Cards on the table time for would-be merger kings

So, what to make of the government's Digital Britain report published yesterday, and in particular its recommendations about whether the current newspaper merger regime should be relaxed?

Well, at first glance, the government appears to have managed the considerable feat of pleasing both Trinity Mirror chief executive Sly Bailey, who had argued for relaxation of the rules in order to allow greater industry consolidation, and NUJ general secretary Jeremy Dear, who had argued precisely the opposite.

Mr Dear sees the government's refusal to change the existing law as evidence that it is not going to allow what he calls "media plurality" to be undermined.

But Ms Bailey on the other hand says that legislation is not really the issue, and that the decision to allow communications watchdog Ofcom a bigger role in assessing merger proposals is a "step in the right direction."

So who's right in their interpretation? Well, as our main report on HTFP yesterday may have indicated, we're going with Bailey on this one.

Like many government reports - and as an ex-lobby hack I've read a fair few in my time - this is one where you really have to read the small print rather than simply reading the headline.

By ruling out a change in the law, the government is not saying no to further regional press consolidation, it is merely saying that the existing merger regime is sufficiently flexible to deal with any such proposals.

The clue was in the paragraph that read "there may be some lessons that could be learned from a detailed inquiry into a specific merger or transaction involving the local and regional press." This seemed to me to be tantamount to an invitation to publishers to bring forward a specific proposal which could then be used as a test-case.

There has been intense speculation, mainly in Sunday newspapers, that the big regional press publishers are set to engage in a round of asset-swapping to enable them to achieve greater geographical consolidation.

Without going into details, some of the scenarios that have been outlined seem literally incredible to me, but stranger things have happened.

I think what the government is effectively saying to the regional press in this report is: bring forward your merger proposals, and we'll show you that we're quite capable of dealing with them in a way that recognises present-day market realities.

In other words, the ball is now firmly in the industry's court.