Communications watchdog Ofcom has thrown a lifeline to struggling regional media companies with the announcement that rules on local media ownership could be relaxed.
Current rules prevent one company from owning more than one type of media, such as newspapers, radio stations or TV channels, in a particular area.
Ofcom said that in the interests of maintaining a range of regional news sources, no company should be allowed to own a local paper with more than 50 per cent market share, a radio station and the ITV licence in an area, but a combination of two of these would be acceptable.
The watchdog is to hold a consultation on this proposal and on removing rules on local radio ownership so that one company could run all the commercial stations in a given area.
Ofcom said action was needed to help broadcasters and newspapers struggling with financial pressures caused by dwindling advertising income and increasingly fragmented audiences.
The regulator’s review comes after communications minister Lord Carter recommended local media ownership rules be changed in his Digital Britain report.
The indications of a change of approach by Ofcom came as the Guardian Media Group – which owns Smooth Radio as well as number of local papers such as the Manchester Evening News and the Reading Evening Post – warned of more restructuring ahead to ensure the business remains successful.
The group said its regional papers have made a monthly trading loss for more than six months.
GMG swung to pre-tax losses of £89.8?million in the year to March 29, from a profit of £306.4 million in 2008.
The group’s regional media business saw its operating profits plummet to £500,000 in the year, from £14.3 million in 2008.
Its radio arm slipped into the red, recording an operating loss of £6.6 million against a profit of £0.1 million last year, a slump which the group put down to “difficult trading conditions and continued brand investment.”
GMG chairman Amelia Fawcett said: “In times such as these it is very difficult, even foolish, to attempt to predict with certainty what lies ahead.
“It is clear, though, that we will need to re-examine and reshape many of our existing business models if we are to continue to be successful.”
Meanwhile, the BBC has announced plans to enhance its regional TV and radio services in the West Midlands.
The BBC will be adding two new weekend bulletins for the region and an “annual state of the region” programme.