Pink paper heads back into black

By Dominic Ponsford

Results for Financial Times owner Pearson have provided further
evidence that the press is emerging from the post-9/11 advertising
recession.

The paper recorded its first revenue increase since 2000, with
advertising sales up two per cent. The FT made a loss of £9m in 2004,
compared with a deficit of £32m in 2003, and is reportedly on course to
break even this year.

The pink paper has reduced its costs by
one-third (£110m) since 2000. This has included a broad hiring freeze,
which has been in place since 2002 and resulted in a reduction in
editorial staff of about 60.

A further 30 journalists took
voluntary redundancy in February, bringing the paper’s worldwide
headcount of journalists down to about 320.

The FT recorded sales of £208m (up from £203m in 2003).

Average circulation for the year was 435,000 (down three per cent) with less than one-third of sales in the UK.

But
the paper’s website FT.com now claims 76,000 paying subscribers and 3.7
million unique users. Pearson chief executive Marjorie Scardino
pointedout that this meant the FT now had more paying readers than at
any time in its history.

She also pointed out that the paper had
enjoyed “fantastic” margins at the peak of the economic cycle. In 1999,
the FT posted profits of £56m.

Financial Times Group reported turnover of £587m (£588m in 2003)n and operating profit of £108m.

Most
of the profit (£78m) was contributed by a controlling interest in
Interactive Data Corporation, a specialist provider of financial
information.

Other publishing ventures – such as Investors
Chronicle, The Banker , Money Management and Financial Advisor –
contributed £11m profit (£6m). Joint ventures, including FT Group’s 50
per cent ownership of The Economist, contributed £6m (£3m).

Libel claims

CORPORATE AGGRAVATED DAMAGES TO END?

A High Court decision in a preliminary skirmish between investment
bank Collins Stewart and the Financial Times appears to be good news
generally for the media, writes Roger Pearson.

It is a decision that could be used to preclude corporate claimants
– companies and institutions – from attempting to bolster libel claims
by seeking “aggravated” damages on top of normal damages. If
successful, a claim for aggravated damages can lead to a significant
increase in the final award.

Collins Stewart is suing the FT over
an article published in August 2003 headed “Reputations on the line at
Collins Stewart”, which related to a wrongful dismissal claim against
Collins Stewart by James Middleweek, a former analyst at the bank. The
FT is fighting the claim on the basis of privilege.

However, in
documents filed in the claim, Collins Stewart also referred to
subsequent articles which it was not suing in respect of but in respect
of which it sought to increase any ultimate damages award.

Now
though, Mr Justice Gray, one of the country’s senior libel judges, has
struck out this aspect of the claim on the basis that, viewed as a bid
for aggravated damages, it could not succeed since Collins Stewart was
a “corporate claimant” and as such was not able to suffer injury to its
feelings in the way that individuals who can claim aggravated damages
would.

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