Welsh Assembly told: 'Trinity Mirror profits not reinvested'

Trinity Mirror management have ‘persisently refused’ to discuss their strategy with the NUJ on a national level, a Western Mail journalist and union father of chapel has told the Welsh assembly.

Chief reporter Martin Shipton was giving evidence to the assembly’s media sub-committee this morning on the problems faced by the Welsh press, in which Trinity Mirror is the dominant player.

The committee said it was concerned by recent job cuts at the publisher’s converged Media Wales newsroom, which publishes the Western Mail, South Wales Echo, Wales on Sunday and a series of local weekly papers.

Assembly members have also expressed concern about the merger of Trinity Mirror’s south Wales business with its north Wales and north-west division – a move that has led to the redundancy of Media Wales managing director Keith Dye after 24 years.

Shipton, the NUJ father of chapel at Media Wales, said the union had a “pretty good relationship” with local management – but said it was impossible to negotiate with executives higher up the company, where many of the decisions were being made.

“The difficulty we have is we cannot get to those people who are making strategic decisions,” he told the Welsh assembly committee.

“We would like to be able to have direct talks with the people who are making these decisions in London but they have persistently refused.”

He added: “We would like to work with the Trinity Mirror board – they should be engaging with us.

“I wish they would get away from this habit they have of passing everything down the line to local management.”

Profit margins

In his written submission to the committee, Shipton provided the turnover and profit figures for the south Wales papers since 2003, based on accounts lodged at Companies House.

They reveal that the publisher has consistently made between £50m and £55m in revenue each year, with profits of between £15m and £21m.

In 2005, the Welsh newspapers operated at a 38.2 per cent profit margin. In 2007, the margin was 30.7 per cent.

“They have been making pretty high profits,” Shipton said.

“I think that if there were any question of giving a subsidy to Trinity Mirror [an option being considered by MPs] one would have to look carefully at the financial position of the group and any plans it may have for the future.”

Shipton also said he felt it was inappropriate that Trinity Mirror shareholders should be paid dividends while staff are losing their jobs.

“We would prefer it if we changed their investment strategy,” he added. “We are not happy that for quite a number of years they have taken dividends. We think that is excessive.”

Andy Williams, a research associate at Cardiff University, said nowhere near enough of the money made by Trinity Mirror was being reinvested in the core product – “quality news journalism”.

He told the committee: “In part at least, this crisis in the newspaper market in Wales is the result of more than a decade of implementing an unsustainable business model – a mini-max business model which aims to minimise costs and maximise profits.

“There is no viable business model for online news – it just doesn’t exist yet. Trinty Mirror’s probably one of the worst culprits – but they’re all in the same boat.”

‘We intend to remain profitable’

Media Wales editorial director Alan Edmunds defended the merger with Trinity Mirror’s titles in the north-west of England – and said changes need to be made to keep the business profitable.

“All decisions we take now are based on the economic climate and also the huge change in media consumption,” he told the assembly.

“Costs are up and revenues are falling. We intend to remain profitable. There is no shame in that. We need to invest in for the future.”

He said it made sense for Trinity Mirror’s south and north Wales title to come under one single managing director.

“The changes will fundamentally enhance our ability to provide quality news coverage around Wales,” he said.

“We need to secure a thriving future for local papers. This decision was made on business sense, so that papers have a future in print and online. We need to be able to invest.”

Edmunds added: “In Wales what you’re seeing is a company responding to economic change and the changes in the mediamarket place. We are responding in a strategic and productive way.”

He also revealed that the publisher was close to setting up a network of “drop-in centres” that will allow journalists, who are all based in a central newsroom in Cardiff, to meet the local communities they serve.

“People can still interact with papers locally,” he said. “The drop-in centres will allow journalists to meet up with readers. We’re very close to setting that up.”

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