2 Comments

Summary:

Last week, I gave online evidence to a Welsh Assembly committee’s inquiry in to the future of media.

Pierhead, Cardiff Bay
photo: Flickr / Geraint Rowland

Last week, I gave online evidence to a Welsh Assembly committee’s inquiry in to the future of media.

That very broad topic is being investigated by a cross-party group of just three members and a chair. They are concerned that ongoing cuts to the likes of Trinity Mirror’s Western Mail and to BBC Wales reduce coverage of Welsh politics, but they are also asking how new media might fill the gap.

The conclusion already reached by Plaid Cymru committee member Bethan Jenkins AM, before the committee is due to report in January, is the same one recommended to it by Western Mail chief reporter and regional NUJ chair Martin Shipton – that the Welsh Government should buy its publisher Media Wales from Trinity Mirror (LSE: TNI) for £10 million before handing it over to a workers’ cooperative.

But the suggestion has some spooked, even in a country so reliant on the state sector. Fellow committee member Peter Black says: “Such a concept conjures up images of Soviet Russia. We would see an end to objective reporting.”

What committee members really fear is that, through lack of visibility, their fledgling assembly will lose legitimacy. They fear the Western Mail, which is not Wales’ highest-circulating paper but calls itself “the national newspaper of Wales” by virtue of being read by Cardiff’s intelligentsia, might go weekly or cease to exist.

Still, the committee, which is hearing almost exclusively from industry folk west of the Severn, appears not to have asked Trinity Mirror in Canary Wharf to comment on its fears, and only on Thursday was it told by Media Wales’ local managing director that their notions were merely hypothetical.

Committee members have remarked how Trinity Mirror has cut staffing but retained profit and failed to reinvest. What is the truth? I dug through 16 years of accounts to summarise…

Circulation has fallen hard. And so it has for newspapers around the western world.

Staff levels are currently a third their size a decade ago. With better technology and with newsroom integration of several related titles, it is certainly conceivable to do more with fewer – but the NUJ’s Shipton believes levels are falling toward a threshold below which it would make producing news difficult.

Revenue decline started in 2006 – that is before the great advertising crash of 2008, and around the same time broadband adoption boomed in the UK. The WalesOnline website replaced icWales in 2008.

Outgoings have remained fairly consistent. Cost cuts have been marginal and have lagged behind a more pronounced revenue decline, only accelerating in the last year.

After falling horribly, profit has stabilised or returned slightly in the last year.

With the reduced staffing, profit per employee shot up last year.

  1. An easier and less time consuming way to approach the analysis might be:

                             2000      2010   change

    Circulation          54.4k     28.6k    -48%

    Revenue              £46m    £32m   -30%
    (real)                   £60m    £32m   -47%

    Operating profit    £7.0m    £5.8m  
    Return on sales    15%      18%

    Heads                  974       321      -67%
    Sales / head        £62k   £101k      +62%

    Summary points:

    – Real revenues have declined in line with circulation over ten year period
    – Paper is still generating decent profit margins which are 3 percentage points higher than 2000
    – Business has been downsized with a two thirds reduction in headcount to reflect drop in circulation and to maintain profit margin

    Share
  2. Duncan Higgitt Monday, December 5, 2011

    “The conclusion already reached by Plaid Cymru committee member Bethan Jenkins AM, before the committee is due to report in January, is the same one recommended to it by Western Mail chief reporter and regional NUJ chair Martin Shipton – that the Welsh Government should buy its publisher Media Wales from Trinity Mirror (LSE: TNI) for £10 million before handing it over to a workers’ cooperative.”

    This is incorrect. This remains still very much an idea, not a conclusion, and it is made clear in the piece – referenced here – that the maths are in no way scientific. It also makes clear that any discussion of this kind is moot without buy-in from Trinity Mirror. The point of the piece was to kickstart a debate, not offer a panacea.

    Share

Comments have been disabled for this post