Wednesday, 11 March 2009

Guardian, Visitor Owners Continued Financial Woes

With a staff freeze already in place at both the Lancaster Guardian and the Morecambe Visitor, there was more bad news for the local newspapers owner Johnston Press today when it announced a year-on-year drop in advertising revenue of more than 35% in the first months of 2009 as overall revenue fell by more than 12% last year.

The national Guardian reports the company, which also owns the Lancashire Evening Post, The Scotsman and the Yorkshire Post, has said it suffered the "greatest fall in revenue in its history", seeing revenues fall to £531.9m in 2008, a drop of 12.4% from the £607.5m it made the previous year, as advertising revenue in its UK businesses fell 16.8% in the UK and 22.6% in Ireland.

Costly regional acquisitions, including the purchase of the Scotsman, and the woes of the housing market have not helped the company: property advertising revenues in the UK dropped by 32.4% year on year to £54.3m.

Employment advertising also fell by 19.5% for the year to £82m and motor advertising is also down.

Johnston Press relies for much of its income on on local classified advertising and fully expects revenues to fall further, even though newspaper sales are fairly steady, down just 1% last year.

As we reported last month (see news story), the company has instituted a number of "cost reductions" which locally include moving the Lancaster Guardian and Morecambe Visitor's sub-editing to Blackpool and photographic resources to a central unit in Preston, after halving the numbers needed.

Nationally, the company has shed over 1100 jobs through both voluntary and compulsary redundancy, and even though it has reduced its overall debt, the Guardian notes it will have to renegotiate its debt facility with its banks in the coming year as current agreements are due to end in September 2010.

More cost savings look to be in the pipeline as the company looks to sell off its Irish newspaper titles and centralise aspects of its editorial operation across its UK businesses.

With the closure of Newsquest's Lancaster and Morecambe Citizen last year (see news story), this is all bad news for local people, with some fearing the Guardian and Visitor may yet merge to save even more money.

Some 53 local newspapers have closed in the last 13 months, according to a list compiled by media commentator Roy Greenslade, who noted back in The Guardian in January we are no longer being served with vital information about our communities as we see the "gradual diminution of the public service aspect of local newspapers." Sad times for local journalism...

BBC Report: Local Newspapers in Decline
(The BBC Trust rejected controversial plans to launch a £68m network of local news websites with video content last November. The plan was vigorously opposed by newspaper publishers, who argued that it could damage or kill off their own local online operations).

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