News of the World: Trinity Mirror Opportunity

Alex DeGroote, media analyst at Panmure Gordon, said today, “as predicted, News International has closed the News of the World. In our view, the rationale for this is twofold:

1) With the collapse in advertising, the product itself was rapidly becoming commercially unviable
2) It is a cynical attempt to improve the prospects of regulatory approval for the News Corp deal with BSkyB.”

DeGroote believes there will be positive implications for Trinity Mirror: “The opportunity for TNI here is much improved market share of circulation and advertising. In terms of demographic, the Mirror titles are arguably closest to the NoW, and there is conceivably 2.6 million circulation up for grabs. Note, however, that after a period of grace, we would expect News International to re-launch a Sunday title, akin to the Sun”.

However, he also says there is an important risk factor to bear in mind, as “all of the above assumes that there is no tabloid-wide broadening out of the phone hacking scandal, and even more advertiser rejection of tarnished print franchises.”