City analysts say Brexit is good news for newspapers
Newspaper publishers have been among the worst hit by last week’s Brexit vote on the stock market.
Johnston Press’s share price has fallen 30 per cent since Thursday; Daily Mail publisher DMGT’s is down nine per cent; and Trinity Mirror’s is down 19 per cent.
But analysts at Liberum are looking on the bright side, and have given all three newspapers "buy" recommendations.
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Firstly, in the short term, it should improve circulations because of interest in Brexit coverage, Liberum said.
And medium to long term, Liberum notes that the EU referendum can “be taken as a demonstration of how much influence newspapers still have”.
The Sun and Daily Mail, the UK’s highest circulation paid-for daily newspapers, both backed Brexit, as did the Daily Express and Daily Telegraph among others.
Read more: Brexit would not affect UK ad industry spending… not immediately, anyway
Liberum said their influence could be used as a “persuasive argument to use with advertisers”.
The note added: “There is a strong argument that the view of the press influenced the outcome of the vote and, in that regard, it might be taken as confirmation that the press still holds influence: one thing that often gets missed in the debate over circulation volumes is that readership is roughly double circulation volumes, so the reach is far greater than mere circulation volumes assume.”