Prospective DMGT merger with TMG: Impact on the national news industry
DMGT is requesting regulatory clearance of its merger with Telegraph Media Group (TMG) from the Secretary of State for DCMS. If successful, TMG, a quality brand mainly sold on subscription, will join DMG Media. TMG already outsources print ad sales to Mail Metro Media and printing to Newsprinters (News UK/DMGT)
DMGT’s offer of £500 million for TMG is good news for the UK news industry. DMGT’s valuation of TMG at 8x EBITDA is well above the valuations produced by private equity (PE) funders. PE is a short-term form of financial engineering ill-suited to TMG in the middle of its print-to-digital transition and transformation
TMG will gain an owner in DMGT that espouses a long-term vision of investment in consumer media. Each news brand produces its own content to serve and retain their audiences. Lord Rothermere practices the principle of editorial independence of each brand to protect each one’s identity