National World chairman David Montgomery has claimed the publisher remains the “best qualified” candidate to buy Telegraph Media Group.
Montgomery revealed in a statement accompanying the publisher’s full-year results on Thursday that National World remains in the running as the UAE-linked Redbird IMI acquisition led by former CNN boss Jeff Zucker looks to be in doubt.
The Government is introducing legislation to ban foreign states from owning UK newspapers and current affairs magazines.
Meanwhile, Culture Secretary Lucy Frazer has said she is “minded to” refer Redbird IMI’s takeover to an in-depth investigation after Ofcom found the deal may “operate against the public interest” as majority investor International Media Investments (IMI), owned by UAE vice president Sheikh Mansour, “may have the incentive to influence TMG in a way that could potentially act against the public interest in the UK by influencing the accurate presentation of news and free expression of opinion in the Daily Telegraph and the Sunday Telegraph newspapers”.
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Montgomery and National World wanted to take part in the original sale process before it was cut short by Redbird IMI securing a deal with former TMG owners the Barclay family.
Montgomery has now said he still considers there to be a chance his company will end up with the Telegraph titles, with other interested parties believed to include GB News investor Sir Paul Marshall, DMGT owner Lord Rothermere, and Rupert Murdoch’s News UK (for The Spectator only).
He said: “In the second half of 2023 National World competed in the aborted auction for The Telegraph. The conclusion of its ownership change is still in doubt but the opportunity was in line with both the founding principles of National World – that it would be a consolidator in the sector – and its ability to leverage both its infrastructure to extract significant synergies and its proven management expertise.
“Our view remains that National World remains the best qualified among the various candidates for such a deal both in terms of industry qualification and also editorial independence, as well as the absence of any competition issues.”
National World has already been on an acquisition spree, with seven purchases in 2023:
- Rotherham Advertiser
- B2B publisher Insider Media
- Digital football publisher Scoop Dragon
- Video-first and World of Women’s Sport publisher News Chain
- Newry Reporter newspaper in Northern Ireland
- Midland News Association
- Publishing platform supplier Press Computer Systems (PCS)
However National World is now looking at selling off tech provider PCS to content and commerce management provider Naviga UK1 Limited, which it said provided a “greater opportunity” for it to “remain both significant and influential within the publishing sector”.
These acquisitions helped National World grow revenue in 2023 by 5% to £88.4m, with digital up 13% to £18.4m – largely in line with the pre-close trading update issued in January. It is aiming to reach £100m in revenue in 2024.
Print advertising was down 1% and circulation revenue was down 3%.
Adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) was down 2% to £9.5m. Adjusted profit before tax was up 4% to £9.7m and operating profit was down 2% to £9.1m.
In the first quarter of 2024 EBITDA is “slightly higher than internal expectations with total revenue slightly lower”.
“There is still some continuing market volatility as audience and programmatic yields are impacted by algorithm changes by the global social media platforms,” the publisher said.
BBC local news expansion ‘predatory’
Montgomery also used the results to launch another broadside against the BBC, accusing it of “predatory behaviour”.
He said the corporation “uses taxpayer funds to compete online, threatening local independent journalism. It is remarkable that the BBC, financed by a compulsory tax, is permitted to enforce its monopoly in the news sector month after month.
“In January 2024, 3.1 billion page views for BBC News dwarfed the combined total of the UK’s 28 leading independent news sites, including Mail Online, The Sun and, of course, National World. In no other sector would such an unfair market be tolerated by regulators.”
National World received £1.8m in 2023, up from £1.5m the year before, from the BBC-funded local democracy reporter scheme and 58 Meta-funded community news reporters although the latter scheme is now being phased out.
Moving away from news to ‘wider content agenda’
Montgomery also revealed plans for National World to be “less dependent on news provision” as it transitions from having a “specific expertise in news journalism, restricted by geographical focus, to a wider content agenda distributed across all platforms”.
He said this will be part of a plan to “pivot the group towards growth for the first time in two decades”.
Montgomery added: “Instead of duplicating the market, the routine approach of conventional news providers, National World will specialise in original and expert content that is monetisable across multiple formats and channels, in consumer and marketing sales.
“Subscriptions and paid content will feature across many activities including the premium print titles, sport, culture and business coverage together with a focus on affiliates revenue.”
This year National World will launch a new “local social media network platform” called Your World where members of the public and organisations can post their content directly.
Montgomery said this will provide “a significant improvement in content and service for around 50 of our heritage brands. This comes with IP developed internally and with partners that may be viable as a marketable asset to service other media operators.“
Montgomery also revealed AI is being used at National World to “boost local video advertising sales, video news bulletins and automated print pages” with it currently producing around 200 pages per week. The aim is for AI to produce around half of all pages for the publisher’s weekly titles by the end of the year.
A subscriptions strategy at The Scotsman, Yorkshire Post and The Newsletter in Belfast has seen 6% annual subscription growth at the Scottish title, Montgomery said, adding that they are now set up “to increase our loyal customer base even further in 2024, despite the possible market changes to cookies”.
Montgomery also said video was a strong growth area, with a quarter of its journalists “fully trained”. Video audiences were up 12% in 2023 from 357 million views in 2022 to 398 million and video revenue is now £1.5m.
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