As seven regional editors prepare to take the stand at the ongoing inquiry into press standards tomorrow, Ms Bailey has painted a bleak picture of the industry’s prospects.
She began her verbal evidence yesterday by revealing that the company now publishes 20 fewer local newspapers – 140 – than the figure she originally gave the inquiry in her written evidence.
Responding to a question from Lord Justice Leveson about the difficulties facing regional newspapers, she said the pressures over the past five years had been “intense” with recruitment advertising revenues hit hardest.
“As we’ve seen a worsening of the economy pretty much since 2007, the category that’s been hit hardest, which is our highest yielding category which really supports our news-gathering activities, is recruitment advertising.
“So at the peak, we had around £150m recruitment advertising supporting our titles, and last year we had less than £20m.
“And when you’re facing that happening to a business, then you have to reduce your costs effectively and quickly to ensure that you have a business and that you can come out the other side of that.
“That has been the primary issue, it’s almost like a falling knife that’s been getting sharper on the way down as we have gone through the cycle and we’re bumping along the bottom but it’s yet to improve.”
Ms Bailey also spoke of her concern about regulatory obstacles on local press mergers, accusing the authorities of using “very narrow definitions of print markets.”
“We are competing for readers’ eyeballs and advertising revenue in a much broader sense than we have ever done before. So the BBC online locally is a big competitor. Google will be a competitor. Rightmove will be a competitor, because that’s just simply what’s happened to our business.
“I do fear that that’s still not well enough and properly understood. And that’s the biggest thing that could hamper, that should consolidation be in the interests of our shareholders, the concern would be that that wouldn’t be allowed to happen.”
“We saw it demonstrated only a couple of months ago with the Kent Messenger Group unable to purchase the titles from Northcliffe that they wished to, and after that we saw a number of title closures, which cannot be a good thing.”