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Tackling the headwinds

The press has a long list of challenges, from Section 40 to Google and Facebook hoovering up all the digital ad spend. Ashley Highfield tells Ray Snoddy how the News Media Association is working to tackle those challenges.

By Ray Snoddy

Tackling the headwinds

When the Newspaper Society merged with the Newspaper Publishers’ Association more than two years ago, it was hardly a big deal. The big surprise for some was that in a beleaguered industry, the trade body for local and regional newspapers and its national newspaper equivalent hadn’t come together years ago to tackle the many common threats the industry faces.

Had the mighty nationals been a bit sniffy about communing with their lowly country cousins?

The barriers, according to Ashley Highfield, chairman of the united News Media Association, and chief executive of Johnston Press, were much more about the locals wanting to keep their distance from the political stridency and sensationalism of some of the nationals. And then there was phone-hacking and payments to police and public officials – alien territory for the locals and one they didn’t want to be associated with.

Such views are already history.

“I think now we are all sat around the table with many common agenda items, it does seem surprising that we didn’t do this before. I think everyone has grown up to the fact that we are better together,” says the Johnston Press executive who now also has a small foot in the “nationals” camp with the i newspaper.

The list of common agenda items is formidable and includes everything from fake news to Section 40 of the Crime and Courts Act and the Investigatory Powers Act – the so-called Snooper’s Charter now before the European Court – and on to the economic impact of the social media giants such as Facebook and Google and the financial state of newspaper publishing as a whole.

Progress with the BBC

On all of those issues, the battles will be long drawn out, requiring sustained effort. But Highfield points to the newspaper industry’s new improved relationship with the BBC and the arrival of more than 150 new local reporters – rising to 200 – funded by the corporation as one of the NMA’s more tangible achievements.

The tendering process on who will operate the groups of new regional reporters around the country will begin in the summer and the scheme is scheduled to be up and running by the autumn.

“It’s real progress. It’s the NMA which has held the ring on that and pushed it forward,” says Highfield who worked personally on the agreement with Henry Faure Walker, chief executive of Newsquest, and Simon Fox, chief executive of Trinity Mirror.

“We took the brief from the NMA and went ahead in lockstep and negotiated with the BBC from the Tony Hall (BBC director-general Lord hall) level down. There was no opportunity to divide and rule and they knew we were serious,” the NMA chairman says.

Highfield rejects the cynical view that 200 new local reporters funded by the BBC could simply allow publishers to cut their own staff numbers.

“We have to demonstrate that we haven’t just moved someone across in order to get the funding from the BBC,” he emphasises.

The new relationship also includes the BBC funding a new local data journalism hub at the rate of £1 million a year – a hub that will take on three new trainee data journalists every quarter.

Overall agreements also cover local newspapers having access to all of the BBC’s video news.

“It’s a major step forward and we have moved the debate from one that was very adversarial to one where we are actually working together to the point where we have agreed a joint audit of how much regional news the BBC puts on its sites,” Highfield argues.

Fake news

The NMA chairman is also encouraged by how the industry is co-ordinating its approach on the issue of fake news – where there is a clear opportunity for publishers to emphasise the importance of providing news that is validated and trusted compared with all the rest.

“When the NMA actually pulls together, we can actually change the language of the industry,” Highfield believes.

One of the options being looked at is a system of kite-marking that can be used to signal high quality news.

“The government is very supportive and it’s very interesting how vocal they are being and that’s because we the industry have got our ducks in a row on this,” Highfield argues.

Indeed, at a recent Voice of the Viewer and Listener conference, Damian Collins, who chairs the House of Commons Culture, Media and Sport Select Committee, made clear his support for a kite-marking system as part of the move against fake news.

Collins also made it clear he did not think the press should face the additional burden of Section 40 under which newspapers could win a libel case but still end up paying for the costs of all concerned. The issue is due to be resolved by Culture Secretary Karen Bradley after the general election.

On fake news, the NMA, in line with the rest of the publishing industry, has accused the online platforms of fuelling the rise of fake news while at the same time undermining the finances of the providers of trustworthy news.

