The Pattison Group Purchases Comag: Is Anyone Worried?

The message seems to be this: Everyone stay calm. The sky is not falling. And there will be no massive anti-trust style litigation.

I’m talking, of course, about the acquisition of the Comag Marketing Group by the Jim Pattison Group; and judging by the trade coverage of this event (not so much) everyone seems to be staying very calm indeed. Which is interesting, since JPG owns The News Group, the largest magazine wholesaler in North America. Pattison’s name is so closely associated with TNG—people often refer to the News Group agencies as the Pattison agencies—that it is hard to avoid the perception that a magazine wholesaler has just acquired a national distributor.

This, we are told, is not precisely the case. The News Group and the Comag Marketing Group are now sister companies owned by the same parent company, much as another large magazine distributor (Source Interlink) once purchased a stable of magazines (Primedia Enthusiast) and ran them as sister companies.

That purchase did not fill me with enthusiasm and neither does this; I guess you could say I’m not a big fan, personally, of vertical integration. But I can’t seem to get anyone else worked up about the possible negative repercussions of this purchase and I don’t want to be Chicken Little out here all by myself. In case you did want to worry, here are a few incidentals to add to your mental list:

1)      Are you a publisher that has different discounts with different wholesalers? There’s possible exposure here—with the possibility that TNG now might have access to all that information. On the other hand, publishers have been aware of their exposure on the discount front for quite a long time, and wholesaler consolidation has forced the standardization of publisher discounts nationwide.

2)      Are you a wholesaler that competes with TNG? If you are—and there are a couple of you out there still—might you be worried that TNG is standing by ready to pick up any pieces of possible disagreements with a large national distributor? I think I might be worried if I were in your shoes. Still, perhaps the threat of the anti-trust litigation I mentioned above will serve to create a balance of terror that keeps everyone in a much-needed equilibrium in a volatile industry.

3)      Are you a publisher that has product at another national distributor and fears the power of Comag with the News Group? Again, I am told, not to worry. The corporate structures are different and will be kept different. Plus, your own national distributor, whichever one it is, has a strong product line of its own; TNG won’t want to compromise their relationships there. And anyway, we’re used to these kinds of intercrossing threads in our business—national distributors owned by competing publishers, wholesalers that own competing publishers and so on.

So while on one level we have a massive paradigm shift here, on another it’s business as usual. If nothing else, in and out of our business we’ve learned that no one is really that organized to effectively utilize the resources of powerful and vertically-integrated companies to the degree we can theoretically envision.

And that, I suppose, is a comfort. Isn’t it?