Johnston Press: the story so far
23 November 2018
Last Friday evening, staff at Johnston Press received a text and email telling them that the newspaper group was being sold to its bond holders in a pre-pack administration deal and that the company’s defined-benefit pension scheme would be ditched. The new company is called JPIMedia Ltd.
This week the union, politicians and the Pension Protection Fund have been grappling with the fall-out. Johnston Press (JP) announced on 11 October that it was putting itself up for sale because it was unable to meet its £220m debts, which were due to be called in, saying it preferred to sell all its 200 titles. Rumours circulated that the Daily Mail’s owner DMGT was interested in buying the i, its successful acquisition from the Evening Standard and Independent owner, Evgeny Lebedev.
However, it was bought by a consortium of lenders to which the newspaper group owed money, led by American hedge fund, GoldenTree, and JP's David King remains as chief executive officer. These bond holders agreed to cut the £220m debt to £85m, put in £35 million in new cash and ditched Johnston Press’s defined pension benefit scheme, already running a £40.7m deficit, which will now go into the Pension Protection Fund.
The NUJ held an early meeting with management to discuss the future of the company and express the concerns of members now transferred to the new group - particularly over the future strategy and desperately-needed investment in staffing levels and pay. Union officials worked with the NUJ’s group chapel to raise questions and a virtual group for ex-staff affected by the hiving off of the pension scheme has been established.
On Monday, Tom Watson, shadow culture minister, put an urgent question (one which demands the minister responsible answer it the same day) to Jeremy Wright, Culture Secretary, on the future of the regional newspaper group whose titles include The Scotsman, The Yorkshire Post, Belfast News Letter and The Sheffield Star.
The NUJ then quickly briefed MPs and the Culture Secretary was later forced to clarify his statement to Parliament, following information supplied by the NUJ, confirming that the pensions of thousands of ex-JP staff would be damaged by the plan to add the scheme to the Pension Protection Fund.
Frank Field MP, chairman of the backbench work and pensions select committee, said he would take up the issue with the pensions regulator and demanded that the new owners explain how they acquired the business without taking responsibility for its pension scheme. Lesley Laird, shadow secretary of state for Scotland has requested an urgent meeting with JPIMedia's management.
The week ended with a report by Alix Partners, JP's administrator, which revealed the value of the Scottish titles, The Scotsman, Scotland on Sunday and Edinburgh Evening News newspapers and the Scotsman.com website had collapsed from £160m to £4m.
The company paid £160m to buy the Scottish newspaper group from the Telegraph’s owners, the Barclay brothers, in 2005. The creditor, also valued the i, acquired for £24m in 2016, at £70m. The report valued the offer made by the buy-out consortium as JPIMedia Group at £181m. A bid of between £140m and £150m had been made for the group and various bids were made for titles part of the group.
The newly-named JPIMedia NUJ group chapel will meet on Monday.
Former JP staff who are NUJ members in the defined benefit pension scheme can be added to our virtual group by emailing firstname.lastname@example.org to request it.