News consultant Jim Chisholm has taken a swipe at Johnston Press, labelling the publisher’s approach to the newspaper business a “masterclass in strategic failure”.
The publisher, which has more than 200 titles in the UK, has seen its share prices fall dramatically since the EU Referendum, in line with other regional publishers.
Shares in the company were selling for 15p today, down from 29p on 21 June – three days before Brexit was announced – with recovery proving slow.
Chisholm, who expressed his view in a blog post before the referendum date, said that while Johnston Press’ “struggles” were not unique among regional newspaper publishers their approach to recovery was a “masterclass in strategic failure”.
He lists several points to support his claim, including:
- “Since 1988, Johnston Press determinedly bought declining businesses, milking them in order acquire more decline, with no clear strategy, other than ‘that local papers can beat off the challenge of the web’
- “As they stripped their acquisitions of the expertise and intellect that could have defined a road to recovery, they were lauded by the City for realising operating profits in excess of 30 per cent, as their acquired properties, deprived of funding for growth, sank into the sand
- “More recently, while a new generation of Johnston Press leadership have addressed the liabilities of their ‘milk-decline’ policy their digital strategy is failing – in product, in audience, and in revenue
- “Johnston Press has a workforce, who are disillusioned and demoralised”.
He adds that while digital advertising revenues grew by 32 per cent in 2015 at close rival Trinity Mirror, Johnston Press recorded 12.4 per cent growth.
And he notes that according to the employer reviews website Glassdoor just 27 per cent of Johnston Press staff would recommend the company to a friend, versus 81 per cent who work at Trinity Mirror. The figure for rival regional publisher Newsquest was even lower at 17 per cent.
Chisholm says the total number of editorial and photographic staff at Johnston Press has fallen from 2211 in 2005 to 974 in 2015.
He also notes that the year-on-year decline in the publisher’s share price (80 per cent in the year to June 24 2016) has been over three times that of Trinity Mirror, “or indeed any other comparable stock”.
“This is not just a reflection of market performance, but also of management performance,” says Chisholm.
“Trinity Mirror have sufficient legacy control and innovation to flourish beyond their point of inflection.
“Their share price does not reflect their good work, the analysts’ ratings reflect this.”
But it’s not all gloom from Chisholm, who says there is a “white knight” on the Johnston Press board in the form of non-executive director Kjell Aamot.
“He is an iconic legend among leaders in the global newspaper industry, having been the man who engineered the extra-ordinary, Norwegian/now-global media company Schibsted,” says Chisholm.
“His credentials are outstanding.”
Press Gazette has asked Johnston Press for a comment.