INL proposes merger of Wellington papers to boost advertising

By NZPA

Monday 24th June 2002

Front page mock-ups of The Dominion Post are already hanging up at Independent Newspapers' offices, but INL says the merged newspaper is not a fait accompli.

INL announced the proposed merger of its Wellington daily newspapers, the morning Dominion and evening paper the Evening Post, today in an effort to boost flagging advertising revenue.

The paper is likely to be launched in July. About 90 of the combined 490 staff will go, two-thirds of them in editorial positions.

INL chief executive Tom Mockridge told reporters today that while in the past many advertisers had chosen the option of advertising with both the Dominion and Evening Post for a reduced rate, that had changed in preference for The Dominion with its larger circulation.

"Even the discounts we put in don't keep the advertising there, and that really tells you the market's shifting," Mr Mockridge said.

Job advertising in the Wellington market had been particularly soft, by national standards, coinciding with a steady decline in The Post's circulation and a recent increase in the price of newsprint.

INL's subsidiary Wellington Newspapers (WNL) had tried to improve the figures at the Evening Post for about 15 years, Mr Mockridge said.

"Constantly, virtually a point of discussion every day has been `how's the Post doing?', and despite the spectacular efforts of the team -- the great editors, and last year it got newspaper of the year award -- you can't argue with the fact that circulation's declined."

However, he said the move was a merger, rather than the closure of The Post.

INL, 45.24 percent owned by Rupert Murdoch's News Ltd, said it believed two daily newspapers were no longer sustainable in the Wellington market.

"You shouldn't read into this the demise of afternoon newspapers. The problem here is where two newspapers are being produced in the same town," INL managing director (publishing) Rick Neville told reporters.

WNL's community newspapers are profitable.

The new paper would have more pages and retain the best parts of both, including columnists and cartoonists, Mr Neville said.

The Infotech Weekly section, the Dominion's magazine section, and the TV listings from the Evening Post, will be incorporated in the new paper.

Mr Neville said staff and unions would be consulted and the proposal, while most likely to proceed, was not a fait accompli.

"We've done a lot of homework and this is the best option we think going forward, but if there are other options people come up with that make commercial sense we'll obviously have a look at them," Mr Neville said.

Mr Mockridge said redundancy would be a significant one-off cost, but the merger was expected to have little impact on the 2003 year results, and be positive for 2004.

"Today the Post is not losing money ... but it is making substantially less money than it was previously and the trend line is unambiguous. Our belief is that if we don't take action now we will be confronting a much more serious and more negative situation,' he said.

"We'll definitely lose some of the advertising revenue we get today, but we'll be working absolutely 100 percent to retain as much as we can."

WNL's Petone printworks will have fewer, but larger, print runs for the daily paper, while still printing the community newspapers, Sunday Star-Times and other contract work.

Ironically, it was partly the input of former Evening Post editors Tim Pankhurst and Don Churchill that helped "crystalised this decision", Mr Mockridge said.

James Lindsay, joint domestic equities manager of Guardian Trust Funds Management, said the move was not a surprise.

"It's one we've asked directly ourselves anyway. They've been commenting that the Wellington market's been a bit soft so we're not surprised to see this eventuating.

"They were originally set up on a competitive basis to try and stop somebody else coming in (to Wellington), and that as a reason has become less and less influential," Mr Lindsay said.

From a high of 99,704 in 1974, the Post's circulation had declined to 54,000.

The Dominion's most recent audited circulation figure of 70,565 was an increase of 1994 on the previous audit, but down from a high of 77,268 in 1968.

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