NY Post: Five large newspaper chains in talks to merge national ad sales divisions

Gannett, Advance, Hearst, McClatchy and Tribune have been holding talks about merging and spinning off their national ad sales into a new, separate company, according to the Post

Nation's largest paper chains talk merger in ad revenue push

 

Evidently this would lead to about 250 people being axed. Which at a micro level sucks for those involved but at a macro level is pretty marginal.

What would would be far more interesting is if large chains start to merge. I think McClatchey (and Lee) are so far underwater no one will merge with them. Their debt loads exceed current market value.

But just as an example let's assume all five merged. Adjacent properties could be closed. A really good national sports website could be created at marginal additional cost (between these five chains they must staff virtually every professional sports team in the United States). The Washington bureaus could consolidate and they could create a really good national section they could link to from the local websites, again without hiring a lot of staff.

I think chains merging will be the next big thing. In fact I think the only reason Tribune and Gannett are not talking are the "social issues" which is another way of saying that neither CEO wants to lose his job in a marger.

 

If those five companies merged, would that increase ad revenue from national ad sales? There would be fewer buyers, meaning they wouldn't undercut each other trying to get sales.

 

I don't think it would make a lot of difference. Currently a national buyer might need to hit the Midwest. So he buys Cleveland (Advanced), Detroit (Gannett), Chicago (Tribune) and Kansas City (McClatchy). I don't think the papers in these markets have any significant overlap in audience reach or compete against each other. National advertising is also fleeing the medium anyway.