The Irish Newspaper Industry


#1

Anyone any thoughts as to the direction of the Irish newspaper industry?

Independent News & Media have until late June to refinance their bond. Denis O’Brien says that it is less than 50-50 likely that IN&M will refinance the bond. What happens to IN&M if they do not refinance the bond? with another 500 million to refinance later this year, is IN&M heading for the waste paper basket?

What I also don’t understand is Denis O’Brien is saying that they will not hold on to loss making divisions but yet The Sunday Tribune is heavily loss making. What gives? Why are they still investing in this basket case?

With even The Irish Times loosing money, will the Irish Newspaper industry head the US Newspaper industry?


#2

I believe that the Sunday Tribune is financed as a measure against the Sunday Times gaining market share in Ireland. Its hard to see how they can continue to finance it if margins are further squeezed.

As for newspapers in Ireland, some are gonna die, others may survive but probably serving a much smaller market. The internet has been readily available for well over 10 years now, the newspaper business had ample time to figure out that things were changing and to act accordingly. The newspaper industry is losing its relevance.


#3

The dead tree press will be consigned to history.


#4

Earth: … aaahhhhh


#5

at the moment New Zealand has an interesting media balance between internet and print. the NZ Herald (the indo of NZ) is the traditional print and stuff.co.nz it the online only news site. Stuff does everything the Herald does, which makes me wonder why that hasn’t happened here yet. will it take the death of the times or the trib to make it happen?


#6

:unamused:

Rupert Murdoch has said he will start charging for online access to his publications and the Irish Times already charges what I consider to be an astronomical price for access to its archives.

If Irish newspapers were to have a viable, useful online service, then they will need to up their game. The Star has no online presence at all - Murdoch proposes this for some of his tabloid titles, and the Indo site is pretty awful - slow and messy, though its archive is accessible. The Examiner also has a poor online facility.

Local papers seem to be seeing an upturn in advertising, and sales seem to be relatively steady. There are an increasing number of freesheets - which is a handy way of keeping the paper and decimating the staff and can presage the closure of titles. People like a local newspaper because they like the local notes and particularly the photos and cutting back on snappers has been the deathknell of solid papers - the Offaly Independent is one such. More and more journos are being asked in local papers to take pics themselve and they’re not happy about it, any more than the photographers who are losing their jobs as a result.


#7

My view is Dennis O’Brien is playing hard ball with the bond holders and the banks. What I think will happen is that there will be a rights issue underwritten by O’Brien and the O’Reilly family (if they have any cash left). Bond holders will be given equity or warrants to keep them sweet.

Taylor Wimpey are raising £510M, DSG (Dixons) £310M so say €100M for Independent shouldn’t be out of the question

If Carlos Slim really is a shareholder he can afford to take up his rights! I repurchased some Indos after the Armistice, a high risk trade, so I kept it small.

You can see O’Brien’s hand in action already, the indefensible 17 person board is down to a manageable 10! While it is nice to have the ex-Prime Minister of the 2nd biggest country in the world as a director, it’s one of the few places in the world Independent have NO interests! :laughing: The London Indo will most likely be shut, or all but outsourced. Despite protestations about it and the flabby but worthy board not being the Chairman’s vanity projects, that is how I saw them.

The years of lucrative Irish property and job advertising hid the flaws in the group. The tide is out now. In 2008 the 4 O’Reillys on the board then only cost the group circa €2.5M, down from €3.5M in 2007, that could pay a bit of interest!!

IIRC Martin Naughton underwrote a rights issue for the Tribune in the 1990s, his daughter Fiona was then the distribution manager for the paper. Not sure if he has any holding now, Indo couldn’t raise their stake at the time. It is a candidate for the chop, any pinsters who can’t bear a Sunday without the Tribune who still have a tenner left after the weekend should express their interest to Mr O’Brien here communicorp.ie/contactus.php

That the printed newspaper business is in almost terminal decline is unquestionable, but it can still be run for cash and can still service copious amounts of debt. Managing the decline is what’s needed.

Kate, I totally agree with you about local papers needing the local notes and photos but you said

Where did you see that? :confused:

Johnston Press (owners of Limerick Leader, The Nationalist & Munster Advertiser, Tipperary Star , Leinster Leader, Kilkenny People, Leinster Express, Offaly Express, Longford Leader Leitrim Observer Dundalk Democrat, and The Tallaght Echo) said on 13/5/09

johnstonpress.co.uk/jpplc/me … sp?ref=115

“Over the 19 weeks to 9 May 2009, total advertising revenues were down 34.4% compared to the same period last year.” This includes the UK, but Ireland is a big part of it.

'Whilst our market remains fragile, we have seen some stability in advertising revenue over recent weeks” A comment on the Irish market


#8

I didn’t see it but heard it from the editors of two local newspapers (not local to me, as it happens). Ad revenues are down on last year, but up on the earlier part of this year.

Any informed speculation on what will happen to Johnston Press, McContrarian?


#9

The Irish Times isn’t loss making.

I also think it’s mistaken to think that the internet is going to kill the newspaper industry. No doubt that the recession has squeezed the market and the more vulnerable titles will go to the wall, but for the foreseeable future there will always be a market for print media.

Another thing, free online content isn’t going to last forever. I mean why should we expect that professionally written articles to be distributed to us for nothing?


