Sly Bailey’s TV Debut On Sky News: “We absolutely believe in the need for consolidation”

TRINITY Mirror really must be in trouble.
Why else would chief executive Sly Bailey agree to give her first ever TV
interview?

And she wasn’t even given top billing by
Jeff Randall Live, no, that went to Michael Grade from ITV, another company
gripped by share terror

Randall didn’t miss a trick pointing out
that it was Rupert Murdoch’s Sky News that had become the first to drag her
onto the small screen, managing to mention it not once but twice, no doubts to
cheers at The Sun.

It was, I’m told, to jeers in her own
newsrooms as she talked not of investing in good journalism and saving the
business, but of her record in cutting staff, costs with more consolidation
ahead.

Pursed lipped, her dwindling share price
superimposed on giant screens behind her, she opened her defence, saying: “I
think you can see from our numbers that, as a consumer facing media business,
absolutely fighting on the front line of this recession, we can’t defy the
gravity of the ad markets.

“But rather than focussing on what we can’t
do, what’s not in our control, what we are doing as a company is focussing
relentlessly on what we can do, and that’s two fold.

“The first thing is matching costs to
revenue.

“What I mean by that is a very aggressive
‘self-help’ package. We are closing titles if we can’t find a path to
profitability – relunctantly, I will say, but that’s what we are doing allowing
our management teams to focus on our stronger brands.

“We’ve cut head count as we’ve cut titles,
and we’ve put in place a pay freeze across 2009, so that’s about making sure we
can see our business through the downturn.

“But at the same time of course we do have
to continue to focus on the longer term, and as a media company that’s about
continuing to innovate, ah, eh, continuing to launch, um, and particularly we
think it’s important to modernize the very process of publishing, so we are
putting in new technology across the business, which is, ah, modernizing the
way we go about the business of newspaper publishing, uh, more efficient,
multi-platform publishing which meets the needs of our consumers, and of our
advertisers.

“That’s driving efficiencies, it’s lowering
costs across the business and, I think the important thing here is, uh, as
well, it is without detriment to quality.

“And that’s about positioning our business
for when we come out the other side of this recession so we are a better
business wu-whu-whu-whuu……”

JEFF: “You’ve been a very effective
cost-cutter, but I don’t see any growth. Where’s that coming from?

Sly: “Well, I think as I said, you know, we
are in recession and the advertising markets as you talked about with Michael
(Grade) earlier on, and you saw our numbers earlier in the year, we just can’t
fight against that.

“However, there are areas of growth in our
company. If you look at our digital growth, for instance, we now publish more
online brands than we do print brands, that’s quite deliberate so we are taking
our brands and our content across new platforms where uh, our consumers and
advertisers will, will want to be.

“27-per cent digital growth last year which
is certainly outpacing that of the industry, so if you look at our company,
they are absolutely areas of growth.”

JEFF: When you say digital growth are you
talking about revenues, or profits or viewers or what?

Sly: “I’m talking about revenue growth, and
I think that’s a really important thing because yes, we want audience growth
and our audience grew by about 40 per cent last year so we’re getting good
growth, but, you know, audience doesn’t pay the wages and what we have to do is
make sure we are generating revenue and we can convert that into profit.”

JEFF: So are you making money from your
internet operations, because very few newspapers are?

Sly: “Yup. I know, and absolutely we are
and I think that’s what sets us apart as a media company because we focused
very hard over the last few years on the business model of digital and, I
think, you know, it’s not difficult to generate audience and to generate users,
but if you can’t charge for content it’s actually much more difficult to, to,
to drive new revenues and make profit out of that.

“If you look at our regionals business,
almost 18 per cent of our profit last year came from digital so yes, we are one
of the few media companies that’s making profits out of digital.”

JEFF: In the end, the City doesn’t believe,
does it? It’s pricing your whole company at £60m, it’s nothing, they’re saying
it’s over. Why can’t you engender that confidence amongst professional
investors?

Sly: “Well I think, you know, I would take issue
with that because I think I’ve been out on the road since our results last week
talking to our investors.

“Number one, they understand what’s going
on in our industry, they know that we have a very clear plan, and they are very
supportive, um, of that plan.”

JEFF: Where’s is the bottom for the
newspaper industry? Is there a bottom, or is it facing oblivion?

Sly: “No, it’s absolutely not facing
oblivion. We believe in the future of newspapers, we have an absolute belief
in, in, our print brands, but alongside a growing, profitable digital business.

“Ad spend will come back and with that we
will see a return to health of the newspaper market, but continuing to focus on
taking our brands and our content across those new platforms and we have a
complimentary digital business that sits alongside our print brands is an
absolutely crucial part of our strategy, but don’t write off newspapers,
they’re not finished.

“You know, if you just look at the numbers,
114million newspapers are circulated every week uh, in this country.”

JEFF: What about regional titles? There
used to be thousands of them. Many have gone, we’re seeing consolidation in the
industry. Is that your view of the future for regional newspapers, many, many
fewer?

Sly: “Well, we absolutely believe in the
need for consolidation. Uh, if you look at what’s happening in the regional
newspaper industry, we’re facing structural challenges but actually, the clear
and present danger right now is the advertising recession.

“Rising unemployment affecting recruitment
advertising, the crash in the property market affecting uuuuhhaaah our property
advertising, and the carnage in the car market in the UK affecting motors.

“Those are the three key revenue planks of
the regional Press.

“We want to play our part in the New Media
Economy, what we need are print brands, our print audiences, our revenue and
our cash flows to be enabled to do that, so what we are saying to the
Government is, is that the industry needs to consolidate.

“The problem with that is that the
Regulator looks at our industry and very narrowly defines us as print markets,
and what we are saying is no, we now operate in a much wider competitive market
not least with, with online.

“But I think there is a much, much more
crucial point here as well and that’s about the long term future of local media
and local journalism.

“Now this is not cat up a tree journalism.
What we are talking about here is who turns up at the lower courts every
morning, who is it that’s holding the councils to account, where is that
planning application being properly debated.

“Local newspapers, and we absolutely
believe in them.”

More Jeff Randall: Sky News



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