”

    Yes, but like all KM papers they are BORING, humourless and lean distinctly to the right.

    And the KM DID confirm that if the deal to buy KRN went ahead they WOULD close some papers, espcially “free or predominantly free” papers. Medway News fits that discription.

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  12. BoneHead, LaLa Land

    All the problems for regional newspapers began when, for some strange reason in late 1990′s, ad sales persons started getting positions on the boards of directors. After that they splashed the cash on stupid hair-brained projects like digital online content which has never made a penny profit since inception, while investment on the hard copy cash cow was reduced.

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