how regional media companies brought themselves down

There's no question the news landscape has changed. But why have the big media companies allowed it to change? And what does the future look like? In this take the National Union of Journalists' Chris Morley poses a few awkward questions.

by Chris Morley

I first started work as a trainee on the Walsall Observer in 1983. At that time it sold about 35,000 copies per week and had an editorial staff of an editor, deputy editor, sports editor, chief reporter, four senior reporters, two photographers and three trainees.

It was the pre-eminent of three weekly newspapers in the borough, holding its own against the mighty dailies of the Wolverhampton Express and Star that had a team of 10 reporters and photographers and the Birmingham Mail that had two reporters.

By the 1990s it had turned free and was subjected to years of neglect. By 2009 it was killed off with a total editorial workforce of one trainee and an editor with five other titles to look after.

Now, Walsall, a metropolitan borough of 350,000 people does not have one professional journalist working there. The nearest work more than ten miles or more away in Tamworth and Cannock.

The decline was predictable and a result of a starvation of investment by owners, Trinity Mirror who just gave up in favour of retreating to its local Birmingham stronghold. This is a sad story but one that should make you angry, not believing this was just the victim of age-old market forces. It’s a story that’s also been replicated around the UK by the owners of newspapers who do not care about their titles as anything more than the means to make money.

According to Press Gazette, 242 local papers shut between 2005 and the start of 2012 and news-free zones have started to be created where no local paper covers a town’s affairs. One such was Port Talbot where there is a population of 50,000 – without a local newspaper since 2009. Enterprising ways are being found to plug the gap but it is not with a newspaper.

It would be easy to view the loss of these papers, like the Walsall Observer, as the unfortunate consequence of the double-dip recession and harsh market realities.While I don’t deny that there has been a big squeeze on the traditional revenues of local media, also significantly including independent radio, the scale of the damage that has been wrought has been massively exaggerated by the greed, incompetence, mistakes and short-sightedness of owners and managers. Yes, there have been what look like structural shifts away from traditional advertising – to the internet for instance – but in my view vastly overpaid corporate “yes men” lost sight of what was key to their businesses and failed to adapt in a timely and common sense manner. Instead they took the lazy way out to cut their way back to higher profitability.

So what have been the consequences?

There have been so many casualties, the local media scene looks like a war zone. Almost every newsroom has been cleared of at least half – and sometimes more – of its journalistic staff. The chief targets in newspapers have been production journalists – subs – and photographers, the bosses helped in their quest by new smartphone technology that they claimed made everyone a photographer. The Daily Mail General Trust admitted last year that half of its 4,200 staff in its Northcliffe regional newspaper division had been cut since 2008. In independent local radio, those few journalists not made redundant, were largely moved to hubs serving multi radio brands, covering big geographical areas. Pre- recorded bulletins were more frequent and fewer stories covered on the ground.

The job losses among local journalists have been in their thousands, and while many have fought – such as the NUJ chapel at Warrington that held a successful strike in September 2011 that saved a number of compulsory redundancies – many have chosen to leave the profession voluntarily as media groups have cut conditions. As an example, there has been a pay standstill for four years at Newsquest, combined with almost annual demands for unpaid leave to also be taken.

There is no doubt that recent years have seen big falls in advertising revenue and plunging circulation – for many titles double digit year on year. But it is easy to be suckered that this has been a natural process. In reality it has been aided and abetted by local media executives themselves. In the so-called golden age local newspapers, the 1960s, companies always had to spend to make sure they kept themselves in the eye of their communities – and to fight off rivals. 

That meant having a base in the centre of town that told everyone you meant business, sponsoring events in the city, strong distribution including having a van fleet with your own livery on the side and employing journalists who got out into their communities creating a buzz wherever they poked their noses.

At its height, my old paper, the Birmingham Mail, sold 444,000 copies a night. It now sells 40,000 in a city of one million. Yes, other factors have been brought to bear in the intervening years – local BBC radio, the internet, cable and satellite TV, mobile phones etc. But the fact is that managements have also been responsible for effectively hobbling their own business.

By the late 90s, local newspaper profit margins ranged from a minimum of 20% to 35% and more. Very few industries could boast that sort of money-making prowess But instead of re-investing smallish sums to secure the future for their core product, greed drove them on to find even higher sums, not by growing their business organically but by cost-cutting. Jobs were already being slashed years before even before the first effects of this latest downturn was felt. Not just journalists, but more seasoned circulation staff who knew how to maximise the sales from strong stories and talented advertising professionals who weren’t needed.

