Thursday, 22 February 2007

God Franchise mega-merger

The Economist isn't often the source of witticism, but certainly the current issue breaks new ground in describing the 'inter-faith dialogue' between Papists and Prods in terms of an international mega-merger - which of course is exactly what it would be. While your Savant has been able to identify the respective market penetration rates, unfortunately we're unable to establish revenue figures or margins. However, given that all profits are tax-free these should be substantial. As we'll see, the management structure of the combined company could pose a problem, especially with the Pope as CEO. However, your Savant believes that if God could be
induced to act as Chairman of the combined entity, this could be overcome. All in all, a good investment.

So here's the analysis:

The prospect of a tie-up between a vast, Rome-based corporation, and a smaller rival with headquarters in southern England, has sent some analysts into a speculative spin. Early discussions are said to have taken place between representatives of two long-established groups. If successful, the deal would see a parent company rejoined with a unit that separated from it, somewhat acrimoniously, in the 16th century.

Some observers suggest that this deal may be at least as significant as the split and subsequent remerger of parts of the AT&T, a telecoms company that held a monopoly position in America until the 1970s. As with AT&T, the break up of a once-dominant organisation inevitably leaves deep scars. But over time, as new competitors with new ideas change the business landscape, the abuse of monopoly power and the pain of parting may be forgotten for the sake of mutual gains. AT&T’s eventual remerger in 2006 with BellSouth, a branch of the telecoms giant snapped off in the reformation of America’s telecoms business, was acknowledged by most as a sensible reaction to the changing competitive landscape.

That may also be true for the two dominant forces in Christian communications. Christianity still claims consumers representing roughly a third of the world’s population. Of these the Catholic brand, with its headquarters in Rome, boasts 1.1 billion adherents. The Anglicans also have global reach, but would bring around 80m adherents to the united corporation. Still, at a time when Christianity is suffering from sluggish growth rates, expansion through mergers seems to be the only means of gaining market share. Traditional worshipping establishments have seen serious competition from Evangelicals and Pentecostalists operating from out-of-town megachurches. Older forms of Christianity, rather like print newspapers, are also losing out as elderly customers fail to be replaced by younger ones and as occasional consumption—rather than traditional, regular use—becomes the norm.

Both churches have sought to downplay talk of a merger. And, evidently, several obstacles remain. As with any merger, knitting together rival management teams could prove tricky. Each disagrees on the nature of the eucharist and the ordination of women. Recognising the pope as the boss of a merged corporation might also prove a sticking point. The Anglican brand also looks troubled. It lacks a clear business model and suffers from open divisions among top managers who have far more devolved authority. Many managers are engaged in a bitter dispute over the hiring of homosexual staff in its American subsidiary. In contrast the Catholic church has a clear line of command between its chief executive, its 4,700 senior executives and 400,000 line managers around the world. Not to mention the ongoing link from its CEO direct to God.

Yet potential synergies abound. Combining workforces could allow for significant cost savings, though job cuts might prove unpopular. Buoyant property markets mean that a merged church could profit handsomely by selling surplus assets, many of them in prime city-centre sites. As the two organisations would not benefit equally—the merger would in effect be a Catholic takeover of its smaller rival—Anglicans may prefer a looser bond, perhaps hiving-off some assets into a joint-venture or even, looking to the heavens, embracing something akin to the code-sharing agreements between big airlines. Whatever form the merger eventually takes, if any, at least the two groups have shown they are serious about getting the mass-communication business in shape for the 21st century.

1 comment:

pope benedikt said...

I haf to be the boos of the new outfit