Bristol Post journalists will be among those going on strike against Reach pay offers at the end of this month. Friday 26 August will be the first of four dates for strike action, also August 31 and September 15 &16.
While the CEO of Reach makes £4m a year and the company's pre-tax profits were up 9% to £143.5m from a £615m turnover (24% margin), journalists have been offered a 3% pay rise; which is already lower than inflation.
Newspaper owners talk about the gloom and doom of local newspapers and needing to make cuts. In fact, they are very successful business enterprises. Big profits and high margins attract buyers and increase the concentration of ownership. Six companies (Gannett, JPI Media, Reach, Tindle, Archant and Iliffe) account for nearly 84% of all local newspaper titles.
Circulation may have dropped but ads are up; digital revenue increased by 25.4% in 2021 a year or 38.6% over two years to £148.3m. So why do costs need to keep getting cut?
Primarily it’s because those in business as newspaper owners, don’t have the same priorities as (most?) journalists and residents. They are there to make money through maximising revenue and minimising production costs. What keeps happening is a reduction of the number of journalists and a maintenance of low wages, which eventually translates to low quality news.
One way ad revenue keeps rising is because “local newspapers effectively enjoy a monopoly in local classified advertising.” Some areas only have one local paper so even if the circulation drops, there is no other place to advertise. Note the amounts of ad revenue spent after Covid.
Prior to Covid, ad revenue spent on national newsbrands was over £1bn. In 2020, regional papers had the second highest spend, while in 2021 they were third highest. At £556m in a highly concentrated environment, that’s still a fair amount.
Sustained ad income is key to local media profitability. Between 25% and 30% profit margins are typical for many local newspaper companies (see Reach). This is a reason why takeovers and mergers remain a constant feature of the industry.
Companies maintain profit margins by doing the following:
Minimise production costs through new printing technologies, and
keeping labour costs low.
Job cuts and non-replacement of staff also reduce production costs. The strategy of cost-cutting by low wages, staff cuts, and non-replacement, triggers a ‘spiral of decline’ in which you ‘end up with fewer page changes, fewer editions, less localised coverage and, inevitably, lower sales’ (Dear 2006: 8).
The consequence for readers and residents is editorial decline. Making money while sales fall has a critical impact on the newsgathering and reporting process.
centralising subeditors means subeditors have little local knowledge.
economic efficiency is high but the tie with the local community is ruptured (Lockwood 1999: 15).
The real cost of ‘efficient’ printing is a shrinking news day with less time to investigate and report the news. Newspapers are increasingly reporting ‘Yesterday’s news tomorrow’ ( a local editor cited in Barter 2005: 4).
With printing staff fired, subs centralised and other admin tasks done elsewhere, buildings are mostly empty; then they get sold. We’ve seen this happen in Bristol but it’s happening everywhere.
Location is important
When offices are moved, the link between local papers and the local community and local stories is broken. Being able to meet readers and local people is essential to ‘a healthy contacts book and a healthy local paper’ (Thom 2004: 21).
Fewer journalists also means an increasing reliance on press releases from local and central government or copy from PA. This effectively means news is outsourced, which is flexible and cost-effective.
News has been standardised. In 1999, Peter Oborne wrote about how a single press release with Blair’s byline was published verbatim in 100 different local newspapers: the only word changed was the name of the town. Has much changed?
To increase circulation, the following has taken place:
there has been a shift to tabloid size
there is more tabloid content
news is seldom anything the council is doing
there is more emphasis on entertainment, consumer items and reports, and focus on human interest.
Importantly, there is less investigative or critical journalism.
Low-paid and under-resourced journalists are more likely to be ‘supping’ with the devil rather than ‘attacking’ him. Which is what we saw in Bristol when the mayor Marvin Rees paid £36k to the Reach network, thus ensuring that he would need do no interviews. Only advertorials were published, including a £4907 for a Christmas message — the type the Post published for free from his blog the previous year.
There are a fewer reporters and a greater emphasis on the number of stories and not the quality of stories. Reporters are mostly rewriting press releases. There is also less training.
The effects can be seen in how ‘local’ the paper feels. In 2022, research on readership of local papers showed that Bristol Live (the online part of the Post) had the second-lowest number of readers in its region at only 14%. In fact, only one Reach publication was in the top 20. That was Chronicle Live with 40%.
One local editor lamented, “All we’re doing is just trying to keep circulation up as a horse for advertising” (Franklin 2006).
And that’s what Reach is focusing on. As owners of over 110 local newspapers and nine nationals, they can sell readers’ eyeballs all over the country. Every time a reader accepts their terms when they read a local story, they agree to Reach using “precise geolocation data and identification through device scanning”. This helped provide £13m in dividends even through the pandemic.
Their interim financial report in 2021, mentioned the "Customer Value Strategy" 16 times over 36 pages. It's a way of "getting closer to our customers" by "using data" to create new opportunities for "brands" to engage in a more targeted and relevant way.
They go on to say that they “are using this data and the insights it provides to develop our content to be more relevant and to deliver more effective marketing campaigns to brands and agencies." This will "increase the value of our audience to brands and agencies, further driving revenue growth."
As with all media, the value is not in the news, it's in the audiences you can sell to people with money. It's not just Bristol audiences and eyeballs, it's tracking audience behaviour across different sites.
By 2018, spend on local news reporting was so low that the BBC created the Local Democracy Reporting service to ensure the public would get news about their councils. These are journalists funded by the public but working for regional newspapers. Inevitably, journalists paid for by Reach were let go while LDRs stayed.
The fight is between the workers and the bosses. I’m not saying Reach newspapers will turn into the bastions of democracy we all need right now as soon as their demands are met. I suspect, however, that it will increase the chances of progress.
That’s why I support the strike action by journalists. I’m also an NUJ member.
Excellent Retweeted of course