What's The Future For Johnston Press?
The Edinburgh based publishers of hundreds of local newspaper titles and associated websites, appears to be facing ever increasing financial difficulties. Many of Calderdale’s own local newspapers including the Halifax Courier, Todmorden News and Hebden Bridge Times, could soon cease to exist if the downward spiral of Johnston Press’ share price continues.
At this time last year, the publishing giant’s shares (JPR.L) were trading at around 250p, and six months later in July, they had plummeted to just above 30p. By December, things begun to look disastrous, as shares hit an all time record low of 6.40p. By dramatic contrast, in August 2007 their shares were changing hands at a much healthier looking 380p.
To add to their woes, NUJ representatives from their main publishing centres unanimously backed a motion of no confidence in the company’s senior management during the Summer 2008, and the union took industrial action on several occasions to express their concerns and dissatisfaction.
In December, Johnston Press effectively froze the pay of all it’s employees by deferring this years basic salary reviews for six months, and in response the NUJ issued a strongly worded statement which levelled an accusation of “appalling financial mismanagement” at the company.
At around the same time, it was announced that advertising revenues had slumped by 21% for the second half of 2008, and pre-tax profit had also fallen by 18.1%. And with rising costs, around £700m worth of debt and ad revenue being such a crucial part of the modern publishing business, analysts have suggested that a covenant breach was “likely”.
The situation raises serious concerns about the future of titles such as Todmorden News and the Hebden Bridge Times, and the viability of the continuing production of these titles under Johnston Press’ governance appears slim at best.
In his book, Nick Davie’s cites a Cardiff University study of four quality newspapers which found that 60% of their home news stories were wholly from wire agencies, mainly the Press Association, or PR material, 20% partially so, 8% from unknown sources, and just 12% generated by reporters. The Press Association reports only what is said, it has no time to check whether it is true. There are now more PR people, 47,800, than journalists, 45,000.
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