WPP chief executive: Governments might prop up media

Posted by Erina Lin on February 2, 2010 at 4:58 PM

Sir Martin Sorrell, the chief executive of marketing group WPP, said governments might need to subsidise newspapers such as the Guardian, if they continue losing money and reach a point that could terminate their businesses, Media Guardian reported.

Sorrell said in an interview with Arabian Business that "governments probably have to decide whether consolidation and media titles going out of business is the right thing from an editorial point of view... The electorate is going to say whether they believe there should be more subsidies for traditional media."

He specified one example of the Guardian, which is currently going through cost-cutting plans to make up for losses. Sorrell said the government may have to consider subsidising the paper or give tax advantages "to people to subsidise it".

"For example, The Guardian newspaper loses money. In the long-term it can't go on losing money. So let us say, hypothetically, that The Guardian could not continue to lose money after a certain period, then you would have to think about whether the government should subsidise it, or whether you give tax advantages to people to subsidise it. There are plenty of ways to skin that particular cow," according to Arabian Business.

Sorrell said that this move to help newspaper business could be viewed as the government's strategy to prop up financial institutions during the crisis, MediaGuardian reported.

"You could argue that newspapers provide a vital service [like banks]," he added. "It is the same issue, whether the state should intervene in certain issues to help preserve a service. That is what every piece of welfare economics is based on."