The Proposed Acquisition of certain business assets of Midland Tribune Limited by Formpress Publishing Limited Phase One Examination Report

21 November 2019

Prepared by the Department of Communications, Climate Action and Environment www.dccae.gov.ie Table of Contents

Table of Contents ...... i

1. Background ...... 3

The Purchaser: ...... 3

The Target: ...... 4

Media Sector ...... 5

The Purchaser: ...... 6

The Target: ...... 8

2. Application of the Relevant Criteria & s. 28D (2) of the Competition Act 10

Significant Interests ...... 10

The Purchaser: ...... 11

The Target: ...... 12

Impact: ...... 13

Relevant Media Assets ...... 14

The Purchaser: ...... 14

The Target: ...... 16

Impact: ...... 16

Ownership and Control ...... 17

Relevant Media Assets: ...... 17

Regulatory Oversight: ...... 18

Proposed Changes: ...... 18

Impact: ...... 18

Market Share ...... 18

Brand & News Reach: ...... 26

The Views of the Parties ...... 27

Media Merger – Parties; Examination - i - Impact: ...... 27

Governance and Editorial Management ...... 28

Compliance and Ethics ...... 29

Editorial Ethos ...... 29

Impact ...... 30

Content – Diversity ...... 30

The Purchaser ...... 30

The Target ...... 30

Impact ...... 31

Financial ...... 31

Proposed Transaction Structure: ...... 31

The Purchaser: ...... 31

The Target: ...... 32

The Views of the Parties ...... 32

Impact: ...... 32

Impact on the Irish Language ...... 32

Impact: ...... 33

The scale and reach of RTÉ and TG4 ...... 33

Impact: ...... 33

The Views of the CCPC/European Commission ...... 34

The Overall Views of the Undertakings Involved ...... 35

3. Summary of the Application of the Relevant Criteria & s. 28D (2) of the Competition Act ...... 36

4. Conclusion...... 41

Media Merger – Parties; Examination - ii - 1. Background

1.1 The Proposed Transaction involves the acquisition of certain business assets of Midland Tribune Limited (the Target Group) by Formpress Publishing Limited (the Purchaser) (together the Parties) (the

Proposed Transaction)1.

1.2 The Parties are making a joint notification2

The Purchaser:

1.3 The Purchaser publishes regional newspapers and operates online news

offerings3.

1.4 In the State, the Purchaser is active in the Publishing and Internet Media sectors through the publication of newspapers and the provision of online news offerings.

1.5 It is noted that, in January 2019, the Purchaser notified the Department of the acquisition of certain business assets of River Media4. This transaction was cleared by the Minister on 1 March 2019 and has since been put into effect5.

1.6 In the acquisition the Purchaser acquired the following newspaper titles and online news offerings, in the State6:

(a) The Kildare Post

(b) The

(c) The Post

(d) The Post ()

(e) The Finn Valley Post

1 M_2019_3 Midland Tribune / Formpress Notification form p. 2 2 M_2019_3 Midland Tribune / Formpress Notification form p. 5 3 M_2019_3 Midland Tribune / Formpress Notification form p. 2 4 M_2019_1 River Media / Formpress Notification form 5 M_2019_1 River Media / Formpress merger determination 6 M_2019_1 River Media / Formpress Notification form

Media Merger – Parties; Examination - 3 -

(f) Donegal Now

(g) Kildare Now

1.7 Neither the nor the Finn Valley Post were listed on the notification form for the Formpress / Midland Tribune merger7. This was queried with the Parties who responded as follows8:

“The Finn Valley Post is an edition of the free title, the Letterkenny Post. When Formpress Publishing Limited (“Formpress”) acquired the titles, the Letterkenny Post was suffering substantial losses and so Formpress stopped printing the title on the basis that it would then need to relaunch alongside an improved website to ensure that the title would be commercially viable.

The Letterkenny Post team has been retained by Formpress and now trained on its systems and moved to Formpress’s Letterkenny office. To mdate, they have been busy helping all the other titles move onto Formpress’s systems and are now relaunching all the new websites including which was relaunched three weeks ago with an increased audience. The Donegal site is to relaunch in the next week or so. The Letterkenny Post team’s attention will then move to launching a revised Letterkenny Post title which Formpress plans to launch in the new year, though it had hoped to relaunch before Christmas.”

1.8 In the River Media acquisition the Purchaser also acquired the following newspaper titles and online news offering based in Northern Ireland9:

(a) Derry News (Monday edition)

(b) Derry News (Thursday edition)

(c) County Derry Post

(d) Derry Now

The Target:

7 M_2019_3 Midland Tribune / Formpress Notification form 8 Email response from John Darby 9 M_2019_1 River Media / Formpress Notification form

Media Merger – Parties; Examination - 4 -

1.9 The Target Group is a number of a newspaper titles and online news offerings owned by Midland Tribune Limited. Midland Tribune is a wholly

owned subsidiary of Alpha Publications Limited10.

