← back to all news All eyes on the future forJPIMedia
THE EDITOR’S CHAIR: Gary Cullum applauds the pre-emptive action to save JP
AFTER 18 months of intense media scrutiny Johnston Press finally has a new owner and a new name – JPIMedia.
And with no viable solutions nor suggestions forthcoming from any third party since the company put itself up for sale, a quick entry into administration followed by a pre-pack agreement for the company to be bought by its major lenders seems a logical solution that, at least for the time being, protects around 2,000 jobs and ensures the 200-plus newspaper titles and associated websites continue to be published.
Not only that, but the new-look company has had much of the heavy debt burden lifted from its shoulders. All 11th hour stuff, and you can hear the sigh of relief.
The publisher had been looking to refinance £220 million of debt due to be repaid next June but, as part of the transaction, the new owners have agreed to inject £35 million of new money into the business and reduce its net debt by £135m. That’s a huge lifeline to the former beleaguered newspaper publisher that once ruled the waves in terms of performance and profitability.
In an accompanying statement, JPIMedia, which will be led by former JP CEO David King, offered reassurance that the acquisition of Johnston Press ‘secures jobs and the future of its brands and titles’. And what a timely statement that is, providing reassurance to staff just five weeks before Christmas.
Not only that, but JPIMedia’s shareholders recognise the vital role that local and regional media plays in the communities they serve and remain committed to protecting and enhancing the value of the business in the future, the company said.
The sale has triggered an assessment period for the employees on the defined-benefit pension scheme, and some staff will lose out. I was talking to a JP manager over the weekend the announcement broke, who said that although he was sad about the pension situation he’d much rather have the comfort of knowing he still had a job and a monthly salary.
And for now, it’s business as usual with employees’ rights maintained, suppliers set to be paid and newspapers printed. That enables management to ensure the group’s titles continue to publish the high quality journalism for which the group is known and which has never been more important than it is today.
Sadly, the stock market cannot recognise the value of the skilled and experienced journalists, ad and production teams, and print plant employees, who are all invested in the company’s future.
With no real stock market value in the business prior to the sale – despite perhaps the sum of the parts – it means JP shareholders lose out. But the deal ensures the survival of the company.
John Ensall, a director of JPIMedia, said: “We look forward to working with the management team as they embark on the next chapter in Johnston Press’s story in the media sector, with the resources to support local and national journalism and embrace the digital future.”
Speculation that the publisher might be sold had been growing since it announced a strategic review in March 2017. That JP had reduced its debt by more than half a billion pounds in a hugely difficult trading climate is no mean feat. Indeed, in his letter sent by email to all staff, David King said at peak, the company’s debt reached £793 million.
Taking a huge chunk out of that debt is evidence of the resilience, robustness and potential for profit in the news media sector. Having seen all the social media messages of support to JP and i newspaper employees over recent days, we all hope to see JPI rise phoenix-like from the ashes of JP.