Whip-round for the News Letter & Derry Journal?

Things not looking so good at the News Letter, Derry Journal et al. Looks like the humble sub (noble fellow, Balls! 30.11) is for the high jump. Though numbers of precisely how many jobs will be going ranges from 11 to 31.

Well, just for clarity we’re quite sure Johnston Press’ stable of newspapers would report the correct figure. So what is it, 11 jobs or 31 jobs? According to the Derry Journal:

The move will result in a net loss of 8.5 positions in the newspaper group.

Oh. Okay. So that’s clear then.

The National Union of Journalists website rightly reports that Johnston Press is maximising profits by sacrificing quality. The Union also notes that:

Last year Johnston Press made £178 million operating profits, which meant its profit margin was at 27 per cent, far in excess of what is expected by most commercial organisations.

Things not so rosey NUJ - profits as a percentage of turnover fell to below 30% for the first time since 2003. And last year might well have produced good numbers but the economy went into recession this year with the real damage coming in Q4 of this year.

And it’s not as though Johnston Press failed to update the market on its balance sheet during this rocky period. The more up to date figures the NUJ might have used were published on the Johnston Press website on 12.11.

• Total advertising revenues down 15.5% - print advertising was down by 17.4%
• Overall performance has deteriorated due to further substantial declines in property advertising combined with significant falls in employment and display advertising
• In weeks 27-44, there were year-on-year declines in property of 48.4%, employment 32.1%, motors 24.3% and display 12.1% on a like-for-like and constant currency basis.
• Newspaper sales revenues after 44 weeks are slightly down on last year with circulations suffering
• The Group has been cutting back – to the tune of £7.6 million in the first 26 weeks of the year.

The statement added that:

Net debt at 1 November 2008 was £465 million, a reduction of £19 million from the balance at 30 June 2008. It is expected this will reduce again between now and the year-end. A further impact on the full year impairment reviews of the carrying value of the Group's intangible assets is inevitable as a consequence of the continued deterioration in advertising trends.

Given the challenging and deteriorating economic and operating environment, the Group is concentrating on managing its cost base and reducing its debt levels, but would still expect to deliver an operating profit for the full year at the lower end of current market expectations.

Servicing such enormous debt and dealing with banks is problematic, but especially when the value of a company falls by a fifth overnight. So shareholders and banks need to see that the company is cutting costs. Sadly, that means hacking into hacks’ wages. The NUJ also has some strong words on that Johnston Press pay freeze.

It looks as though local titles will have to suffer some pain. Under Johnston Press ownership, that means job cuts, centralisation and a loss in quality. But Staff at Bobballs fears this may send the News Letter into a death spiral – how much more can it take without passing the tipping point of terminal failure in readership?

It would be unthinkable for there to be no Derry Journal in Derry and no Belfast News Letter in Belfast. Johnston Press is locked into more cuts - but these may be too much for such long-weary titles to bear.

Does anyone know of big money media consortia looking to snap up two of these islands' great newspapers? Just on the off chance.

PS. Earlier this month, Staff at Bobballs suspected the News Letter story pooling was evidence of financial straits (Balls! 05.12). And as much as we’d like to think we’re ‘Mystic Balls the Newspaper Prognosticator’, it appears NL story pooling has been going on much longer than we originally thought...but... erm... the conclusion was (inadvertently) right!! Right?!?!?