1.10 In the State, the Target Group is active in the Publishing and Internet Media sectors through the publication of newspapers and the provision of online news offerings.

Media Sector

1.11 Media Mergers, as defined in s. 28A of the Competition Act 2002 (as amended) (the Competition Act), refers to those undertakings which “carry on a media business” in the State. A “media business” is defined in the Competition Act as follows:

‘media business’ means the business (whether all or part of an undertaking’s business) of—

(a) the publication of newspapers or periodicals consisting substantially of news and comment on current affairs, including the publication of such newspapers or periodicals on the internet,

(b) transmitting, re-transmitting or relaying a broadcasting service,

(c) providing any programme material consisting substantially of news and comment on current affairs to a broadcasting service, or

(d) making available on an electronic communications network any written, audiovisual or photographic material, consisting substantially of news and comment on current affairs, that is under the editorial control of the undertaking making available such material;

1.12 Furthermore, the current Guidelines on Media Mergers (the Guidelines) provides the following supplementary definition of a “media sector”:

‘media sector’ means one of the following (and ‘media sectors’ means one or more of the following collectively):

10 M_2019_3 Midland Tribune / Formpress Notification form p. 2

Media Merger – Parties; Examination - 5 -

(a) Publishing – publication of newspapers or periodicals consisting substantially of news and comment on current affairs and the production of content for same.

(b) Broadcasting – transmitting, re-transmitting or relaying a broadcast service including radio or television and the production of content for same.

(c) Internet Media – making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs.

1.13 Furthermore, the Guidelines also note a number of sectors, these being television, radio, print media, internet, [and] other media interests, on the basis of which cross-media interests can be considered.

1.14 The Guidelines provide a working method of grouping media business, as defined in the Competition Act, in order to facilitate the examination of notified media mergers. The guidance provided by the Guidelines in this area is not exhaustive and does not preclude the examination of sub- sectors of the media sectors identified or other relevant groupings of media businesses.

The Purchaser:

1.15 The Purchaser is active in the following media sectors:

(a) Publishing – publication of newspapers or periodicals consisting substantially of news and comment on current affairs and the production of content for same.

(b) Internet Media – making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs.

Media Merger – Parties; Examination - 6 -

1.16 The Purchaser is active in the Publishing sector through the publication of

the following titles11

(a) The

(b) The

(c) The

(d) The

(e) The

(f) The

(g) The

(h) The

(i) The Clonmel Nationalist

(j) The

(k) The Donegal People’s Press

(l) The Letterkenny People (freesheet)

(m) The South Tipp Today

(n) The Leader

(o) The Inish Times

(p) The Kildare Post

(q) The

(r) Kilkenny Reporter

1.17 The Purchaser is active in the Internet Media sector through the operation

of the following online news offerings12

11 M_2019_3 Midland Tribune / Formpress Notification form p. 2, 3 12 M_2019_3 Midland Tribune / Formpress Notification form p. 3

Media Merger – Parties; Examination - 7 -

(a) www.donegaldemocrat.ie

(b) www.leinsterleader.ie

(c) www.kilkennypeople.ie

(d) www.limerickleader.ie

(e) www.longfordleader.ie

(f) www.tipperarylive.ie

(g) www.leinsterexpress.ie

(h) www.leitrimobserver.ie

(i) www.nationalist.ie

(j) www.dundalkdemocrat.ie

(k) www.offalyexpress.ie

(l) www.letterkennypost.com

(m) www.finnvalleypost.com

(n) www.inishtimes.com

(o) www.donegalnow.com

(p) www.kildarenow.com

(q) www.carlowlive.ie

(r) www.waterfordlive.ie

The Target:

1.18 The Target Group is active in the following media sectors:

(a) Publishing – publication of newspapers or periodicals consisting substantially of news and comment on current affairs and the production of content for same.

Media Merger – Parties; Examination - 8 -

(b) Internet Media – making available on an electronic communications network any written, audio-visual or photographic material consisting substantially of news and comment on current affairs.

1.19 The Target Group is active in the Publishing sector through the

publication of the following newspapers13

(a) The Midland Tribune

(b) The Tullamore Tribune

1.20 The Target Group is active in the Internet Media sector through the

provision of the following online news offerings14

(a) www.midlandtribune.ie

(b) www.tullamoretribune.ie

13 M_2019_3 Midland Tribune / Formpress Notification form p. 2 14 M_2019_3 Midland Tribune / Formpress Notification form p. 2

Media Merger – Parties; Examination - 9 -

2. Application of the Relevant Criteria & s. 28D (2) of the Competition Act

Significant Interests

2.1 In accordance with Section 28L of the Competition Act 2002, the Guidelines provide a characterisation of what constitutes a significant interest in a media business – which it states means “[h]as sufficient voting, financial or ownership strength within the relevant media business or media businesses to influence directly or indirectly, to an appreciable extent, the direction or policy of the media business or media businesses with regard in particular to news, current affairs or cultural content. This includes sourcing, production, supply or delivery of such content”. This characterisation further includes indicative thresholds as to what constitutes a significant interest in entities that carry on media businesses in the State, including that:

(a) A holding or voting strength of between 10% and 19% (directly or indirectly) may constitute a significant interest.

