Northcliffe shake-up was 'long overdue'

By Martin Stabe and Sarah Lagan

Daily Mail and General Trust has refused to comment further after revealing plans to merge its national and regional newspaper divisions — but some journalists have welcomed the news, calling the shake-up "long overdue".

DMGT’s Northcliffe Newspapers division was put up for sale last year, but was taken off the market after the bids received were said not to be high enough.

The latest shake-up will continue Northcliffe’s Aim Higher costcutting scheme, started in June, and is expected by the company to increase savings to £45m from £30m.

DMGT announced on Monday that it was to merge Northcliffe and its national newspapers arm, Associated Newspapers, into a single division. It also revealed that it had sold Scottish division Aberdeen Journals, which publishes The Press and Journal and the Evening Express, to DC Thomson for £132m.

DMGT is said to be considering a name for the merged business, which will be headed by Associated Newspapers managing director Kevin Beatty. Northcliffe managing director Michael Pelosi will now report to Beatty.

Editors and managers will be restructured into six regional areas. Press Gazette has learnt that managing director in Hull, Phil Inman, is to head up the Northeast, while managing director in Leicester, Alex Leys, will be in charge of the Midlands — a division that will now include the Stoke papers.

West Country Publications chief executive Duncan Currell is believed to be heading up the West Country, and group advertising director at Northcliffe Steve Anderson-Dixon takes over the West region. The other regions are Southwest Weeklies and Southeast Weeklies.

It is understood that long-serving circulation executive Ted Glynn is leaving the company, although he will act as a consultant.

DMGT said the regional structure would lead to reductions in Northcliffe’s "central support functions"

and allow Northcliffe and Associated to "work more closely together" on printing, online operations and back-office support.

One journalist familiar with several Northcliffe papers said the changes were "long overdue" and the group had been long been saddled with a topheavy management structure based in London. Similar proposals to regionalise the management structure had been discussed on at least two previous occasions in the past five years.

Northcliffe’s central costs have been much higher than those of Trinity or Johnston, with which it compares itself when it comes to margins.

NUJ general secretary Jeremy Dear was cautiously optimistic, saying that consolidation of the back-office functions would be unlikely to have a major effect on Northcliffe papers’ journalism, but warned that increasing the cuts sought would have some effect on editorial.

A Northcliffe spokesman said much of the staff reduction had already been achieved, though not necessarily solely through redundancies. "A lot of that activity has already taken place," he said. "At the start of 2005 Northcliffe had about 7,500 employees, and in March 2006 it had about 6,600 employees.

It’s not right to say that 900 have been made redundant — some have retired and so on — but a lot of activity has already taken place. However, we cannot rule out further redundancies."

Dear said increasing savings to £45m contradicted the company’s original claims. He said: "[Northcliffe] themselves admitted you couldn’t save more than £25m or seek higher profit margins without affecting quality, which is why they decided to sell. Now, somehow, they seem to have found a miraculous way."

The Northcliffe spokesman said: "As the Aim Higher programme got underway, it became clear that there were further measures that could be taken.

DMGT will continue its strategy that it has deployed for some years. £27m will go into DMGT’s pension fund and £105m is to go back to the company.

There is also going to be a return of capital to the shareholders of £50m per annum."

The spokesman added: "This is obviously designed to continually improve the performance of the business."

Savings have also been made through the recent closure of the Lincoln Press and the decision not to go ahead with a new print plant at Elsham Wold, in the Northeast.

More details are expected to emerge next week.

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