Highfield: 'We're like the cinema industry in the 1980s'

 

  • Highfield not 'overly' worried by comany's £352m debt
  • Insists company is not 'robbing print Peter to pay digital Paul'
  • Says he's received 'literally hundreds of emails from staff' supporting his vision

Johnston Press chief executive Ashley Highfield has likened the current state of the regional press to the cinema industry in the 1980s – and insisted its relaunched weekly papers 'should have an indefinite life".

In an interview in the May edition of Press Gazette, Highfield also insisted he was not 'overly' worried with the company's massive levels of debt.

Johnston recently announced a pre-tax loss of £144m after a write-down in the value of its newspaper assets, and after a refinancing deal that cost £11.5m to set up it now has debts of £351.7m.

'It's not overly worrying me, to be honest, because I don't think our strategy would be wildly different if I was swimming in a Jacuzzi of cash,'said Highfield.

He added: 'I think that actually focusing on organic growth and the move into digital and refreshing our newspapers in print, as well as building the digital offering, is what we should be doing, and we can actually do that because of the acquisitions that were made in the late 2000s."

Highfield said Johnston already had a lot of the infrastructure in place and it that it didn't 'need a lot of cash to be able to execute our strategy".

'Let's just get on with it, carry on paying down the debt, and we and the banks are completely aligned in that,'he said. 'So we hope that, by the end of 2014, to have paid up sufficiently that we can maybe look at alternative forms of funding."

In April Johnston announced that all titles were to become digital-first with few daily print titles remaining, after news broke that five of Johnston's 19 dailies are to go weekly: Scarborough Evening News, Halifax Courier, Northampton Chronicle and Echo, Peterborough Evening Telegraph and Northamptonshire Evening Telegraph.

Digital first

But Highfield denied that the company's digital-first strategy would take resources away from print, which remain its main source of revenue and profit (the company wants revenue to be split equally between digital and print by 2020 but at the moment just 5 per cent of revenue comes from digital).

'That's the great thing about this strategy – that's not what I'm doing,'he said. 'We're making sure the journalists on the ground are still able to get their job done, but their job now is to publish on all platforms.

 

'This has no diminution of the impact they can have in print but what it is doing is providing that content in an almost real-time basis online and through iPads.

'So I don't see it as robbing print Peter to pay digital Paul – it is actually about how can we make overall efficiencies across the company to help fund the integrated strategy.

'It is this strategy that sees us putting substantial investment into print, with the relaunch of the papers, and investment into online, all of which is self-funding because we expect to increase circulation and related revenues dramatically."

Highfield recently set out his vision for the company to investors which included a 50/50 split between journalists and citizen contributors by 2020 and a plan to double the operating profit margin and increase turnover to £400m.

Asked if it was possible for the newspaper group to plan eight years ahead given the current pace of change within the industry, Highfiled replied: 'There's a lesson to be learnt from the cinema industry.

'If we'd been writing about cinema in the 1980s and said it was all in decline, that you could just pop down to Blockbuster and rent your VHS. So I think the movie industry did what we are now looking at doing at Johnston Press.

'We are investing in the core product as they had to invest in both film and cinema, so you're investing in both the product and the medium. It is about recognising that digital is an increasingly important part of the mix, but still loving the original format and, as we know with cinema, it became a smaller part of the mix, but through reinventing itself it is a very healthy business.

'I think our relaunched weekly newspapers should have an indefinite life, because I know that for myself I'm going to want to buy The Sunday Times in print forever, supplemented by the daily Times app. That's the kind of model we want to get to for regional press."

Highfield also revealed he had received 'literally had hundreds of emails from staff'from journalists saying they bought into his vision.

'I suppose the only thing you need to get your head round as a journalist, is that that audience in the future is going to be a different mix of print and online, and the vast majority of journalists welcome that, not least because they are already there in the blogosphere and using Twitter, they are already engaging with their audience,'he said.

'Of course if some things impact on Johnston Press to make it a more efficient organization, there will inevitably be an impact on staff, I can't deny that. The staff recognise that, they want to be treated as grown-ups but given a clear direction that the company's heading in."

The full Highfield interview is only available in the May edition of Press Gazette. Click here to sample a free edition of the magazine and to sign up for three issues for 3

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