(b) A holding or voting strength of more than 20% (directly or indirectly) will generally constitute a significant interest.

2.2 The definition of “plurality of the media” is provided in the Competition Act and includes both diversity of ownership and diversity of content, both of which are also defined in the Act, as reproduced below:

(a) Diversity of content – “means the extent to which the broad diversity of views (including diversity of views on news and current affairs) and diversity of cultural interests prevalent in Irish society is reflected through the activities of media businesses in the State including their editorial ethos, content and sources”.

Media Merger – Parties; Examination - 10 -

(b) Diversity of ownership – “means the spread of ownership and control of media businesses in the State linked to the market share of those media businesses as measured by listenership, readership, reach or other appropriate measures”.

The Purchaser:

2.3 The Purchaser is a wholly owned subsidiary of Limited. Iconic Newspapers Limited is a wholly owned subsidiary of Mediaforce

(Holdings) Limited, a company incorporated in England and Wales15.

Therefore, Mediaforce is the ultimate parent company of the Purchaser16. As the ultimate parent company of the Purchaser, Mediaforce can be said to hold a significant interest in the Purchaser.

2.4 Given that Iconic Newspapers Limited is a wholly owned subsidiary of Mediaforce (Holdings) Limited, for the purposes of this assessment any significant interest held by Iconic Newspapers Limited will not be considered separately to the significant interest held by Mediaforce (Holdings) Limited.

2.5 The board of directors of the Purchaser is as follows17:

(a) Malcolm Denmark

(b) Russell Whitehair

(c) Richard Elliot

2.6 Mediaforce is majority owned by Malcolm Denmark with a 72.75% interest in the company, followed by Mark Young with a 20.9% interest. Therefore, Malcolm Denmark and Mark Young can be considered to hold a significant interest in the Purchaser.

2.7 The board of directors of Mediaforce is as follows18:

(a) Malcolm Denmark

(b) Russell Whitehair

15 M_2019_3 Midland Tribune / Formpress Notification form p. 7 16 M_2019_3 Midland Tribune / Formpress Notification form p. 7 17 M_2019_3 Midland Tribune / Formpress Notification form p. 13 18 M_2019_3 Midland Tribune / Formpress Notification form p. 15

Media Merger – Parties; Examination - 11 -

(d) Thomas Barry

Impact:

2.13 As can be seen above, there are three entities which can be said to hold a significant interest in the Purchaser as follows:

(a) Mediaforce

(b) Malcolm Denmark

(c) Mark Young

2.14 Therefore should the Proposed Transaction proceed; Mediaforce, Malcolm Denmark and Mark Young will gain a significant interest in the Target Group.

2.15 As can be seen above there are five entities which can be said to hold a significant interest in the Target Group as follows:

(a) Tontine

(b) John Taylor

(c) Mary Francis Taylor

(d) William Robert Todd

(e) Edmund Russell Curran

2.16 However, as the pre-merger significant interests in the Target Group will be extinguished should the Transaction be put into effect, they will not be considered further in this examination.

2.17 The information above does not, in itself, give rise to concerns regarding issues of significant interest in regard to the Proposed Transaction. It should be noted that significant interest within a media business or a range of media businesses does not necessarily constitute a significant interest in a media sector or across media sectors. While the Guidelines provide a definition of what constitutes a significant interest in a media business, the relevant criteria in the Competition Act specifies the consideration of significant interests in and across media sectors.

Media Merger – Parties; Examination - 13 -

Therefore, there are two separate concepts of significant interests considered in media merger examinations and in this examination, those in media businesses and those in media sectors.

2.18 Therefore, whether Mediaforce, Malcolm Denmark or Mark Young acquiring a significant interest in the Target Group will be contrary to the public interest in protecting plurality of media in the State will be assessed in accordance with the relevant provisions of the 2002 Act and the Guidelines, in terms of the remainder of the indicators in this examination, particularly Relevant Media Assets, Ownership and Control, Market Share, Governance and Editorial Management and the Views of the CCPC:

Relevant Media Assets

2.19 Relevant media asset is defined by the Guidelines as “holdings which constitute a significant interest in an undertaking (other than an undertaking party to the merger) that carries on a media business in a media sector(s) in the State, and which are held either by an undertaking party to the merger or by a natural or legal person with a significant interest in an undertaking party to the merger”.

