Gloves off for the Johnston Press blame game as Reach goes back to regional subbing hubs with a difference and my part in the creation of a newspaper production monster…

Johnston Press has gone into administration.

The writing has been on the wall for Johnston Press for a few years due to the massive debt the company was juggling with, so it was no surprise that the firm went into administration.

 

Where do we lay the blame for the chaos that surrounds the collapse of Johnston Press? The management? The journalists or journalism? The changing media landscape?

I know that some of you won’t want to play the blame game, but hell, I just feel like it.

As soon as JP went up for sale for £250m we all knew that no-one from outside JP was brave enough to empty their bank account to buy into a turbulent newspaper business.

The CEO of JP and now the CEO of  the newly-formed JPIMedia, David King, put his finger on the button when he announced that the business was going into administration.

He blamed the firm’s acquisitions in the early 2000s as the cause of the firm’s financial mess, you’re not joking…

Obviously, hindsight is a wonderful thing, but it was in the 2000s that Johnston Press made some astonishing moves, not astonishing for what they bought, but what they paid.

I remember raising an eyebrow as the firm splashed the cash like a drunken gambler who believes they can’t lose so they keep spending.

In 2002 the managers paid a staggering £560m for Regional Independent Media (RIM).

“This is a transforming acquisition for Johnston Press at a fair price,” said Roger Parry, the then chairman of Johnston.

Fair price. Really? Mr King said that it was not obvious that the business would suffer from the impact created by the rise of the web in 2002 with the loss of classified and motors and the rise of Google and Facebook.

Maybe, in 2002 he was right, it was not too easy to see what lay ahead for the newspaper industry with the rise of the web, home wi-fi, smartphones and Facebook.

But we all knew something was in the air, even back in 1999 as I sat in an office in Lincoln with a ‘dial-up’ to get online. Ok, it didn’t work very well, but even for a then naive deputy editor, I knew things were on the cusp of changing.

This was also pointed out by David Higgerson, Reach’s Chief Audience Officer, who at a conference I attended last summer pulled out a copy of the Birmingham Mail from 1999.

That paper had a puff across the top welcoming a new health and fitness supplement.

As he rightly said, it was an attempt by the paper to grab new readers as sales of the paper continued to slide. It was almost unspoken pact, that we dare not talk of what lay ahead of us, but we all knew, didn’t we?

But when Johnston bought the Scotsman Group for a mouth-watering £160m and were said to be in the frame to buy Northcliffe for £1.6bn in 2006, you would be rightly concerned about who was giving out the advise.

Ok, I accept that this maybe easy for me to say, but by 2006 the writing was firmly on the wall.

In early 2006 Northcliffe had brought in Aim Higher, yep, the accountants were in the corridors of most newspapers in the group counting stories and paperclips.

Job losses were firmly on the card, it was a big clue for the Johnston managers. The second clue came when Northcliffe decided to sell its cherished regional newspapers.

The papers, once loved when they used to bring in £96m profits a year, went from being the most-cherished child to the black sheep of the family.

Oh, the final bit of evidence surrounded the fact that newspaper sales had been in decline since the early 80s anyway. Yes, financially they had held up well, but that was without the threat of the web.

The problem was that the business model was too fragile. It relied too heavily on certain areas of advertising and failed to pull in more income in from cover price, which only ever crept up a penny or two and therefore was never enough to prop the business up.

Despite this evidence, Johnston ploughed on and snapped up the Scotsman titles which only made £7m in pre-tax profits in 2004 anyway, hardly a great acquisition for £160m.

So there were some pretty good indicators around that maybe it wouldn’t be worth paying such large sums for a newspaper business in decline.

And here we are today, a company riddled with debt it cannot pay. Administration had been on the cards for a long time.

Now a new company, JPIMedia, made up of those who were owed money by the old Johnston Press, has been created to run the business.

Under the deal, £135m will be wiped off the firms debt, £35m injected back into it and more time to pay off the remaining £85m debt.

The new company has body-swerved taking on the pension scheme which did not transfer and will come under the Pensions Protection Fund, a scheme set up by the government to provide pension benefits to members of scheme whose employers have become insolvent.

While the pension should be safeguarded, according to holdthfrontpage, some of the pension pay-outs may not be as high. This is a bitter pill for staff.

On the up side, we are told by the new company that jobs are safe, there’s not even that good old ‘for now.’

It is a grand statement to make as the regional newspaper continues to reconfigure weekly to meet the needs of its consumers and the business.

The reality in my opinion is that JPIMedia, like its fellow media groups, will inevitably make editorial cuts once the dust has settled and there’s a debt to service.

