The start of a new year is traditionally the laying down of markers Continue reading
Tag Archives: losses
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The Buteman’s owner, Johnston Press, faces possible job losses and sale of titles
Argyll’s Isle of Bute is anxious about the future of its excellent local paper, The Buteman. Johnston Press, owner of a portfolio of newspaper titles from The Scotsman to The Buteman, has announced record losses amidst a 36% fall in advertising revenues – warning that this is likely to mean further job losses on top of the 1,130 it shed in 2008.
With the company shouldering a serious debt burden of around £475million, it is also now thought that the sale of some UK titles is possible as part of the company’s restructuring. Johnston Press has, as For Argyll reported, recently started looking for buyers of some of its Irish titles.
The company is also pessimistic about the coming year. John Fry, its new CEO, has warned that 2009 are expected to be well below those of 2008.
On the same day, Trinity Mirror closed a local newspaper in Derbyshire. The Long Eaton Advertiser has been the voice of its community for one hundred years. It is among more than 30 localnewspapers in rthe UK to close this year with a loss of over 2,300 jobs. (Roy Greenslade, in Britain’s vanishing newspapers, estimates that 42 titles have closed in 13 moths – 4% of the total.)
The newspaper industry is asking the UK Government to allow more newspaper groups to merge in order to compete more effectively with the mass migration of news audiences and advertisers to online services.
This situation highlights Johnston Press’s problem. It began a long process of acquisitions in the 1970s. This continued into the mid 1990s when it bought up much of the EMAP press portfolio, up to 2002 when it bought Regional Independent Media’s titles and on to 2005 when, after spending £300 million on another six titles, it bought Scotsman Publications from the Barclay Brothers. Its fleet of titles today numbers over 300.
One obvious problem has been the falling pound which has hit particularly hard because Johnston Press borrowed in euros four years ago to acquire the Irish titles for which it is now seeking buyers.
That was bad luck. The big mistake was bad judgement and was therefore of the company’s own making.
With research evidence available on the scale of migration to online services of users and advertisers alike, it is hard to understand why Johnston Press persisted in major acquisitions after this pattern was known.
This is not a time for investment in newspapers, which itself may make it difficult for the company in the various restructuring measures it is exploring.
Almost £215bn of Lloyds £260bn toxic dump on state can be tracked to HBOS
The first of a double whammy on the Scottish taxpayer is our share of the debt burden of £260 billion of toxic ‘assets’ (as expensive mistakes are known in the upside-down world that is banking) that Lloyds have just dumped on the state for ‘insurance’.
The second hit is on pride rather than pocket. It is the traceability of around 5/6ths of this debt to HBOS – or what we still think of as the Bank of Scotland. This amounts to around£215 billion.
And in doing this neat transfer, Lloyds have arranged a valuable bonus not given to RBS in its own dump of £365 billion on the ‘state asset protection scheme’. In exchange for its generosity in this ‘asset’ insurance, Lloyds has negotiated a tax concession likely to cost the exchequer at least £7 billion in lost corporation tax.
The deal is that Lloyds ‘pays’ (and yes, this is no more a payment than the ‘assets’ are assets) the Government £15.6 billion as its insurance premium to protect the £260 billion of assets now lodged in the ‘scheme’ (now there’s an accurate word).
Lloyd’s will then be responsible for the first £25 billion of any – inevitable – losses but will be allowed to offset these losses against taxable income, a revenue loss to the exchequer of £7 billion.
Lloyds will also bear 10% of losses over £25 billion, with the state carrying the other 90%.
And the ‘paynent’ that isn’t a payment? Well, it’s payment in kind. Lloyds is giving the Government new ‘B’ shares in the bank with the right to convert these later into ordinary shares.
Quite how £15.6 billion can be translated to any particualr number of Lloyds ‘B’ shares in today’s gravity-affected market in banking shares is another matter.