One of the UK’s most experienced regional editors has urged the big four UK regional press publishers to return their hundreds of newspaper titles to local ownership.
Former editor of the Lincolnshire Echo, Western Mail, Derby Evening Mail and Newcastle Journal Neil Fowler last night used a lecture in Oxford to attack the big four publishers for failing to invest in the future during the period from 1989 to 2005 when they were enjoying 30 per cent plus profit margins.
And, noting the huge level of debt some publishers are carrying – he suggested it may be time for them to default in order to allow more investment in local news provision.
Fowler delivered his lecture as the culmination of a year in which he has been a Guardian research fellow at Nuffield College.
Setting out a blueprint to save the UK regional press, he said: ‘Moves should be made to help the three PLCs – Johnston Press and Trinity Mirror in this country – and Gannet in the US [which owns Newsquest] – to have, in the words of the moment, an orderly default on their debts.
“They are all stuck in a no-man’s land of inertia. Their shares are all very low. The individual parts of their companies are clearly more than the present sums – Johnston has a market capitilisation of around £30m and Trinity Mirror just over £100m – but their debts are holding them down.
“They are having to pull as much cash as possible out of their businesses to service those debts – which is in turn causing those businesses long-term damage.
‘They have futures as news business brokers, providing print, back office and technology services to the industry – but I believe a way of returning titles to local ownership is required.”
Using the analogy of the professional football clubs outside the UK Premiership, which are largely supported by local businesses, he said: ‘Those business people tend to believe often for vanity purposes, that it is good for their home town to have a high profile football club.”
He added:’The case must be made for the return of the locally owned news business, supported by local enterprises, so that local engagement is maximised. It is good that towns and cities have their own newspapers.”
As for Northcliffe, the fourth of the big four regional press publishers, he said that its parent company Daily Mail and General Trust ‘must decide whether it is in or out”.
He said: ‘Its Northcliffe division has made handsome profits for it for 90 years and propped up its Daily Mail for decades. To be fair Northcliffe it is now be highly innovative in it approach to the market – but for DMGT it barely merits a mention in the annual report. DMGT could lead the way and find a home for these titles amongst local businesses.”
Outlining some of the factors which have led to the current crisis in UK regional newspaper publishing – a crisis which he noted is exemplified by the Johnston Press share price dropping from £4.50 in 2005 to 4.5p at present – he outlined some of the mistakes which he thinks publishers have made.
‘Giving all a newspaper’s output away for free on the web has been a disaster. The message that the internet would be the new rivers of gold was always falseâ€¦
‘Dreaming up new brands for newspaper websites has also been and continues to be, with a few exceptions, a disaster too. I can buy a Mars bar in a variety of forms, I can buy Fairy detergent in different styles – but if want to read the Leicester Mercury online I have to go to thisisleicestershire.com website and then struggle to be sure that it actually is the same brand that has been established for well over 125 years.”
And he said that the current crop of regional press bosses must take their share of the blame for the crisis in the industry.
He said: ‘The groups allowed distant ownership to become a problem, when careful management could easily have negated it.
“Senior executives have been viewed by their staffs, both senior and junior, as being too focused on one figure, the bottom line and not taking a more longer-term view. Even now, in this economic climate, there are some (not many I admit) news businesses making 30 per cent margins. No one I have spoken to understands how this will help the survival of brands in the future.”