They went as arrogance took over that the advertisers didn’t need chasing thanks to the city and town monopolies created by loose “gentlemen’s agreements” not to fight rivals too hard on the circulation fringes to drive up profits.

Then the liveried van fleet was outsourced to get rid of costly directly employed staff in favour of anonymous contractors. And town centre vendors, who could hardly ever hope to cover their own cost from just the cover price income of their daily sales. But without them on the streets, their sales were lost to the daily total. In Birmingham, 17 were savagely cut to one in 2009. It is akin to self-harm. And at a time when production journalist cuts blunted the edge of content and increased mistakes while employing reporters lowered the depth and breadth of coverage. Is it any wonder readers voted with their wallets?

But the dazzling disasters came with outlandish rewards for failure at the top. Despite shareholders not receiving any dividend from 2009 onwards at plc Trinity Mirror, former chief executive Sly Bailey had been lavished with an annual package worth £1.7m. She turned the company from a value of £1 billion to just £80 million and a share price of £380 to just 30p. During her ruinous reign, the number of employees went from 12,000 when she took over to 6,000 now – but at the same time she personally amassed pay and perks worth £14 million. Nor was she alone. Tim Bowdler, the boss of Johnston Press, was feted at the time for his macho takeover campaigns in the earlier part of this decade in which astronomical sums were paid for newspaper assets in Ireland and Scotland. He racked up nearly £1 billion acquisition costs in a reckless charge, including £160m in 2005 for The Scotsman which is unlikely to be worth a quarter of that now. For the price tag, they didn’t even get the building it was in!

This particular paper tiger got out with his millions just before things turned and Johnston Press shareholders found their shares – which had been £4.61 in 2007, suddenly hit just 5p. And again, the casualties were the staff who were made redundant in their hundreds.

As a union, we have always maintained that local media is still, despite the economic climate, profitable and that there is still a thirst for quality local news that can sustain viable businesses but the dominant ownership structure is dragging it down.As an example, look at the creation of Local World, a merger earlier this year of Iliffe Media and Northcliffe titles.

The Daily Mail General Trust, which retains a sizeable shareholding in the new venture, gave it a dowry of being debt-free and without the burden of responsibility for the deficit on the old final salary pension scheme.

The result is that in the first three months, it is calculated to have made £7 million profit and it is expected to be £30 million in the full year. You would think that this could open up a bright vista for its journalists and the communities its titles cover. But sadly as a union we have big concerns, again arising from the track record and utterances of the owners. Chairman David Montgomery, erstwhile editor of Eddie Shah’s Today and Rupert Murdoch’s News of the World, dropped out his nightmarish vision of local journalism to MPs on the Culture, media and sport select committee. He said that the practice of professional reporters collecting stories was “medieval” and outlined his faith in getting content in robotically.

He said: "We have to be truly digital, so that in three or four years from now, much of our human interface will have disappeared.

"We will have to harvest content and publish it without human interface, which will change the role of journalists. Journalists collecting stories one by one is hugely unproductive. They will have to have new skills, greater responsibility for self-publishing on different platforms."

So, I can only conclude that today’s owners and managers are the ones that have wreaked havoc with our media and are the problem, not the solution. They are going round using their considerable clout to anyone who will listen in government and the wider Westminster lobbying bubble, that the answer is to let them get even bigger by consolidating so that they can take out more cost – professional journalists and the like – and the sector will be healthy again.

But this sort of structure has proved to rotten and found wanting for an industry that means much, much more for a democratic society than that of a mere business.We are exploring how we might be able to use the new Localism Act brought in by the Coalition Government to dismantle community public services to instead turn the tables so that uncaring media barons can no longer shut down titles without allowing the local community to have a chance to rescue them.

At the moment, historic newspapers such as the Walsall Observer can shut and their titles kept gathering dust by the company that failed them. We would like powers to be given to local communities to allow them time to prepare a sustainable business plan if a title is facing closure.

And why not even compel those companies to simply give up the community asset they have deemed surplus to their requirements? The NUJ does not have any prescription for how the media should be owned, but what it must do is be stable and confident so that it can do its real job properly – holding the rich, powerful and those with vested interest to scrutiny and account in the public good, while standing up for those that do not have a voice.

There is no single solution but this meeting is a very necessary start to finding ways to get us back on the right lines.

Chris Morley is NUJ Northern Organiser. The blog is based on a talk organised by Coop UK paid for by the Carnegie Trust and supported by the NUJ.


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