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At midnight on Friday 16 November, the BBC first reported the news that Johnston Press, owners of the Eastbourne Herald, has gone into administration. The news had been made public by Johnston Press in a statement at 9:00pm.
Chief Executive David King, assured staff that the newspapers owned and run by the company, which includes the i newspaper, The Scotsman, The Yorkshire Post as well as 200 local titles including the Eastbourne Herald, will continue to be published.
The few journalists left working for the Eastbourne Herald may be left wondering this morning what future they have with the company.
On 12 October David King aimed to reassure the 2,141 staff that the business still has a “positive future”.
The decision to put the company up for sale followed the failure to come up with a refinancing package to pay off its £220m debt.
David King has now added, “there were offers for the whole group, as well as for some individual titles”.
“Each approach was examined carefully. Yet none of these offers, or combinations of offers, would have raised enough money to repay the £220m debt that we are obliged to settle in June 2019, nor did they allow the defined benefit pension scheme to remain attached to the company.”
His statement appears to scotch rumours that the Daily Mail Group is to buy the i newspaper, the jewel in the crown of Johnston Press assets.
The beleaguered Chief Executive said “none of the offers received delivered sufficient value”
An email to Johnston Press staff, which has been seen by the Guardian newspaper says ““our operations will continue uninterrupted and so it is important that you turn up for work as normal – your employment contract will be transferring to the new company and you will continue to be paid as normal”.
“The newspapers and websites will continue to be published as usual. As I have stressed on several occasions, our business is profitable with good margins. Our debt has constrained us.”
The calamity of the circumstances is buried within his statement with the instruction to staff, presumably including the journalists working for the Eastbourne Herald this morning, that they should turn up for work and that they would be paid as normal.
The ominous nature of what has been said will not have escaped the staff.
The company is to be de-listed from the stock exchange on Monday (19 November), making the shares worthless.
A ‘rescue plan’, which appears to have been released by the company overnight explains that in filing for administration the assets of Johnston Press will immediately be bought by its lenders.
The explanation suggests the move will “preserve jobs and stabilise the business”
The company has also said some staff “will see the value of their pensions affected”.
The company has said, “The group hopes that this transfer will be completed within the next 24 hours.”
The decision is being seen as an effort to reduce debt and secure new money for the business operations, which include 200 newspaper titles across the country, as well as accompanying websites.
The statement to staff also suggests, “we are very confident that this is not the end of the story, but the beginning of a new phase in which we work with the new owners of the group to give shape to a new future,”
David King explained that he intended to stay on as chief executive and said the rescue plan was better than “a lengthy and unpredictable administration process”.
Simon Montgomery, editor of the Pevensey Bay Journal, said “from a local point of view, the future of the Eastbourne Herald has now come into sharp focus.
“What is noticeably absent in the pages of the Eastbourne Herald is investigation by the newspaper. This is the result of the lack of investment in investigative journalism. Such endeavours are the lifeblood of any newspaper.
He said, “what is happening at Johnston Press is inevitable.
“The problem is not the teams of savvy hard working local journalists but the constraints put on staff by the corporate bodies that own these newspapers.
“The national press and regional press is breaking apart. This sad decline has been news for a number of years.
“Johnson Press going into administration is an example of a big tipping point.
“There have been months, in truth years, of speculation, about the future of Johnson Press.
“The web has radically changed the axis of news. People turn to their smartphones to browse the news. The news comes to them from their Facebook friends and Twitter followers, streamed every five minutes to their desktops.
“The press is going through the most radical change in the 300 year history of the newspaper industry in this country.
“What that history shows is that the delivery of the news is about giving people the opportunity to connect with the stories that matter to them.
He suggested that what might emerge in the process of administration with regard to Johnston Press is a new model of local journalism by some of the titles that serve tight knit communities across the country
He said “we could be seeing some of these small titles taken over by the staff themselves, something as an option for some Johnston Press titles that has already been mooted by a number of commentators.
“Media analyst and former Scottish Newspaper Society director Jim Chisholm suggested as a guest writer on the authoritative “Hold the FrontPage” the online journalist bible, that local intervention was a possibility, indicating that local co-operatives were proving to be successful community and specialist publishers”.
A subscription and readership model adopted by the Guardian newspaper has seen a million milestone this week.
Katherine Viner, editor-in-chief of the Guardian, said (12 November) “three and a half years ago, when I took over as editor-in-chief, we were faced with the urgent challenge of how to make the Guardian sustainable.
