News Corp has reopened talks with rival Fairfax Media on a plan to share its print and distribution operations, according to a report in well-informed News mouthpiece The Australian newspaper.
"While the talks are understood to be at an early stage, well-placed sources believe there is a willingness from both sides to strike a deal, as print revenues come under pressure from digital competitors," said the report.
Any deal would be expected to encompass regional and community titles, as well as metropolitan newspapers, where facilities could be shared and truck route duplication minimised. Sources said there could be more savings on offer among regional and community newspapers, given there are more titles being distributed to remote areas. Regional newspaper revenues have come under particular pressure in recent years as the effects of digital disruption and falling free-to-air television ad rates take hold.
When contacted, a Fairfax spokesperson said there would be no comment on the report. In recent years, Fairfax Media has completed a multi million-dollar upgrade of its printing and logistics operations in NSW and Victoria.
Reports that the companies were interested in restarting talks about a shared printing deal first surfaced last year in The Australian - shortly after Michael Miller was named the new executive chairman at News Corp. Miller was previously CEO at APN News & Media and while there he signed a deal with current Fairfax chief Greg Hywood for the two companies to share printing facilities in New Zealand.
The new proposal faced some potential stumbling blocks, said the report.
"Sources said a printing deal between Fairfax and News would generate less synergies following Fairfax’s sale of its state-of-the-art printing facilities at Chullora in Sydney and Tullamarine in Victoria this year. As part of the move, Fairfax’s print deadlines were pulled forward and are now much earlier than at News, which is another potential impediment to a deal."
Fairfax Media last year posted a 62.9% drop in full-year profit but said its booming digital business had helped to offset a continuing decline in print.