A new media company has been created to manage the two biggest newspapers in Puerto Rico as part of a restructuring move.
The editor of El Nuevo Dia and Primera Hora says both papers will continue to be published under the format of their current print and digital editions.
Maria Luisa Ferre Rangel said Wednesday that the sales, advertising, human resources and other departments at both papers will not undergo any changes either.
But she said an internal news agency will be created as part of the restructuring move to produce news 24 hours a day for unspecified local media sites.
Ferre will oversee operations at the newly created GFR Media Group. Newspaper officials said they would release more information Thursday.
Analysis
Considering the depression the Puerto Rico market has been in for the last 12 years, this new company might be an attempt to pull together the diverse assets of El Nuevo Dia and Primera Hora to consolidate their respective values. I've heard that the Ferre Rangel family has wanted to sell the papers for a long time.
On the other hand, I'd like to remind everyone of the stranglehold that this new company has on local advertising spending. With over 65% of the local ad spending, this new company has solid short term earnings potential.
We should also recall that GFR Media Group is deeply integrated in the advertising agency monopoly that has so far successfully stunted the growth of Internet marketing in Puerto Rico. Please remember that Puerto Rico is unlike the United States, where television is the leading beneficiary of advertising spending and Internet Marketing is > 9%. In Puerto Rico, Internet Marketing is not even it's own category, with < 1%. Of the Internet Marketing happening in Puerto Rico, I assure you, GFR Media Group has an even bigger percentage due to their collusion with the advertising community.
Conclusion
El Nuevo Dia has been aggressively trying to replace the revenue lost to the free online classified advertising web sites. Just within the last five years they have launched InfoPaginas.com, a printed telephone book, and an online e-store. If were running GFR Media Group, I would be very worried. They've been able to survive the declining revenues that have claimed many local newspapers, however, the outlook does not look good.
I don't believe the vise-like grip that the duopoly of GFR Media Group and the local advertising agencies can hold back the self-service, convenience, and cost-effectiveness of Internet Marketing. Once the Internet Marketing dam breaks, I believe GFR Media Group will bleed red ink like it's been shot in the femoral artery. So if I were running GFR Media Group, I would slap a ton of lipstick on this pig and sell it as quickly as possible.
