Johnston Press’s for-sale sign is a tale of misery

In 2005, Edinburgh-headquartered newspaper publisher Johnston Press had a market value of £1.6 billion. Ahead of its announcement this week that it is putting itself up for sale, the figure stood at £3.4 million (€3.9 million). That's not merely a slump in value. It's obliteration.

The company that owned close to 250 regional news titles across Britain and Ireland as recently as 2013, now has about a stable of about 200 publications. In 2014, it offloaded its Republic-based titles, including the Limerick Leader and the Kilkenny People, for a fraction of what it had paid for them during the boom. They are now owned by British advertising executive Malcolm Denmark, whose Iconic Newspapers runs them at a profit.

But the crumbling Johnston empire still contains the Belfast News Letter, the Derry Journal and a number of local titles in the North, as well as once flagship newspapers such as the Scotsman and the Yorkshire Post.

The past five years have been a time of cutbacks and closures for Johnston Press, a company seemingly trapped in the chicken-and-egg misery of declining print circulation, plummeting advertising revenues and fast-descending employee morale. The one vague success it has had of late was in managing to grow the UK national “i” newspaper, which it bought from Evgeny Lebedev’s ESI Media in 2016.

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The company’s observation in a spring trading statement that it was seeing “early signs of improvement” in regional print advertising proved to be unearned optimism. Its advertising revenues actually dropped 15 per cent year-on-year in the first half of 2018. Worse, given the company had never dealt with its historical debt issues, a slightly-less-worse advertising performance than before would have been irrelevant anyway.

With the deadline looming for its £220 million (€250 million) in loans, the company conducted a strategic review of its financing options. It appears to have revealed only one: the for-sale sign. The publisher, which has its roots as an 18th-century family printing business, now faces being broken up by any bidders that come forward. A once-proud newspaper group, it is now the subject of a grim salvage operation.