As of today, Agora introduced editorial changes to its flagship publication “Gazeta Wyborcza”. At the first glance, there seems to be more quality content, with larger culture sections (Oscars) and improved sports coverage. The newspaper has been published with a new, more transparent layout. There are large-scale advertisements from car manufacturers and financial institutions, which apparently went absent in 4Q05. In addition, “GW” has revamped its TV supplement and introduced a new Sports supplement over the past few days.
Editorial changes, coupled with heavy promotional support on outdoor billboards, come ahead of the expected launch of the new Axel Springer Polska quality newspaper, originally scheduled for March. According to the latest news, the launch has been delayed by one month, as ASP considers bidding for the majority stake in “Rzeczpospolita” from Norway’s Orcla.
We think that concerns relating to Axel Springer Polska's new daily are overdone, as we believe that the leadership of “Gazeta Wyborcza’s would be even more difficult to undermine by a new entrant, after the latest set of editorial changes. We reiterate our Buy rating for Agora with PLN 60.1 fair value estimate.