The Guardian Media Group today admitted its regional press operations have been making a loss for the past six months.
GMG Regional Media, which includes MEN Media and Surrey and Berkshire Media, says conditions in the regional press have worsened since the start of the current financial year in April.
The admission, contained in GMG’s full-yearly results published today, comes despite nearly 300 redundancies across the group earlier this year.
The cutbacks included centralising its weekly newspaper operations in Manchester and turning the Reading Post from a daily to twice-weekly publication.
“The past financial year was perhaps the most challenging in the history of the local and regional press,” says today’s company statement.
“The underlying problems of the sector are predominantly structural and can be traced back at least ten years, but were masked by a long period of economic growth. The onset of recession revealed the full impact of online disruption to the traditional business model of local and regional papers.”
The report revealed that GMG Regional Media’s operating profit declined from £14m in 2008 to £0.5m last year, on turnover of £94.5m, before going on to say that conditions have since got even worse.
“Since the end of the 2008/09 financial year, conditions within the regional press have, if anything, worsened. GMG Regional Media has now been making a monthly trading loss for more than six months,” said the statement.
“In order to remain viable as a business GMG Regional Media was forced to reduce costs substantially, leading to the announcement in March and April 2009 of nearly 300 redundancies and a wider reorganisation across its portfolio.
“GMG Regional Media will continue to review its operations as it seeks a sustainable future for its businesses and titles.
GMG chair Amelia Fawcett said: “2008/09 was a difficult year for most parts of the media industry, and our own group is not immune to the combined effects of recession and longer-term structural change.
“We will need to re-examine and reshape many of our existing business models if we are to continue to be successful.”
The group’s national division, Guardian News and Media, made an operating loss of £36m.
However chief executive Carolyn McCall said the group’s two joint ventures with Apax Partners – Trader Media Group and Emap – were delivering “substantial” profits.
A joint statement from the NUJ reps at MEN Media said: “At the Manchester Evening News and its weekly titles alone, more than 70 jobs have been axed and all our local newspaper offices have vanished.
“Our members in GMG Regional Media, including Surrey and Berkshire, have been asked to make huge sacrifices – is it too much to ask that CEO Mark Dodson sacrifice his bonus.
“He is taking a £47,000 bonus, bringing his salary to £309,000. That bonus could have paid the salaries of two weekly reporters. It could have avoided some of the compulsory redundancies on the MEN.”
Mr Dodson’s salary was £403,000 the previous year. No-one from GMG was available to comment on the NUJ’s statement.
Comments
Mr_Osato (31/07/2009 13:35:29)
Does this include the money pit that is Channel M? Does it include the loss-making radio division? Does it include the one-off cost of getting rid of some of your best and most experiences staff? I suspect the answer to at least the first of these questions is yes, with that alone enough to turn the negative into a positive.
Connor (31/07/2009 17:24:47)
When they say running at a loss, is that before or after the regionals have been stripped of the cash they have to give to prop up the Guardian which despite being so well-staffed is perhaps the dullest and most pointless publication going? The MEN is still packed with advertising, the Guardian supplements (MediaGuardian etc) are now devoid of any advertising. The problem isn’t the regionals, it’s the moneypit in London – oh, and as Mr Osato says, Channel M as well
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