This is because, with falling newspaper profits and circulation to consider, despite a growing online presence, I think the only way financial targets can be hit is via streamlining.

We have seen the latest remodelling of the industry with recent job losses at Reach Plc, the old Trinity Mirror, where 41 more production jobs are going.

A few years ago I welcomed the steady move away from regional subbing/production hubs to a return to producing the newspaper on your home soil.

But the latest plan, on top of regionalised sports departments and centralised page units, does see a return to centralised subbing hubs, of sorts.

Before I move on and because I was feeling nostalgic, I managed to dig out some old notebooks (see photographs below).

They show my wild scribblings as I put together a new workflow plan for the then newly-created subbing hub in Stoke-on-Trent, the home of The Sentinel.

Stoke was one of several hubs which took in pages from other Staffordshire newspapers including Tamworth, as production was streamlined and subs lost their jobs.

IMG_5297

This rough diagram shows how I was trying to provide a new workflow system for the subbing hub in Stoke-on-Trent, the home of The Sentinel.

My jottings also show my attempts to calculate how many pages had to be subbed per paper, per day, per sub. Yep, terrifying.

IMG_5296

In this picture I’m attempting to work out the number of pages to sub per day per newspaper and how many staff in the would be required in the Stoke-on-Trent subbing hub, the home of The Sentinel.

It is different this time, as I understand it, looking from the outside in. This time there will be production staff still in the local centres.

The subbing hub will be virtual, so, for example, as I understand it, in my area there will be one big production unit covering the East and West Midlands.

While the local teams will take care of their paper, they will also have the capability of helping out the other centres when the pressure is on and there is a greater ability to share content/pages.

The outcome of all this? Probably more generic pages, similar to the ones which appear in the regional papers at the moment.

You know which pages they are because it’s like you are reading two different newspapers every day, but that’s just my design snobbery coming out, but boy do they look ugly…

Secondly, based on some recent research of one of my University of Derby students looking over the last 30 years, which shows that story count in the local press is way down, I’m wondering if this trend will continue?

Please note, at the moment I’m not saying this is a good or bad thing, it’s a debate for another day, particularly on around what is local?

One of the issues is that most of the content comes from the web. This is a bit of a poison chalice, because while the content is perfect for the web, it can be more difficult to translate that into newspaper content.

It’s the reverse of the argument in the late 1990s early 2000s when newspaper content was uploaded onto the web.

The problem with that was it was impossible to search for a story online with a newspaper headline.

Let me assure you, somewhere in the ‘cloud’ are a load of stories no-one will ever find, because they have a newspaper headline, not a web head.

Finally, there’s the thorny issue of errors. holdthefrontpage used to have a field day during the old days of the Northcliffe subbing hubs when it found an error in a newspaper, for example, such as Lincoln, because it was subbed in Hull.

The difference this time is that at least there are some local staff at the local centres who should be able to pick up any problems, hopefully.

So is this latest move good or bad? My old journalist bones shout out ‘oh no’ but I’d rather have journalists employed and a newspaper to buy.

The newspaper industry has to use the technology it has at its disposal, for too long it relied on the old ways of production.

From what I know, there’s still some terrific journalists in the print units who through sheer love of the job will continue to turn-out newspapers to the best of their ability.

For too long, newspapers buried their heads in the sand. You can see by going to www.archive.org and checking out some of the regional websites and realising how far behind they were even in the mid-2000s.

The industry failed to modernise quickly enough. Now it’s all coming at such a pace, it’s hard to keep up. Let’s hope it works.

So back to my original question, is there anyone to blame for poor old Johnston Press going under?

OK, none of us claim to be Mystic Meg, but the foolhardy nature of Johnston’s spending in the early 2000s suggests, without sounding like a shop steward, I think the blame must lie with those in charge.

If Lord Rothermere was prepared to sell Northcliffe without looking back in anger in 2006, surely JP’s top team must have had a whiff of what was going on…didn’t they?

 

 

 

 

 

 

 

 

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1 thought on “Gloves off for the Johnston Press blame game as Reach goes back to regional subbing hubs with a difference and my part in the creation of a newspaper production monster…

  1. A great read and many valid points, but did Regional Press simply miss a trick by not digitalising the classified rivers of gold? A quick glance at the latest accounts for RightMove and Auto Trader sees combined revenue North of £600m and aggregated operating profit in excess of £400m.
    Fish4 was an unmitigated disaster, but would have a bunch of visionary collaborators back in 2001 have resulted in a very different Regional Media lanscape today? The reluctance to invest wisely in the digital future back in 2000’s is a significant factor in the state of the industry today. Hindsight is a wonderful thing!

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