The Purchaser:

2.20 The Purchaser operates a number of relevant media assets in the State.

These are as follows23:

(a) Eighteen regional newspapers:

(i) The Donegal Democrat

(ii) The Leinster Leader

(iii) The Kilkenny People

(iv) The Limerick Leader

(v) The Longford Leader

(vi) The Tipperary Star

23 M_2019_3 Midland Tribune / Formpress Notification form p. 2,3

Media Merger – Parties; Examination - 14 -

(vii) The Leinster Express

(viii) The Leitrim Observer

(ix) The Clonmel Nationalist

(x) The Dundalk Democrat

(xi) The Donegal People’s Press

(xii) The Letterkenny People

(xiii) The South Tipp Today

(xiv) The Leader

(xv) The Inish Times

(xvi) The Kildare Post

(xvii) The Donegal Post

(xviii) Kilkenny Reporter

(b) Eighteen online news offerings:

(i) www.donegaldemocrat.ie

(ii) www.leinsterleader.ie

(iii) www.kilkennypeople.ie

(iv) www.limerickleader.ie

(v) www.longfordleader.ie

(vi) www.tipperarylive.ie

(vii) www.leinsterexpress.ie

(viii) www.leitrimobserver.ie

(ix) www.nationalist.ie

(x) www.dundalkdemocrat.ie

Media Merger – Parties; Examination - 15 -

(xi) www.offalyexpress.ie

(xii) www.letterkennypost.com

(xiii) www.finnvalleypost.com

(xiv) www.inishtimes.com

(xv) www.donegalnow.com

(xvi) www.kildarenow.com

(xvii) www.carlowlive.ie

(xviii) www.waterfordlive.ie

The Target:

2.21 The Target Group operates a number of relevant media assets in the State.

These are as follows24:

(a) Two regional newspapers:

(i) The Midland Tribune

(ii) The Tullamore Tribune

(b) Two online news offerings:

(i) www.midlandtribune.ie

(ii) www.tullamoretribune.ie

2.22 The ultimate parent company of the Target Group, Tontine, holds media assets in Northern Ireland, but none in the State other than those

mentioned above25.

Impact:

2.23 The information above does not give rise to concerns in the issue of relevant media assets in regard to the Proposed Transaction. The following

24 M_2019_3 Midland Tribune / Formpress Notification form p. 2 25 M_2019_3 Midland Tribune / Formpress Notification form p. 9

Media Merger – Parties; Examination - 16 -

entities relevant to this examination have significant interests in media businesses that operate a number of relevant media assets:

(a) The relevant media assets of the Purchaser identified above:

(i) Mediaforce,

(ii) Malcolm Denmark

(iii) Mark Young

(b) The relevant media assets of the Target Group identified above:

(i) Tontine

(ii) John Taylor

(iii) Mary Francis Taylor

(iv) William Robert Todd

(v) Edmund Russell Curran

2.24 The ownership of a number of the relevant media assets identified above by the significant interest holders identified above must be assessed in terms of the market share that these relevant assets possess in their respective sectors and on a cross-sector basis.

Ownership and Control

Relevant Media Assets:

2.25 Mediaforce, Malcolm Demark and Mark Young have interests in the Purchaser that constitutes a significant interest and thus have significant interests in the relevant media assets, identified above (par. 2.20), of the Purchaser.

2.26 The Parties confirm that Mediaforce does not hold any other interests in

any media business other than those as outlined above26.

26 M_2019_3 Midland Tribune / Formpress Notification form p. 7

Media Merger – Parties; Examination - 17 -

2.27 Tontine, John Taylor, Mary Francis Taylor, William Robert Todd, and Edmund Russell Curran have interests in the Target Group that constitutes a significant interest and thus have significant interests in the relevant medias assets, identified above (par. 2.21), of the Target Group.

Regulatory Oversight:

2.28 The Parties confirm that all of the Purchaser’s paid titles comply with and are signed up to the Code of Practice as authorised by the Press Council of

Ireland and the Office of the Press Ombudsman27.

2.29 The Parties also confirm that neither the Midland Tribune nor the Tullamore Tribune are members of the Press Council of Ireland but it is proposed that they will become members if and when acquired by the

Purchaser28.

Proposed Changes:

2.30 As previously stated, the Parties proposed that membership of the Press Council of Ireland will be sought for Midland Tribune and Tullamore Tribune post-merger.

Impact:

2.31 The information above does not in itself give rise to concerns regarding issues of ownership and control in regard to the Proposed Transaction. The ownership of a number of the relevant media assets identified above, by the significant interest holders identified above, must be assessed in terms of the market share that these relevant assets possess in their respective sectors and across sectors.

Market Share

2.32 As previously explained (par. 1.4, 1.10), the above identified relevant media assets of the Purchaser and of the Target are active in the Publishing and Internet Media sectors, in the State, through the publication of newspaper titles and online news offerings.

27 Pre-notification engagement: response to information request 28 Pre-notification engagement: response to information request

Media Merger – Parties; Examination - 18 -

The Views of the Parties

2.50 The Parties state that “while the market focus is on the provincial newspaper market, it is important to point out that for both consumers of news and advertisers within this market, there is an increasing plethora of digital news sites that report on local news as well as each area having at least one local radio station. All of these brands are in competition with provincial newspapers for both audience and advertising revenues.”43

Impact:

2.51 Should the Proposed Transaction proceed, Mediaforce, Malcolm Denmark and Mark Young, who have a significant interest in the Purchaser, will hold a significant interest in the media assets of the Target Group.

