Publishers Dare Odds to Start 2 UK Dailies

International Herald Tribune – August 1, 2005

Eric Pfanner

LONDON Starting a newspaper at a time when readers and advertisers are defecting to the Internet might seem like a gamble. When the market in question, Britain, is already served by about a dozen national dailies in a variety of shapes, sizes and price ranges, you might even have to give a new paper away to get people to read it.

Yet British publishers floated plans in July for at least two new daily papers, and one is in fact intended to serve the surging number of gamblers in Britain, while the other, a business publication, is to be distributed free of charge. Assuming these plans get the go-ahead, analysts say both publications face long odds.

"Over the medium term, a lot more papers get announced than get launched," said Stuart Newman, a partner in the media practice at PricewaterhouseCoopers, the consulting firm. "In a competitive market, it's unclear what the competitive advantage of these papers would be."

Jeremy Deedes, former chief executive of the Telegraph Group, which publishes the Daily and Sunday Telegraph newspapers, seems undaunted by such talk. He recently announced plans to start a paper called The Sportsman, aiming to capitalize on the boom in gambling, particularly online betting on sports events, in Britain, which liberalized its gambling rules this year.

Deedes hopes that The Sportsman will appear by next spring, with an initial circulation of 40,000, and is trying to raise £12 million, or $21 million, for the project, to go with initial seed funding provided by Ben and Zac Goldsmith, sons of James Goldsmith, the late financier.

"What we're trying to do is reflect this huge revolution that has taken place in gambling in the U.K.," Deedes said by telephone. "Sport is the new religion, but there isn't a daily paper that reflects that."

But why start a print-on-paper newspaper, at a time when young consumers are spending more time online? Deedes said there would be a companion Web site for The Sportsman.

"The sort of audience we are looking at, their nature is, they switch between the two," he said. "The Internet has caused a large part of the gambling revolution, but I think there still is an audience for the printed publication."

The other potential new publication, The London Business Daily, would enter a market that is already well represented, with The Financial Times and the business sections of British newspapers competing for scoops.

But the backers of the title apparently plan to distribute it free of charge, earning revenue only from advertising. The project is headed by Lawson Muncaster, a former executive of the Swedish publisher Metro International, which has pioneered free newspapers in dozens of cities around the world.

"London's business community has never been fully catered for," Muncaster, who could not be reached to comment for this article, told the Agence France-Presse news service. "By launching London Business Daily at the end of this year, we aim to fill this gap in the market."

While Muncaster said Scottish banks were financing the project, it remains unclear how the Business Daily would be distributed, and at what time of day it would appear.

Several publishers, including Metro International and Richard Desmond, the proprietor of the Express and Star tabloids, are already said to be interested in bidding for a contract to distribute a free afternoon paper in the London Underground.

The Daily Mail and General Trust, owner of The Daily Mail and The Evening Standard, publishes a morning freebie, Metro, which is not affiliated with Metro International.

Meanwhile, analysts question whether business readers, many of whom are confronted with news all day long from the Internet and from Reuters or Bloomberg trading terminals, are suffering from a shortage of information.

While the price of a newspaper might seem like pocket change to business readers, paid circulation at The Financial Times has been sliding, and hovers at around 100,000 in Britain. Facing criticism from some readers that it was concentrating too much on international news, the FT recently added coverage of small British companies and other content aimed at hard-core business readers in the City. The FT did not return calls to comment.

The Sportsman, by contrast, might seem to be entering a promising market. The gambling business is booming, with online operators like PartyGaming reaping billions of dollars from initial public offerings of stock. Betting shops are fixtures on British "high streets," offering wagers on everything from the name of the first goal scorer in a big soccer match to the likelihood of a white Christmas.

A number of monthly magazines and other publications have sprung up on the back of the boom, but Deedes said there was room in the market for a daily as well. British gamblers are already served by one daily - The Racing Post, published by Trinity Mirror - but that paper focuses on horse and greyhound racing. The Sportsman, Deedes said, would also include coverage of other sports, as well as other events that draw bets, like elections or corporate takeover battles.

"It will be all the information the full informed bettor needs," he said.

Deedes said The Sportsman would be full of statistics and other betting-related information.

Though it would rely on the gambling business for much of its advertising, he said he hoped that other marketers looking to reach young, affluent men - who make up the majority of online gamblers - would eventually turn to The Sportsman, too.

Though he has yet to raise much of the needed money, he suggested that the paper could eventually spread beyond Britain.

Many countries on the Continent are already well served by sports dailies like L'Équipe in France, Gazzetta dello Sport in Italy and Marca in Spain - in some cases they are their countries' largest-circulation papers - but none specifically aims at gamblers.

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