Prime Minister David Cameron has told local newspaper publishers ‘not to give up’on newspaper mergers following the collapse of KM Group’s bid to buy seven newspapers from Northcliffe Media.
The deal was called off last week after the Office of Fair Trading referred the decision to the Competition Commission last week, with KM Group chairman Geraldine Allinson citing the ‘completely unreasonable’costs that would be involved in the review.
According to The Guardian, Cameron told a lunch hosted by the Newspaper Society (which is chaired by Allinson) that he ‘shares the frustration” of KM Group but ‘denied it represented a failure of the government’s supposed relaxation of merger rules to help struggling local publishers”.
The Guardian quoted an unnamed ‘top newspaper executive’who attended the lunch claiming his company spent £500,000 when it completed a successful merger a decade ago – but they estimated it would now cost around £750,000 to push through a similar deal.
The OFT referred the deal because it feared it would give KM Group a monopoly of local weekly newspapers across East Kent.
Cameron, however, urged publishers ‘not to give up”, adding:
I’m afraid though that through the OFT we have a competition authority in place to make very difficult decisions. Don’t give up on those arguments. You clearly face a challenging time which [will] involve some companies coming together. You have to make a case to the OFT [but] competition authorities have to be independent.