2.52 Should the Proposed Transaction proceed, Mediaforce, Malcolm Denmark and Mark Young will hold a significant interest in 20 out of 95 regional newspaper titles in the State.

2.53 Should the Proposed Transaction proceed, Mediaforce, Malcolm Denmark and Mark Young will hold a significant interest in 20 out of 35 regional newspaper titles serving 10 counties. The circulation of the 20 newspapers titles as a percentage of the population, aged 15+, of those 10 counties equates to

2.54 Should the Proposed Transactions proceed, the Purchaser will gain a position in the regional newspaper market in Offaly and will concentrate its position in the regional newspaper market in Tipperary.

2.55 The information above does not raise concerns regarding market share in relation to the Proposed Transaction for the following reasons:

(a) The Purchaser’s market share of the regional newspaper market in the State will be concentrated but there are other regional newspapers competing in the same market.

(b) As seen above (par. 2.48), 14% of respondents to Reuters Report 2018 said a regional or local newspaper was a source of news and

43 M_2019_3 Midland Tribune / Formpress Notification form p. 3

Media Merger – Parties; Examination - 27 -

3% of respondents said a regional or local newspaper was a main source of news.

(c) The significant interest in the regional newspaper publishing sector, held by Mediaforce, Malcolm Denmark and Mark Young, will be concentrated but not to the extent that would raise concerns regarding market share.

Governance and Editorial Management

2.56 The board of directors of the Purchaser is as follows44:

(a) Malcolm Denmark

(b) Richard Elliot

2.57 The board of directors of Mediaforce is as follows45:

(a) Malcolm Denmark

(b) Russell Whitehair

(c) Richard Elliot

(d) Mark Young

2.58 The board of directors of the Target is as follows46:

(a) John Taylor

(b) Edmund Russell Curran

2.59 The board of directors of Alpha Publications Limited is as follows47:

(a) John Taylor

(b) Edmund Russell Curran

(c) William Robert Todd

44 M_2019_3 Midland Tribune / Formpress Notification form p. 14/15 45 M_2019_3 Midland Tribune / Formpress Notification form p. 13 46 M_2019_3 Midland Tribune / Formpress Notification form p. 6 47 M_2019_3 Midland Tribune / Formpress Notification form p. 6,7

Media Merger – Parties; Examination - 28 -

(d) Mary Francis Taylor

(e) Jonathan David Taylor

2.60 The board of directors of Tontine is as follows48:

(a) John Taylor

(b) Edmund Russell Curran

(c) Jean Matilda Long

(d) Thomas Barry

2.61 The Parties state that “post-acquisition, the oversight exercised by the board of directors of Midland Tribune will mirror that in Iconic. Specifically, each of the title’s editors are supervised by the group managing editor, who is responsible for editorial policy. The board of directors do not have any control of editorial policy, and this will not

change post-acquisition.”49

Compliance and Ethics

2.62 As previously stated (par. 2.28), the Parties confirm that all of the Purchaser’s paid titles comply with and are signed up to the Code of Practice as authorised by the Press Council of Ireland and the Office of the

Press Ombudsman50.

2.63 The Parties also confirm that neither of the Target Group titles are members of the Press Council of Ireland but it is proposed that they will

become members if and when acquired by the Purchaser51.

Editorial Ethos

2.64 The Parties state that:

“The editorial structure of Iconic’s provincial newspaper titles is comprised of approximately five journalists and editor of each title and the editor in chief. The editorial teams within each title create, manage

48 M_2019_3 Midland Tribune / Formpress Notification form p. 7 49 M_2019_3 Midland Tribune / Formpress Notification form p. 14 50 Pre-notification engagement: response to information request 51 Pre-notification engagement: response to information request

Media Merger – Parties; Examination - 29 -

and develop content. Corporate management and shareholders do not have any active involvement or influence in the day to day output of each of the newspaper title’s output.”

And

“Neither Midland Tribune nor Iconic’s provincial newspaper titles endorse any political parties and both carry a wide range of political

views and opinions.”52

Impact

2.65 The information above does not give rise to concerns regarding governance or editorial management in relation to the Proposed Transaction due to the titles’ membership of the relevant regulatory bodies.

Content – Diversity

The Purchaser

2.66 The Purchaser’s titles are regional newspapers focusing on local news with an average of 30% commercial advertising. Sports coverage is predominantly amateur sport, and entertainment features are specific to the local area. The Purchaser’s titles publish a “contact us” panel in their newspapers, have a contact us section on their websites, and use social

media to communicate with their audience53.

The Target

2.67 In terms of content, the Target’s titles are similar to the Purchaser’s titles. They are regional newspapers focusing on local news with an average of 30% commercial advertising. Sports coverage is predominantly amateur sport, and entertainment features are specific to the local area. They also

use social media to communicate with their audience 54.

