MEDIA & MARKETING:David Kennedy has repurchased the local newspaper group he sold five years ago
FIVE YEARS after selling the Tallaght Echofor €5 million and 30 years after he first launched the newspaper from his sitting room, 58-year-old David Kennedy is back in charge after purchasing the title from Johnston Press plc in December for less than €1 million.
The local newspaper market that Kennedy exited in 2005 is very different to the market that he re-enters in 2010. Paid-for local and regional newspapers, traditionally seen as recession proof, are caught in a perfect storm of ageing readership, fewer newsagents and classified advertising that is migrating to the web.
The other big change has been the increased proliferation of freesheet titles. According to Dan Linehan, chairman of NNI Local and Regional Newspapers: “There are some well-run free newspapers being published. But then there are others who are doing business in a way that defies economic logic. Barriers to entry are very low and it has never been cheaper to print a newspaper. There is a need for a policy to be formulated in this area because, at the moment, it is very difficult for free and paid for newspapers to exist alongside each other.”
Financing the purchase of the Tallaght Echowas not straightforward for Kennedy. The capital gains he made five years ago are tied up in a number of investments which are now "floating in cyberspace waiting to come home".
“I had a certain amount of cash and I looked for other investors. But it was a bad time to look for financial backing. A price was agreed with Johnston that we could afford by ourselves and a deal was done.”
The challenge facing Kennedy is to try to grow the Echo's circulation in an area that is also served by three other local newspapers. The Gazette(owned by The Irish Times Ltd), Southside Peopleand Tallaght Newsare distributed free, while the Echohas a cover price of €1.80. Kennedy says he has no plans to reduce the cover price permanently but he will deploy price promotions through the year to increase news-stand sales.
Currently the Echo has separate editions for Lucan, Ballyfermot, Clondalkin and Palmerston. Kennedy says he may have to cut that back to two editions in the months ahead.
The one upside for Kennedy is that, with a current ABC circulation figure of just under 8,000, the title has solid circulation revenue, which is an advantage in a depressed advertising market.
As for his competition, latest ABC figures for the Gazette Group show circulation of 6,050 for the Lucan edition, 4,485 for the Blanchardstown edition and 3,945 for the Clondalkin edition. There are no ABC figures available for the Southside Peopleor Tallaght News.
Gone by the wayside is the Tallaght Voice, which ceased publishing last year, much to Kennedy's relief. "I don't mind free newspapers but the Voice was different. It was purely out to get the Echo. The Voice initially operated as a paid-for title. It later went free. At one point, the Voice was giving away as many as 30,000 copies and that damaged the circulation of the Echo. Our current ABC is just under 8,000, but when we sold the paper to Johnston, circulation was nearly 12,000."
The latest filed accounts for Tallaght Publishing Ltd, publisher of the Echo, show turnover declining to €1 million in 2008 from €1.4 million the year before. But Johnston Press cut overheads in line with the reduction in revenue and the company did not incur a loss in 2008.
Kennedy is optimistic that he can turn the Echoaround.
"It became obvious to me that the previous owners were not doing a very good job in minding what I had created. No-one appeared to be in charge locally so there was no connect with the community. The Echowas in terminal decline and Johnston would have closed it down. Having paid the price I did to buy it back, now the glass is half full."
Kennedy’s view is that the only way paid-for local newspapers can compete against the free newspapers is to invest in good journalism. “People will pay for strong local news. Last week was my first edition and, anecdotally, the feedback is good. We have done local mailshots telling people I’m back. We are idealistic about what a local newspaper should be and sometimes that idealism doesn’t square up with the commercial side.”
siobhan@businessplus.ie
