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Regionals on the Edge

Neil Fowler spent a year at Oxford University looking at the decline and future of regional and local newspapers across the United Kingdom. Radical action, he argues, is needed if many are to have a future.

By Neil Fowler

The defining moment for me, when I really appreciated that the Leveson Inquiry had lost its way completely, was when Sun editor Dominic Mohan was quizzed about the presence of Page 3 girls in his newspaper.

Then I realised that the orchestra conducted by the good Lord was really continuing to play while the whole Titanic of our industry continued its seemingly unstoppable decline to its long predicted watery grave.

A few weeks before Mohan’s grilling, Leveson had been told in absolute clarity by Trinity Mirror chief executive Sly Bailey of the stressed financial position of her company.

Days before, the national division of her business announced that the best part of 25% of its journalists would be leaving, just as the Telegraph Group outlined more redundancies too. Yet Leveson did not see fit to recall anyone about those profound decisions and their implications for the future.

He may argue that his inquiry is just about the moral practice of certain aspects of print journalism, yet in the end, if there isn’t a news industry to be ethical about, we are somewhat missing the point.

The Milly Dowler affair was a new low in journalism but all this act of criminality has done is to divert time, money and, most importantly, policy thinking away from the real issue facing journalism in this country – and this is the current and future funding of the provision of general news, an issue that is magnified in the regional and local news sectors.


Having spoken to many both inside and outside those sectors during my research project, I have concluded that this position has been coming for a long time, over many decades, with some factors being outside the control of the industry, others issues having been very much self-inflicted.

Few people seemed to see what was coming along, or if they did, they chose to ignore it, perhaps feeling that nothing could knock them off their business perches with so many riches flowing in over the 1990s and early 2000s.

I don’t believe it is too late, though indecision over the coming months, and a lack of vision caused by focusing on Leveson, may have catastrophic effects.

The current coalition government has said it recognises the difficulties the regional and local press is facing.

It has said that it intends to change ownership regulations to make it easier for groups to buy, sell, and swap titles to enable some greater geographical grouping.

However, it failed at the first attempt with what should have been a logical, easy and straightforward decision when the Kent Messenger was rebuffed it its attempts last year to take over seven titles from Northcliffe. This deal would have been good for Kent, good for the industry and a sign that the government actually understood its dire position.

A matter of priority

The government, through culture secretary Jeremy Hunt and business secretary Vince Cable, must show that it understands that there is a crisis in the funding of general news in this country – specifically for regional dailies as well as the quality end of the national market and that this is the real media issue of our times.

Messrs Hunt and Cable should instigate the debate and do so as a matter of priority. The model of news being subsidised by advertising is broken and cannot be fixed, but more than just platitudes from our policy-makers is now required.

Consolidation and title swapping should be made easier, especially geographically. Plurality is a red herring with the competition for both advertising and comment created by the internet and should not be used to hold up further mergers. These changes will not necessarily produce vast savings – but will help. The industry should press this case as soon as possible – and the government should make the right signals too.

The industry should continue the bold moves instigated by Northcliffe at Lincoln, Scunthorpe, Torquay and Exeter (and followed by Trinity Mirror with the Liverpool Daily Post) in turning some of its daily titles to weekly production. Over the last year, it converted four of its daily titles to weeklies – on the back of a successful change to the Bath Chronicle four years ago. These are radical attempts to find solutions for the long-term and should be encouraged.

Readership, rather than sales and impressions, should become the new currency to sell to advertisers. In Canada, newspapers focus on NadBank, the agency that produces readership figures. ABC sales figures are very much second division.

The issue of debt

Moves should be made to help the three PLCs – Johnston Press and Trinity Mirror in this country and Gannet in the US – to have, in the words of the moment, an orderly default on their debts.

This is not to allow them off the hook in any way – or to forge a path for them to continue as they have been operating. But it is an acceptance for both the businesses themselves and those who own their debts that it is almost impossible for that debt ever to be paid off and to have any business of substance remaining.

Ashley Highfield, the new CEO at Johnston, has already said that attempts are being made to restructure its loans, but I can’t see that being enough.

All three are 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 capitalisation of around £30m and Trinity Mirror just over £100m. In March 2005, Trinity Mirror was in the FTSE 250 index with its shares at around £7.29. Since then, the index has grown by 40% yet Trinity Mirror shares have sunk by 93%.

They are pulling as much cash as possible out of their businesses, by very tight cost control (ie. job losses) to service their debts, which is in turn causing those businesses long-term damage. The companies may argue that they are still profitable and that they have strategies in place to pay off this debt but, as one analyst said to me, the City has lost interest in them.

A return to local

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. Here there is a very basic analogy with the 72 football clubs outside the Premiership that, in the main, are supported by groups of local business people. Those business people tend to believe, often for vanity purposes, that it is good for their hometown to have a high profile football club.

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 news providers. This recommendation is not at odds with further consolidation. Having news business brokers providing cost effective support services will be a necessity for re-localised enterprises.

And in the case of DMGT, it must decide whether it is in or out. Its Northcliffe division has made handsome profits for it for 90 years and propped up its Daily Mail for decades. To be fair, Northcliffe is now being highly innovative in its 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.

The government should include the recommendations of the recent Reuters Institute for the Study of Journalism report on the potential of charitable and trust ownership of newspapers in its forthcoming Communications Green Paper. This important piece of work sets out the case for a new way of looking at the funding of news and should become part of the agenda.

In this Green Paper, the government should also examine ways in which the tax system can be used to assist local entrepreneurs, business people and individuals to buy back into the ownership of local media.

Start charging for online

University media schools should move from their pre-occupations with the study of journalism to include much more of the study of the business of journalism. They should work more with their sibling business schools to help the industry find real solutions to its woes. I believe there is a gap in the market here ripe for filling.

The industry still has time to experiment, to try new models and be brave. There remains a demand for local and regional news and no one else can provide it with the same level of expertise and independence than the existing news businesses. It should work together more to share risk and results – what will work for one may well work for another.

Start charging for some online content – and hold your nerve. Ditch fancy website names and use your brands – their value is immense.

And it may be the time to restrict mass free distribution of titles. Competition law does not allow rival titles to co-operate but with the cost of newsprint, the move towards pick-up must be accelerated as well as the move back to some form of paywall.

There remains a level of local advertising that is available to traditional businesses. However, much of it is being scooped under the radar by local entrepreneurs and franchises that are developing solid advertising-driven glossy magazines delivered to highly targeted areas.

An intelligent debate

In all this, bloggers and members of the public will have their part to play, but the fundamental question remains: who will cover Hartlepool Magistrates’ Court on a wet Wednesday afternoon? It will not be a well-meaning amateur and has to be a professional journalist – the question is how will it be paid for?

Finally, let all of us in the industry have an intelligent and realistic debate about the real state of this business and how it got there. And let this debate be soon.

There’s an awful lot of scrutiny, human interest and fact about our localities that we risk losing if we don’t get this right.

Politicians and bankers have a role to play with the industry in getting this right for the future. This is a genuine societal issue – and society will lose if a route is not found through this current crisis.

This article is based on the lecture Neil gave in November at the end of his Guardian Research Fellowship.