Alternative Content

52 M_2019_3 Midland Tribune / Formpress Notification form p. 17 53 M_2019_3 Midland Tribune / Formpress Notification form p. 18 54 M_2019_3 Midland Tribune / Formpress Notification form p. 18

Media Merger – Parties; Examination - 30 -

2.68 The Parties refer to alternative content in the form of other local

publishers, local radio, and digital content providers55.

The Views of the Parties

2.69 The Parties state that “Content is also provided in these areas by other local publishers, local radio and digital content providers. There are digital content aggregators, e.g. mytown.ie that also offer an outlet for community news and classified advertising. In addition, there is user generated content in abundance on the social media platforms that is specific to

locations where advertisers can also buy advertising space56.

Impact

2.70 The information above does not appear to raise concerns regarding diversity of content, particularly news and current affairs, in relation to the Proposed Transaction. Therefore, it is unlikely that the Proposed Transaction will in this regard have an adverse impact on the plurality of the media in the State.

Financial

Proposed Transaction Structure:

2.71 The Parties have provided the Business Transfer Agreement which set out the terms of the transaction and the purchase price which is the sum of

57.

2.72 The Parties state that

“The funding for the Purchase of the business assets and goodwill of Midland Tribune is being provided by Iconic in cash from cash reserves, being consideration in the amount of .”

And

“There will be no debt involved following the proposed merger.” 58

The Purchaser:

55 M_2019_3 Midland Tribune / Formpress Notification form p. 20 56 M_2019_3 Midland Tribune / Formpress Notification form p. 20 57 Appendix 11 to the Notification Form – Business Transfer Agreement 58 M_2019_3 Midland Tribune / Formpress Notification form p. 21

Media Merger – Parties; Examination - 31 -

2.73 In the financial year ended 31 March 2018 the Purchaser had a turnover of €12,219,898, a profit before tax of €876,912, cash and cash equivalents of

€1,828,173 and a total equity of €11,548,38259.

2.74 In the financial year ended 31 March 2018, the Purchaser’s parent company, Mediaforce, had a turnover of €147m, a profit before tax of €5m,

cash and cash equivalents of €4m and a total equity of €4m60.

The Target:

2.75 In the financial year ended 31 March 2018 Midland Tribune had a negative

equity of (€430,714) and a shareholder deficit of (€430,680)61.

The Views of the Parties

2.76 The Parties state that:

“Iconic will provide the extra resource and funding required to sustain the Midland Tribune titles.”

And

“This proposed acquisition will protect jobs and continue to ensure the successful delivery of quality local journalism to the communities that

each title and website serves.”62

Impact:

2.77 The information above does not appear to raise concerns regarding finance in relation to the Proposed Transaction due to the strong financial standing of the Purchaser as opposed to Midland Tribune. It appears likely that the Purchaser has greater financial capability to be able to maintain the Target Group titles than at present.

Impact on the Irish Language

2.78 In the Target Group titles the only Irish language content is occasional Irish government advertisements. There are some limited items published

in the Irish language in the Purchaser’s titles63.

59 Formpress Financial Statements for the year ended 31 March 2018 60 Mediaforce Financial Statements for the year ended 31 March 2018 61 Midland Tribune Abridged Financial Statement for the period ended 31 March 2018 62 M_2019_3 Midland Tribune / Formpress Notification form p. 23/24

Media Merger – Parties; Examination - 32 -

The Views of the Parties

2.79 There Parties confirm that there is no expected change to the Irish

language content provided by any of the relevant titles64.

Impact:

2.80 The information above does not appear to raise concerns regarding the impact on the Irish language in relation to the Proposed Transaction because, as seen above (par. 2.79), the Parties have confirmed that there is no expected change to the level of Irish language content provided.

The scale and reach of RTÉ and TG4

2.81 As neither RTÉ nor TG4 are active in the publishing sector in the State, the Parties are not in competition with the Public service broadcasters in this regard.

2.82 RTÉ and TG4 are active in the Internet media sector through the operation of their online news offerings, www.tg4.ie and www.rte.ie.

2.83 According to RTÉ’s 2018 Annual Report “RTÉ.ie, Ireland’s number one media site, saw continued growth throughout 2018, up from 54.1 million monthly average page views to 61.8 million. Unique monthly average users also rose from 6 million to 6.3 million.”

2.84 According to TG4’s 2018 Annual Report “Unique visitors to the website (TG4.ie) increased 1.3% to over 2m. The number of page impressions increased almost 30% to 24.57m in 2018.”

Impact:

2.85 The information above does not appear to raise concerns regarding any detrimental impact to the pluralistic nature of RTÉ or TG4 in relation to the Proposed Transaction. Therefore, it is unlikely that the Proposed Transaction will, in this regard, have an adverse impact on the plurality of the media in the State in terms of the scale and reach of RTÉ and TG4 and therefore the adequacy of the public service broadcasters in not affected by the Proposed Transaction.

