Sunday Business-PA deal 'template for the future'

Andrew Neil

The cost-cutting deal with the Press Association which has saved Sunday Business could be "a template for the future of newspapers", according to its publisher Andrew Neil. PA will provide all the paper’s editorial infrastructure from 6 January.

In the current economic climate, saving a loss-making title is little short of a miracle but if other newspapers follow suit, it could be bad news for journalists. Sunday Business will live on but with a vastly reduced staff – sub-editors, picture, art and production desks and IT will all be provided by PA. Only a nucleus of reporters and analysts concerned with the core content – business – will survive.

"It’s sad about the redundancies because the problem has never been the quality of the journalism," said Neil. "But the name of the game is to survive. If the deal does work, this could be a whole new way of producing newspapers – the template for the future, where newspaper companies concentrate on the editorial and outsource all the infrastructure."

The paper will close in its present format on 16 December and relaunch on 6 January from a new home, PA’s London HQ. In the meantime Neil and managing director Paul Woolfenden will enter into a 30-day consultation period with the 45 journalists on where the axe will fall. Every job, including that of editor Nils Pratley, will come under scrutiny. Staff will be paid up until the end of December.

The paper’s Business and Pleasure magazine will go, as its costs are more than four times its revenue. The Sunday Investor section survives but inside a new broadsheet section.

The Barclay brothers are sticking by their paper but plans to find financial partners or organise a management buyout have been dropped.

Associated Newspapers already distributes Sunday Business and the Telegraph Group organises its advertisements.

Immediately after staff were told the news on Tuesday, Neil told Press Gazette: "We’ve had to cut the cost base substantially. Job losses will be the price of saving the paper. The alternative is for everyone to lose their jobs and the paper to close. Because of the new cost base we will have to almost start from scratch. The paper was unsustainable on its own cost base – no matter who was running it.

"We will do everything we do right now on business and aim to do it even better. We’ll improve the analytical authority and commentary while at the same time building on our reputation for breaking scoops."

Woolfenden approached PA chairman Harry Roche, chief executive Paul Potts and managing director Stephen Brown with the suggestion a month ago. Neil said: "PA has been essential to the rescue. The cost of using its services is a fraction of using our own."

There will be increased use of PA content, but Neil is insistent the paper will have its own staff, supplemented by contract and freelance journalists.

Neil, whose contract with the Barclays runs for another year, said one of the reasons the brothers felt able to go on supporting the paper was because "the business plan for Scotsman Publications next year is very healthy.

"We’re going to make a lot of money even on very modest assumptions on ad revenue. We have now got that business in real good shape and it is going to generate substantial amounts of money next year."

by Jean Morgan

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