News Corp Australia's much-vaunted commitment to printed newspapers may be coming to an end with new priorities to "markets in growth".
News has previously contrasted itself to Fairfax Media by stressing a commitment to print, although its newspapers are under the same pressure over display advertising and print circulation as other publishers challenged by competition from social media.
Industry-sponsored EMMA audience figures for February showed three News Corp tabloids, the (Brisbane) Courier-Mail, (Sydney) Daily Telegraph and (Melbourne) Herald Sun recorded falls of 15.7, 15.2 and 10.8 per cent, the worst in the period with the exception of Seven West's Perth-based West Australian.
With last week's disclosure that it was in talks to sell some community and regional mastheads comes the news that it could be passing on some of its investment in the former APN News & Media titles it bought only last year for just over $36 million - about two years' earnings.
The other potentially grim reality is that the parties being mentioned as prospective purchasers include two private equity firms with a reputation for seizing on and restructuring undervalued assets. One is Anchorage Capital, which bought the Dick Smith retail chain from Woolworths, restructuring it for a Stock Exchange listing in 2013 only to see it crash a couple of years later owing creditors $260 million. Another prospect - earlier named as interested in Fairfax Media's regionals - is US-based Apollo Global Management, the private equity firm founded by banker Leon Black after the collapse of Drexels, where he had headed mergers and acquisitions.
While restructuring may mean building assets into a separate viable business unit, private equity ownership has frequently been associated with taking a profit from assets such as property while leaving core activities to flounder.
In an email to staff quoted by Fairfax Media journalist Jennifer Duke, News Corp Australia executive chairman Michael Miller ˆ(pictured) - a former chief executive of APN - said the group was "obliged to understand the options" following numerous approaches since media ownership rules changed last year and an apparent recent resurgence of interest. "In particular we want to weigh up the long term impact to the News Corp portfolio, values proposed, and the impact to the communities we have invested in."
Conversations had begun with potentially interested parties and options were being reviewed. Miller said earlier this year that the group would be "reorienting towards markets in growth" - a category that is unlikely to include printed newspapers. Priorities for the "reorienting" included profitable growth, digital audience and revenue growth.
Following completion of the APN purchase, News has been restructuring its portfolio, integrating some new titles while grouping others into a new cluster.
Soon after News had completed on the $36.6 million for APN regional newspapers including the Sunshine Coast Daily, Gympie Times, Toowoomba's The Chronicle and the Daily Examiner in Grafton, global group chairman Rupert Murdoch told its annual meeting that there would be no more print acquisitions, with most of its existing mastheads "struggling".
Australasian rival Fairfax Media - which has prioritised digital growth - has listed titles it wants to sell or close, while efforts to merge with NZME in New Zealand have so far been blocked.