63 M_2019_3 Midland Tribune / Formpress Notification form p. 19 64 M_2019_3 Midland Tribune / Formpress Notification form p. 19

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The Views of the CCPC/European Commission

2.86 The Proposed Transaction was notified to the CCPC on 9 May 201965.

2.87 Mediaforce, the Purchaser’s ultimate parent company, wholly owns Mediaforce Ireland Ltd. Mediaforce Ireland acts primarily as a national advertising sales agency/conduit for local/regional newspapers and

regional digital newspapers in the State66.

2.88 The CCPC had concerns that the increase in local/regional newspaper and digital newspaper titles that the Purchaser will own as a result of the Proposed Transaction may impact on competition in markets for goods or services in the State due to the Purchaser and Mediaforce Ireland

belonging to the same group of companies67.

2.89 Pursuant to section 20(3) of the Act, the Purchaser and Mediaforce Ireland submitted proposals to the CCPC relating to the Proposed Transaction for the purpose of ameliorating any possible effect of the Proposed Transaction on competition in markets for goods or services in the State, with a view to the Proposals being binding on Formpress and Mediaforce.

2.90 The Proposals are submitted to68:

(a) ensure that, following completion of the Proposed Transaction, Mediaforce Ireland and the Purchaser are managed separately;

(b) prevent any direct or indirect exchange of competitively sensitive information between Mediaforce Ireland and the Purchaser concerning non-Formpress Titles and advertising with local/regional newspapers; and

(c) ensure that Mediaforce Ireland acts in a non-discriminatory manner in the placing of advertising business with all local/regional newspapers and regional digital newspapers irrespective of whether they are Formpress Titles or non- Formpress Titles.

65 CCPC Determination 66 CCPC Determination 67 CCPC Determination 68 CCPC Determination

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2.91 On 9 October 2019 the CCPC determined that69:

“The Commission has taken the proposals into account and in light of the said proposals (which form part of the basis of its determination) has determined, in accordance with section 21(2)(a) of the Act, that the result of the proposed acquisition whereby Mediaforce (Holdings) Limited through Formpress Publishing Limited would acquire certain business assets of Midland Tribune Limited from Alpha Publications Limited will not be to substantially lessen competition in any market for goods or services in the State, and, accordingly, that the acquisition may be put into effect subject to the provisions of section 28C(1) 1 of the Competition Act 2002, as amended.”

The Views of the Parties

2.92 The Parties have provided copies of the following70:

(a) notification to the CCPC,

(b) Requests for information letters issued by the CCPC and the responses to same, and

(c) the CCPC’s determination.

The Overall Views of the Undertakings Involved

2.93 The Parties state the following71:

“The proposed transaction will contribute to, protect and not adversely affect the plurality of media in the State as the relevant market will remain highly competitive with a large number of market participants competing vigorously with each other. The provincial newspaper titles of Midland Tribune and Iconic will continue to trade as separate entities and thus separate market actors, further protecting the plurality of the media in the State. Without the resource to be provided by Iconic, these titles may be unsustainable for the future.”

69 CCPC Determination 70 Appendices 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 to the notification form 71 M_2019_3 Midland Tribune / Formpress Notification form p. 22

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3. Summary of the Application of the Relevant Criteria & s. 28D (2) of the Competition Act

3.1 This examination, in accordance with s. 28D(2) of Part 3A of the Competition Act, was conducted with regard to the following:

(a) The “relevant criteria” as set out in s. 28A of the Competition Act.

(b) The Guidelines on Media Mergers issued in accordance with s. 28L of the Competition Act.

(c) The Notification Form and other information provided by the Parties to the proposed media merger.

(d) The Views of the Competition & Consumer Protection Commission in relation to the proposed media merger.

(e) Relevant research conducted by the BAI under s. 28M of the Competition Act.

3.2 Furthermore, this examination considered the following indicators in the application of the “relevant criteria” and with regard to s. 28D(2):

(a) Significant Interest – Mediaforce, Malcolm Denmark and Mark Young are deemed to have a significant interest in the Purchaser and will gain a significant interest in the Target Group should the Proposed Transaction be implemented.

Whether these interests are of concern, post-transaction, is assessed in terms of the remainder of the indicators in this examination, particularly Relevant Media Assets, Ownership and Control, Market Share, Governance and Editorial Management and the Views of the CCPC.

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(b) Relevant Media Assets – The relevant media assets of the Purchaser and the Target to be considered in this examination are identified.

(c) Ownership and Control – The ownership and control arrangements of the various relevant media assets identified are examined in this section, as are the regulatory regimes in place regarding the relevant media assets and any proposed changes on the part of the Purchaser to the operation of the relevant media assets of the Target Group post-transaction.

The significant interests held by Mediaforce, Malcolm Denmark and Mark Young in the relevant media assets of the Purchaser, and the significant interest they will gain in the relevant media assets of the Target Group are assessed in the Market Share section of this examination in terms of the market share that these assets possess in the publishing and internet media sectors.

(d) Market Share – The market shares of the various relevant media assets identified earlier in this examination are analysed in terms of reach, distribution, etc.

The views of the Parties in relation to this section are also examined.

