Agents take “short-term bribe” to put newspaper out of business

A fascinating story in Estate Agent Today this morning demonstrates the power of large media organisations to manipulate market behaviour to their commercial advantage.

A battle between two newspaper groups in the UK’s second city has finally been won by the firm who had the resources to make a huge short-time bribe to the city’s estate agents.

The Birmingham Free Press, owned by an independent publisher Chris Bullivant, recently offered agents in the city an equity stake in return for backing him against corporate rival Trinity Mirror, owners of The Birmingham Mail.

However, in a meeting last week, agents in the city decided to reject the offer, instead deciding to accept the offer of 2 page full- colour adverts in the Trinity Mirror title for £250 a week, a tiny fraction of the rate card price.

The offer is open until December 2012 and will result in a huge dent in profits for Trinity Mirror.
Chris Bullivant believes he had no choice but to withdraw from the market:

“I was approached by a number of the Birmingham estate agents and asked if I could compete with the BPM Media price. I had to say that I could not – and I had to start the withdrawal of my newspapers from Birmingham as a result”.

Short-term move

Ignoring the debate about whether spending a thousand pounds a month on print advertising represents value for money, it is easy to see the attraction of taking double page adverts for a fraction of their rate-card cost.

However, the result is likely to be higher prices in the longer term due to restricted competition. The advertising is also likely to have less impact as it will surely result in far more advertising pages for readers to sift through.

By all accounts, the Birmingham Free Press was a good newspaper but in this market it seems the overwhelming instinct for all small business owners is to take a tangible saving now rather than wait for the promise of jam in the future.

Source: Estate Agent Today

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