Newsquest must not use public funds to deliver profits
8 May 2019
The call by Newsquest bosses for a "substantial expansion" of the BBC Local Democracy Reporter (LRD) scheme and more public money spent on newspaper advertising was today criticised by the NUJ as the company also warned of more "robust cost control" in its operations.
A company strategic report in Newsquest's latest accounts said the business would continue to seek acquisitions to provide greater scale as it continued strong cash generation. Their magazines portfolio boosted earnings by 69 per cent and digital revenues were on a "rapid pace of growth", against the backdrop of declining print income.
The accounts, for the year to 31 December 2018, showed that the company made a paper profit, after tax of £94m, thanks in large measure to a £67m non-cash credit on its now closed defined benefit pension schemes which changed from RPI indexation to the lower CPI measure.
Worryingly, the company said: "The declines in print revenues outweigh the growth in digital revenues. The directors anticipate that this will be the case in the immediate future, necessitating continuing robust cost control and re-engineering of the business."
On the LDR and new Facebook Community Reporter schemes, Newsquest said it was "pleased" local journalism was benefiting but moaned that the scale of the initiatives - at about 5 per cent of editorial numbers - was not enough. The report added: "Our view is that a substantial expansion of an LDR type scheme and inclusion of the public interest benefits of newspaper advertising when selecting medias for public sector advertising offer the best value for money solutions to society."
The comments come as the accounts also reveal that chief executive Henry Faure Walker saw his pay package rise slightly to £543,000 (including pension payments) as directors additionally shared in a £273,000 "performance related" payment pot.
Chris Morley, NUJ Newsquest group chapel coordinator, said:
"The LDR scheme has been proved to be a success because of the professionalism and dynamism of the reporters who do the old fashioned graft in holding local authorities to account. Our members doing these jobs in the main enjoy the work the scheme requires of them but have reported local difficulties in the use they are sometimes put to and lack of support they get.
"With Newsquest's track record of savage cost-cutting and threat of more to come, we sincerely hope the call for an expansion of the LDR scheme and future cost-cutting are not in any way related.
"The use of any public funds has to come with responsibility and cannot be used to artificially prop up the declining profits of commercial companies such as Newsquest that are suppressing staff pay but keeping the boardroom gravy train chugging along as profits are exported to shareholders in the US."
Federica Bedendo, Newsquest chapel group MoC, said:
"It's nice to see Newsquest acknowledging the importance of public interest journalism, it's just a shame it is not willing to fund it properly. The LDR scheme is a brilliant initiative and LDRs have been a great addition to our newsrooms, but we must not let companies scrounge off the licence fee payer in order to look after their profits.
"Our newsrooms have been torn to pieces by cost-cutting policies, with the few journalists left juggling a huge workload once shared by double the staff. Those at the top are living in luxury while front-line workers often live with their parents or rely on a partner's income to afford to remain in their job.
"If Newsquest is so committed to journalism, then it should reconsider the wages of those at the top and start paying the hard-working journalists what they deserve for the great work they still manage to do despite their appalling working conditions."
The news comes as Gannett chief executive and president Bob Dickey finally stands down from the helm ahead of the company’s annual general meeting on Thursday 16 May. Dickey last year enjoyed a $5.2m total remuneration package. The group has also been subject since January to a bitterly fought hostile takeover bid from venture capital backed MNG Enterprises which will culminate with a shareholder vote on the company's efforts to install three director candidates on the Gannett board.