It is determined that:

Should the Proposed Transaction proceed, Mediaforce, Malcolm Denmark and Mark Young, who have a significant interest in the Purchaser, will hold a significant interest in the media assets of the Target Group.

Should the Proposed Transaction proceed, Mediaforce, Malcolm Denmark and Mark Young will hold a significant interest in 20 out of 95 regional newspaper titles in the State.

Should the Proposed Transaction proceed, Mediaforce, Malcolm Denmark and Mark Young will hold a significant interest in 20 out of 35 regional newspaper titles serving 10 counties.

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Should the Proposed Transaction proceed, the Purchaser will concentrate its position in the regional newspaper market in Tipperary. The Purchaser’s circulation in Tipperary would increase from to when taken as a percentage of population.

Should the Proposed Transactions proceed, the Purchaser will gain a position in the regional newspaper market in Offaly. As a result of the Purchaser entering the market in Offaly and so introducing the population of Offaly into the calculation, and taking into account the concentration in the Tipperary market, the Purchaser’s overall circulation, as a percentage of the population of the Counties it serves, would decrease from to .

The information above does not raise concerns regarding market share in relation to the Proposed Transaction for the following reasons:

(a) The Purchaser’s market share of the regional newspaper market in the State will be concentrated but there are other regional newspapers competing in the same market.

(b) As seen above (par. 2.48), 14% of respondents to Reuters Report 2018 said a regional or local newspaper was a source of news and 3% of respondents said a regional or local newspaper was a main source of news.

(c) The significant interest in the regional newspaper publishing sector, held by Mediaforce, Malcolm Denmark and Mark Young, will be concentrated but not to the extent that would raise concerns regarding market share.

Moreover, it is determined that, while this is unlikely to give rise to a concern, the Market Share must be examined in the context of a number of the remaining sections of this examination, including Governance and Editorial Management.

(e) Governance & Editorial Management – The current governance and editorial regimes of the Purchaser and the Target are analysed.

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The information does not give rise to concerns regarding governance or editorial management in relation to the Proposed Transaction due to the titles’ membership of the relevant regulatory bodies.

(f) Content – A high level breakdown of content type for the Parties is provided. Alternative news content is examined in the News and Brand Reach section.

(g) Financial – The Financial standings of the Parties are examined.

The information does not appear to raise concerns regarding financial management in relation to the proposed transaction and it is deemed unlikely that the Proposed Transaction will, in this regard, have an adverse impact on the plurality of media in the State.

(h) Impact on the Irish Language – The level of Irish language content provided by the Parties is examined.

This information does not appear to raise concerns regarding the impact on the Irish language in relation to the Proposed Transaction as the Parties confirm that there will be no change in the level of Irish language content provided. Therefore, it is deemed unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of media in the State.

(i) The Scale and Reach of RTÉ and TG4 – The potential impact of this acquisition should it proceed on the Public Service Broadcasters, RTÉ and TG4, is analysed.

The information above does not appear raise concerns regarding the impact on adequacy of the public service broadcasters in ensuring the plurality of the media in the State. Therefore, it is unlikely that the proposed transaction will, in this regard, have an adverse impact on the plurality of the media in the State.

(j) Views of the CCPC/European Commission – The views of the CCPC regarding the competition element of the Proposed Transaction are noted.

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(k) Views of the Parties – The views of the Parties are noted and considered throughout this assessment, generally, and specifically in the relevant sections, and where appropriate, responses are provided.

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4. Conclusion

4.1 In light of the notification, and other materials supplied by the Parties to the proposed acquisition as considered with regard to the matters the Minister shall have regard to under s. 28D of the Competition Act, including the ‘relevant criteria’ as set out in Part 3A of the Competition Act, the Guidelines published by the Minister under s. 28L of the same Act, as considered by the Department in this assessment, it is recommended that the Proposed Transaction should be permitted to be put into effect.

4.2 The following are the major factors informing the recommendation:

(a) Given the small size of the increase in the Purchaser’s market share of the newspaper publication sector and the regional newspaper publication sub-sector post-transaction, in the State, it is considered unlikely that this increase will have an adverse impact on the plurality of the media in the State, either regarding diversity of ownership or diversity of content.

(b) Given that while the market share increase referred to in (a) will occur as a result of the Proposed Transaction, taking the regional newspaper market in the counties in which the Purchaser operates as a further sub-sector, the Proposed Transaction will decrease the Purchaser’s overall circulation, as a percentage of the population of the Counties it serves, from to .

(c) In light of the difficult financial position of the Target, the Proposed Transaction being put into effect may ultimately lead to the preservation of diversity of content.

(d) The binding commitments entered into by the undertakings, with the CCPC, ameliorate any possible effect of the Proposed Transaction on competition in markets for goods or services in the State as a result of the Purchaser belonging to the same group of companies as Mediaforce Ireland.

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4.3 In light of the above, it is considered that the proposed transaction is not contrary to the public interest in protecting media plurality in the State and may be permitted to be put into effect.

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