Nine in discussions with Catalano over print deal

Nine Entertainment Co is in discussions with regional media proprietor Antony Catalano about an extension of its multimillion-dollar printing deal.

Australian Community Media prints newspapers, including The Age and The Australian Financial Review, in areas such as Victoria and Western Australia as part of an arrangement it negotiated with Nine when Mr Catalano bought the regional publishing business last year.

Australian Community Media and Nine are discussing a potential extension to a printing deal.Credit: Louie Douvis

The deal has more than two years left to run, but industry sources, who asked to remain anonymous, said the two parties are already trying to renegotiate the contract. Conversations are in the early stages but involve the way in which the deal is priced and the length of the agreement, sources said. Nine and Mr Catalano declined to comment.

Nine (owner of this masthead) and News Corp Australia both have commercial arrangements with Mr Catalano through his print centres and pay millions for the production of their newspaper titles. Nine's deal with Mr Catalano was originally planned to be "for a short transitional period", but if extended could give ACM an alternative source of revenue to advertising. For large organisations like Nine and News Corp, outsourcing print production is a way to save costs.

But securing a long-term contract could be challenging as the future of Mr Catalano's print centre business is still unclear. The company last month announced plans to close four print centres indefinitely and temporarily suspend a number of non-daily newspapers including the Hunter Valley News and The Wellington Times due to the COVID-19 pandemic.

The crisis has put immense financial pressure on media companies that do business with ACM. Nine and News Corp have slashed costs, reduced working hours and suspended print publications as drastic falls in advertising spend caused by the crisis add to existing financial pressure. News Corp temporarily suspended more than 60 community titles and was planning digital-only futures for  about 30 of the newspapers before the crisis while Nine has temporarily suspended some of its luxury magazine titles. The suspension of these titles has impacted some of Mr Catalano's print centres. One industry source said ACM's print operation costs between $50 million to $70 million to run.

Mr Catalano is weighing up his options after concluding talks with News Corp Australia last week about acquiring the publisher's regional titles. The executive chairman, who bought the regional newspaper group from his old employer for $115 million in cash and $10 million in advertising with billionaire business partner Alex Waislitz, was in due diligence with News Corp until early last week.

Industry sources said the discussions fell apart as News Corp did not want to sell some of its more valuable community titles and was planning to keep the digital rights to the titles it sold off. But others said it was unlikely ACM had the funding to do the deal. Mr Catalano has entered discussions with a number of companies since the completion of his acquisition of ACM last June. The former Domain boss has since bought a stake in Real Estate View and thwarted a merger between Seven West Media and Prime Media Group.