In an unprecedented move, News International, the publishing section of Rupert Murdoch’s vast media empire News Corp, has announced that it is inviting bids for the Times Educational Supplement (TES) and other associated specialist titles.
The TES has long been a market leader in educational journalism covering a wide range of educational matters. The sale is expected to generate some £250 million in total, when taking into account the other associated titles and publications. This is a watershed moment in the history of Murdoch’s dealing in the media market, as the TES would be the first newspaper to be disposed of by his company since he first purchased The Times in 1981 for £12 million.
Along with the TES, other titles included in the sale will include the Times Higher Educational Supplement and Nursery World. This, it is expected, will lead to Murdoch focusing his investment upon the “gold chip” publications (such as The Sun, The Times, The Sunday Times).
Rather than representing an isolated act, this is part of a movement on the part of News Corp to focus their energies in different directions, and follows the sale of The Wireless Group to Ulster TV for £35 million. All of this is designed in part to offset the costs that will be incurred (allegedly amounting to some £600 million) in the expansion of colour print runs for Murdoch publications.
Education = Business?
TLS Education – the subsidiary responsible for controlling these publications – is one of the most profitable specialist newspaper publishers. Figures from the last fiscal year show approximately a 30% rise in pre – tax profits, with sales up from £54.5 million to £56.1 million. And the TES enjoys a substantial circulation for such a specialist paper – the average circulation for the TES is some 96,000 each week, with a further 24,000 being drawn by the Higher Education Supplement.
It is equally important to consider further issues, however, that move beyond the consideration of the profits to be accrued and focus more on the future destiny of the TES, and indeed on reporting in the Education Sector. For instance, anyone wishing to purchase the TES as a business will surely wish to make a profit. Otherwise there would be little percentage in examining the accounts for business practices and performances, as all bidders are sure to do.
One of the things that a new owner will want to do is to raise profits – on the argument that a successful company will generate more investment and advertising interest (where the TES already receives more than £50 million from the Government purse). Two thoughts strike almost immediately; they will try to expand the readership, or they will try to raise the prices.
The Price of Fame
The TES currently charge £1.20 per issue and, if we assume that the figures from the FT are correct, their average weekly circulation of 96,000 will bring them just under £6 million each year from sales. To some, this might appear to be a heavily subsidised company (as if we look at sales figures of £56.1 million, and have newspaper sales of £5.9 million, there is a substantial gap). An argument could be made that this degree of government subsidy puts them at an unfair and unequal advantage.
A rise in prices would not necessarily be popular with the public – it very rarely is – but with the TES possessing a dominant market share in the sector and receiving such a large amount of Government support, it is to be feared that the murmur of discontent would remain just that. The other methods to expand the revenue generated would be either to expand the areas covered outside of the Education sectors, or to cut back on existing provision whilst keeping prices static.
Certainly, those approaching the TLS Education group will be asked to guarantee that their interest in the TES will remain within its current remit of coverage. And it is also true that, whilst they do claim to cover the sector comprehensively, there are certain areas where their attention is less than complete even now. But bidders will need to be closely scrutinised to assure the public that the TES will continue to provide educational coverage.
The public have the right to expect this attention to be brought to bear – after all, their tax money is being spent in the form of the £50 million contribution. This may be an opportunity for the TES to reform and rebuild, to move on to bigger and better things; only time will tell which is to be.
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