Unlevel playing field

The NMA, in particular, has urged both politicians and regulators to pay more attention to the threat Google and Facebook poses to the sustainability of news production in the UK.

The broader argument for Highfield is that the existing publishing industry is well regulated in the shape of IPSO while the people who are making all of the incremental money “are in an unregulated wasteland”.

The important point, he believes, “is that of all the news content created in the UK, 58 per cent of it is created by news publishers and yet we get something like 10 per cent of the incremental dollars and Google and Facebook are getting 90 per cent.”

An integrated approach to the problem at both the industry and political level, Highfield hopes, could lead to a more equitable settlement and one that would involve greater transparency in the digital advertising supply chain of the social media giants.

The general election campaign should also highlight the importance of trustworthy rather than fake news. The issue will obviously be complicated by the dominance of Brexit and the strident backing Prime Minister Theresa May is likely to get from the national newspapers which passionately support the UK leaving the European Union.

So far as local newspapers are concerned, Highfield believes they will play a critical role in providing local communities with trusted news and advertising platforms in the run-up to the election.

The editor’s choice

“I personally will be the weakest media mogul in the industry,” says Highfield who will play no part in influencing who, if anyone, Johnston titles will support.

Each editor can decide to support any political party or none.

The i sticks to the facts and does not support any political cause.

During the Scottish referendum, The Scotsman, Highfield notes, came out in support of the union.

The new Scotsman editor Frank O’Donnell has decided against supporting any political party or cause and that equally will be respected.

The Johnston Press chief executive points to the different coverage of the death of former Prime Minister Margaret Thatcher in two group titles.

On its front page, the Sheffield Star quoted former Home Secretary David Blunkett saying: “I cannot forgive her for what she did to Sheffield.”

In Grantham – Lady Thatcher’s home town - the Grantham Journal, until recently a JP paper, launched a tribute website.

Whatever line they take politically, Highfield will be paying more attention this time to what his local reporters are finding on the ground – unlike the referendum campaign.

He admits to having been caught “in the London bubble” as journalists from Johnston Press local titles picked up the trend towards Brexit.

Whatever the outcome of the general election, Highfield, the chairman of the NMA has still a serious battle on his hands as Johnston Press tries to cope with what he calls “the headwinds” facing the entire newspaper industry which included the Brexit hit on the advertising market.

JP’s own headwinds

The potential headwinds for Johnston include: reports that the company’s largest shareholder, Crystal Amber, was unhappy about Johnston Press strategy – apparently now resolved, the fact that Rothschild has been called in to look at “strategic options” for the future of the company and the share price has been hovering around 16p giving a total market value of around only £17 million.

Highfield insists that Johnston Press is moving in the right direction and that the main purpose of the Rothschild review is likely to be a refinancing of £220 million in bonds which become due in 2019.

Following the sale of “non-core” titles in East Anglia and the Isle of Man, the JP executive insists there are no plans to sell other parts of the group.

JP debt was more than £400 million when Highfield took over six years ago and is now below £200 million and falling thanks to the sale of titles.

Sales and profits from the i, bought for £24 million last year, have been increasing – although the removal of 10,000 bulks means the circulation is around 280,000.

“We are playing to our strengths both as a scale player and provider of hyper-local advertising. A hairdresser in Preston, for example, can reach more than 20,000 people but also 55-year-old women in particular postcodes,” he notes.

The Yorkshire Post topped the regional circulation figures in terms of year-on-year change – down just 3.9 per cent at 25,178, while the News Letter in Belfast came sixth with a decline of 6.9 per cent.

“We are equal to our peers in the industry or even marginally better. We are all facing the same headwinds,” Highfield insists.

Results for 2016 showed underlying profits of £49.1 million giving profit margins of more than 22 per cent.

“Despite an industry-wide backdrop of significant downward pressure on revenues, the actions we have taken to pilot the business through this rapidly changing market and create the conditions from which to create growth are starting to bear fruit,” Ashley Highfield told shareholders.

And the endless battle against the headwinds at both the News Media Association and Johnston Press will continue.