Local newspaper publishers Metro Media Publishing and Star News Group are joining forces in Melbourne’s western suburbs, staff at both publishers learned at 10am today. A new joint venture, 67% owned by MMP (itself 50% owned by Fairfax) and 33% owned by Star, will publish six titles from May 2014 under the Star Weekly banner, with a circulation MMP says will be more than 320,000.

As a result of the consolidation, 20 redundancies will be announced from MMP, with most of them coming from the commercial side of the business. Asked how many redundancies were likely to come from editorial, an MMP spokesman said: “very few”. Jake Wishart, the Media, Arts and Entertainment Alliance union rep for both companies, told Crikey it was “a difficult day for community journalism in Victoria”.

The joint venture — first flagged as a potential merger by Crikey on Monday — will help the local publishers take the fight to the News Corp-owned Leader Newspaper stable, which is the dominant local paper group in Melbourne’s west. Community newspapers are reliant on real estate advertising, and in many areas, including Melbourne’s west, this is increasingly bought by local real estate agents. This has led to a rapid decline in advertising rates as the whole community newspaper sector is being squeezed.

Only readers in Melbourne’s western suburbs will see new papers as a result of the joint venture (with the publishers keeping their own separate titles in other areas of Melbourne), but it will have deep implications for the commercial side of the businesses. The two companies are merging their classified call centre teams to create one business that will sell advertising not only across the publications within the joint venture, but also across MMP’s Weekly Review franchise in central Melbourne along with Star’s eastern and south-western publications.

Many advertisers, particularly government departments and the like, prefer to deal with one group selling across suburban Melbourne rather than the myriad groups dominant in different parts of the city. Leader is already able to offer this central point-of-sale to advertisers; because of the joint venture, MMP and Star hope they’ll be able to do the same. “We now have access to a superior network for major advertisers,” said MMP chief operating officer Trent Casson in a statement.

MMP will take on responsibility for the real estate and retail sales for the merged titles as well as across Star’s stand-alone publications. After MMP closed seven titles in June last year, the two groups no longer directly compete in Melbourne’s suburbs. The joint venture is expected to be finalised by April 2014.