#10

Thanks for the update Kate. Johnston Press should survive, well really limp along, they raised £212M from a rights issue and £42M from a new Malaysian sugar daddy. They were carrying £700M of debt from their over expansion in previous years. In the previous link they said that the offers for their Irish assets were so derisory that they will hold on to them. The cost grinders are running the show so I doubt if a bank will put them to the knife. Johnston Press have massive economies of scale.

I was wondering how the locals papers might manage. Take the Roscommon Champion abc-ireland.ie/pdf/abcreports/report_ioi.pdf on page 9, I know nothing about this paper but let’s take it as an example. Over the last year weekly sales have fallen from 9,185 to 8,737 a drop of 4.9%.

If they got to keep €1 per paper from circulation after retailers and distributors (I doubt that much) or even €0.75 per copy their turnover would be:

8737 x €1 = 8,737 x 52 weeks = €454k
8737 x €0.75 = 6,552 x 52 weeks = €340k

(I think I am really over estimating circulation revenue as equally below I have no idea of advertising)

A guess at costs: wages; editor €50k, senior journalist €40k, 2 juniors (waiting to get a job on a national paper) at €25k each, admin/ad sales €20k, accounts/ad sales €25k, 2 printers at €30k, total cost of €245k + 10.75% employers PSRI = €271k (no pension contribution assumed). On the second assumption above that leaves €70k to pay for newsprint, rent, rates, electricity, insurance, heating, software, phones, bank charges, etc and any return to the providers’ of capital

But the unknown is how much advertising is generated, particularly now versus CT times. I know of one local paper that was caught for €50,000 from an estate agent that went bust. I won’t like to be making next year’s budget for a local paper.

If the local newspapers did not expand their fixed costs based on revenue from 2005-2007 they can survive. Or if you remember the newspaper from the Witches of Eastwick :laughing: where the husband and wife team did everything, that’s a model of the future of local newspapers.


#11

the freebie paper like the advertiser seems to be doing okay, i’d imagine at this time businesses would prefer that their message gets through every door.


#12

The Irish Times is in financial trouble …imprudent investments both Myhome.ie (bought at the absolute top of the market and proof that the Irish Times started believing the rubbish they were printing about the property market) and the free morning rag handed out in town.

In my view the MD has serious questions to answer and should seriously consider her position having put the Irish Times in this perilous position.

As regards the rubbish recently printed about how the Irish prefer printed media etc. this is a reflection of the lack of broadband take up / coverage in this country ( if you don’t have broadband the Irish Times website is tediously slow).
One should also bear in mind that the Irish Times did try to charge people for access and people stopped using it therefore they had to relent !

If you really want to see a quality newspaper website try the New York Times one!


#13

The Irish Times Trust may have invested their cash poorly, but they’re financially sound. They’re in profit and don’t have the insane debt burden that The Indo has.

You can view their accounts here


#14

Let’s hope they take the same attitude to their archive - I could get two and half copies of the weekly New Yorker delivered to my door for the price of it.

Not much kudos to the ‘paper of record’ that leaves us to rely on the Indo for accounts of events that happened more than a year ago.


#15

That’s the model of the distant past, I hope :slight_smile: - have you read about Stephen King’s high school paper? In On Writing - Hilarious adventures.

Maybe that’s what we need - some great independent spirit to crank out countless slightly sideways photocopies of anarchic writings for the broadbandless…

A lot of local papers are getting their editorial staff to do their typesetting and copy-writing and editing.

Or else they’re going down the road of the Topic newspapers and not bothering with editing at all - recently saw Edenderry incorrectly spelled on the front page headline.


#16

The accounts you refer to are for year end 31/12/07 …the full effect of the disastrous investments are not factored into these accounts!

It is a fact that Maeve O’Donovan has made **appalling bad investment calls **whilst at the same time paying herself and the editor packages of close to €500,00 each.

She should resign forthwith and apologise to her staff and all those who have had to be made redundant


#17

Or indeed in the IT…


#18

The accounts you refer to are for year end 31/12/07 …the full effect of the disastrous investments are not factored into these accounts!

It is a fact that Maeve O’Donovan has made appalling bad investment calls whilst at the same time paying herself and the editor packages of close to €500,00 each.

She should resign forthwith and apologise to her staff and all those who have had to be made redundant!

Another thing the Irish Times has yet to explain is its pricing policy for ROI…
The RRP of the Irish Times is €1.80 to €2 on Saturday yet in the North is retails at £1 sterling (even allowing for VAT applied to newspapers here it is excessive profit taking or as the Irish Times would describe it an example of “rip off Ireland”


#19

Myhome.ie was bought in 2006 and judging by those accounts, it was paid for using mostly cash (probably from the sale of the D’Olier St premises). It was indeed a terrible investment decision and it is indeed a scandal that management are paying themselves so much. There is no evidence to suggest that the Irish Times is in trouble though.


#20

Another of Maeve Donovans inspired investments has proved to disastrous!
The “Gloss” magazine will now cease to be sold in its own right through newsagents etc. but will now appear as a supplement with the Irish Times periodically.

Like the public service it appears that one can in the Irish Times be unanswerable for appalling investments unlike the private sector were she would have been given the flick a long time!

Another thing the Irish Times has yet to explain is its pricing policy for ROI…
The RRP of the Irish Times is €1.80 to €2 on Saturday yet in the North is retails at £1 sterling (even allowing for VAT applied to newspapers here it is excessive profit taking or as the Irish Times would describe it an example of “rip off Ireland”