精东传媒

May 7, 2019

After a dark decade for Australia’s regional newspapers, a hopeful light flickers

Optimism about the sale of regional newspapers must be tempered by ongoing concerns about the viability of the local news business model.

Over the past decade the profits of 160-odd regional and rural publications that make up the former Fairfax business division known as Australian Community Media (ACM) have .

In 2012 the division made a A$169 million profit. In 2018 it was A$67.5 million.

Nine Entertainment Co acquired the division with its $3 billion takeover of Fairfax Media last year. It has been keen to get rid of it .

There are grounds for some optimism about the long-anticipated . It may signal better fortunes for regional publishing. But any optimism must be tempered by ongoing concerns about the viability of the local news business model.

What鈥檚 in the deal?

ACM鈥檚 new owner is a 50:50 partnership between real estate advertising mogul Antony Catalano and Thorney Investment Group. They are paying Nine A$125 million for the 160-odd mastheads and 130 associated websites. The deal involves Nine getting $10 million of advertising space, and content and printing sharing arrangements for a period of time.

Thorney Investment Group has established itself over the past 25 yeas as one of the most profitable investors in Australian property and resources. Its foray into local news may appear somewhat peripheral to its general investment profile, despite an ongoing investment in Domain, Fairfax鈥檚 real estate brand, which was listed as a separate entity on the in 2017.

Catalano, on the other hand, has a long and colourful history with Fairfax鈥檚 real estate classifieds business. He is expected to chair the new company.

A one-time property editor at The Age, he was made redundant in 2008 and went on to found, with the backing of major real estate brokers, the free property magazine The Weekly Review.

The magazine took off, winning business away from The Age鈥檚 real estate pages. In 2011 Fairfax bought half of Catalano鈥檚 Metro Media Publishing business . It bought the other half in 2015 (for ). It then merged the business with Domain, putting Catalano at the helm.

He left his role with Domain in January last year, just two months on the Australian Stock Exchange. Reportedly his resignation came amid complaints of a in the Domain workplace.

Catalano鈥檚 successful bid for Domain is a particular coup. He of Fairfax at the 11th hour by proposing to buy 19.9% of Fairfax shares.

Bidding against him and Thorney were private equity giants Anchorage Capital Partners and Allegro Funds. Seven West鈥檚 regional TV affiliate, Prime Media Group, and News Corp were also rumoured to have been interested.

Changing priorities

A few months ago Crikey labelled ACM鈥檚 impending sale a 鈥溾�� regardless of who won the bid, describing closures and consolidation of some local papers as 鈥渁lmost certain鈥�.

Catalano, on the other hand, has talked up the potential of the larger daily regional mastheads. These include The Canberra Times, The Newcastle Herald, The Border Mail (based in Albury), The Illawarra Mercury (in 精东传媒), The Ballarat Courier, The Examiner (in Launceston), and the Bendigo Advertiser. Between them, these papers reach about half ACM鈥檚 total audience of people.

Catalano says he is looking to invest 鈥溾�� in these areas.

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Without offering much detail, there were ways to monetise ACM鈥檚 audience that didn鈥檛 happen under Fairfax, due to it having 鈥渂igger priorities in the face of very significant structural decline in the newspaper business鈥�.

鈥淯nder us, it鈥檚 our only priority,鈥� he said.

However, when pushed on whether there would be efficiencies, including redundancies and closures, he conceded there was likely to be some 鈥渃onsolidation鈥� .

Such consolidation might echo Fairfax鈥檚 2017 into a single North West Magazine.

The state of local journalism

It would be naive to be overly hopeful about a new dawn for regional newspapers given the broader context of the Australian news industry.

According to the journalists鈥� union, the Media Entertainment and Arts Alliance, at least have been lost since mass redundancies began about seven years ago. Cutbacks, the union says, have seen 鈥渞ural and regional audiences lose their "voice鈥� and their access to local information".

At the regional daily with the largest readership, The Newcastle Herald, the editorial staff has been cut from about 100 to less than 24.

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Workloads have escalated in consequence. Veteran journalist and union rep that journalists, perhaps once expected to produce one or two news stories a day, were now required to produce six, including headlines and photographs.

The New Beats study, a of redundancies in Australian journalism since 2012, calculates the total revenue of Australian newspapers from A$6.2 billion in 2007-08 to A$3 billion in 2016-17.

The New Beats researchers say the 鈥渕arket failure of regional journalism鈥� is that local advertising is simply insufficient to make a local newspaper financially viable. How Catalano is going to change that, given his stated , is an open question.

But given the unrelenting bad news faced by newspaper newsrooms over the past decade, it鈥檚 no surprise journalists are hoping for the best. The that sources within the Canberra Times regard the deal as the best of available options. The Media Entertainment and Arts Alliance has expressed cautious optimism, investment in the larger regional mastheads will come at the expense of smaller publications.

Only time will tell whether it is the hopes or the fears that are the most prophetic.

, Senior Lecturer in Journalism, Communication and Media,

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