“The situation looked bleak across the media. Print advertising was in steep decline, and digital advertising growth was going almost entirely to Google and Facebook. News organisations everywhere were searching for answers to the challenge that they were being read more than ever before, but with fewer ways to cover costs. Month by month, more and more news outlets went behind a paywall.
“We realised we had to find a new way to fund Guardian journalism. The obvious answer was to go to you, our readers – at that time we had 150 million, and you have always had a special relationship with the Guardian, valuing our editorial independence, our commitment to investigative reporting, and our progressive viewpoint rooted in the facts.
“We wanted to give people the opportunity to contribute financially, in ways that worked for them, meaning that we could provide our readers – regardless of where they live, how much they earn or how they like to get their news – a way to support us that also tied in deeply with the liberal and progressive ethos on which the Guardian was founded.
“When we asked for your support, we weren’t sure whether it would work. Both friends and competitors were deeply sceptical for a long time, but you, our readers listened and responded. It was inspiring how many of you from more than 180 countries wanted to play a role in supporting the Guardian financially.
“To be able to announce today that we have received financial support from more than 1 million readers around the world in the last three years is such a significant step.
“This model of being funded by our readers through voluntary contributions, subscriptions to the Guardian, the Observer and Guardian Weekly, membership or as part of our patrons programme is working”.
Looking at what is happening with the tombstone of the Johnson Press and their inscription on the Eastbourne Herald this weekend is clearly marking a benchmark moment in the 300 year history of the local press in this country.
This is sad for all the wrong reasons.
The newspaper has a proud history, published on Fridays and published since 1865.
Local journalism is vital to local communities. Authority needs to be held to account, local newspapers are the place in print where questions about these matters can be investigated, discussed and debated.
What is interesting about the Guardian subscription and readership model is the sustainability of the enterprise. The Guardian looks set to break even again by May 2019.
An adoption of this kind of model on a local level with some of the Johnston Press titles that look set to fall by the wayside is an interesting possibility.
Disgruntled journalists are already commenting on the Hold The Front page newfeed about the story that Johnston Press has gone into administration.
One ex-employee said “they made me redundant end of sep I want to know what’s happening with all my money I have paid into my pension at the highest rate at £90 per month I’m fuming”.
Another comment suggested “the scumbags know exactly what they are doing. Selling to a hedge fund in USA. Keeping themselves in. High paid jobs and to hell with staff and pension fund holders”.
Simon Montgomery said “the corporate bodies that own much of the press at present are the last people in the world to wake up and smell the coffee, roll over and tell the people the news.
“The campaigning function of the local press needs to be re-established as the engine room in the production of newspapers.
“This is the power and the glory of the local press.
“This was true in 1745, with the birth of the first newspaper in Sussex, and this is true today in 2018″.
After the midnight in the oasis moment of the press release last night that saw Johnson Press enter administration, we wait to see what will happen next at a local level.
The Eastbourne Herald will be published next Friday, but for how much longer remains to be seen.
What is possible to envisage is that some local newspapers in the country may begin to emerge that are based on the kind of readership and subscription model adopted by the Guardian newspaper.
The Scotsman was founded in 1817 as a radical political paper. The Guardian was founded in 1822 following the Peterloo Massacre of 1819.
These currents also shape the foundation of local newspapers. The first weekly newspaper in the county was the Sussex Weekly Advertiser (1745). The newspaper was known as a republican paper, against aristocratic privilege. The editor was William Lee a member of the Lewes debating society, and a friend of Thomas Paine.
These kinds of foundation have been made for 300 years in this country. These trace blood lines are fundamentally important both to the launch of each newspaper but also to their continuing story.
Simon Montgomery suggested “a newspaper to work must have a perspective, a set of values and an identity. That is why people buy newspapers and in many cases, the same newspaper. They see something of themselves in the stories.
Perhaps, given the state of the country this weekend, with what is happening with the Brexit crisis which is being described as the worst scenario for the country since the Suez crisis of 1956, there is an argument to be put that there is a reference point here for local newspapers.
Many local newspapers emerge at times of great crisis in the country.
In the Digital Age, with so much at stake with the news, and print journalism in apparent terminal decline, there would be no surprise to see some new kinds of local newspaper emerging.
Amongst those new newspapers might be a few of the titles from the 200 local Johnson Press ‘group’, saved from falling by the wayside by local enterprises adopting some kind of subscription and readership model.
Johnston Press, the 251-year-old company, is now controlled today by the largest bondholder, a New York hedge fund, GoldenTree Asset Management.
What is at least clear in this corporate chaos is that whatever happens next, this control, by a New York hedge fund, has nothing at all to do with the future of the local press in this country.
