Media Money: Big brands and deep pockets required

Ed Pilkington, writing in the Guardian, suggests that executives at the New York Times are very fond of what we might call the last man standing thesis.

The idea, of course, is that only those publishers with the biggest brands and the deepest pockets will weather the effects of recession and structural change, emerging on the other side.

Once there, the hope is that the survivors will be able to take advantage of new, as yet unspecified, opportunities.

In the US, the expression has gained currency against the backdrop of bankruptcies. Last month, Janet Robinson, chief executive of the The New York Times Company, said this to analysts:

‘As other newspapers cut back on international and national coverage, or cease operations, we believe there will be opportunities for The Times to fill that void.”

In the UK, there are plenty who would like to be counted among the last men standing.

The intention to be among them was visible, for example, in Sly Bailey’s Q&A session with analysts last week.

Asked whether she would like Trinity Mirror to consolidate, or be consolidated, Bailey sensibly answered: ‘It depends what’s right for our shareholders.”

But she struck a different tone when asked whether consolidation would provide ‘genuinely new benefits”.

Bailey referred to modernising the editorial process ‘on a wider scale”. She also suggested that Trinity Mirror is asking itself: ‘What can we do with a bigger portfolio to exponentially drive benefits?’The intention seems clear enough.

Of course, getting through to the final stages of this industry-sized knock-out competition will involve getting over a few hurdles.

Depending on where you look, the hurdles differ. In the case of Trinity Mirror, something may need to be done about pension liabilities that went up from £125m to £207m during 2008. Something else may yet need to be done about the Office Of Fair Trading.

For News Corporation, there’s the messy question of succession. If Murdoch Snr. can see the company through to recovery, so much the better. But if succession occurs before the landscape brightens, things could start to look very different.

Many of the non-Murdoch shareholders who own 75% of News Corporation are irritated by the founder’s continuing addiction to newsprint. A change of regime would be the perfect moment to raise their voices.

Meanwhile, the New York Times will need to be assured that the Sulzberger family can do without dividends for a decent stretch of time. (A prospect dismissed by New York media commentator Michael Wolff, who believes that Sulzbergers ‘can’t possibly stick with it”.)

The last man standing thesis is comforting for those who tell themselves that they’ve got the brand power, expertise and financial flexibility to make it through to the other side.

The only problem is that there are still way too many candidates for the job.

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