Drop in classified ads hits GMG Regional Media - North West Media News

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Drop in classified ads hits GMG Regional Media

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Friday, 31 July 2009

Guardian Media Group PLC has announced its full year results today with news that a fall in classified ads revenue has hit its regional division hard.

It made almost 300 redundancies in March and April and the division has been making a monthly trading loss for more than 6 months.

GMG Regional Media’s operating profit declined to £0.5m (2008: £14.3m) on a turnover of £94.5m (2008: £120.5m).

It blames a 30% fall in classified ad revenues: recruitment fell by 34%; motors by 16%; property by 46% and display revenues slipped by 7%.

The report added that since the end of the 2008/09 financial year “conditions within the regional press have, if anything, worsened.[...] GMG Regional Media will continue to review its operations as it seeks a sustainable future for its businesses and titles.”

GMG Radio meanwhile has performed somewhat better, while the total advertising market dropped by over 14%, GMG Radio was limited to less than 5%

However, the division has moved into an operating loss, which before exceptionals was £6.6m (2008: £0.1m profit), with a turnover of £46.6m (2008: £48.8m).

“2008/09 was a difficult year for most parts of the media industry, and our own Group is not immune to the combined effects of recession and longer-term structural change. We will need to re-examine and reshape many of our existing business models if we are to continue to be successful,” said Amelia Fawcett, chair of GMG.

“The Company’s ownership structure, its unique ethos and purpose, and the recent diversification of its portfolio offer some protection from the current economic storm.”

GMG claims the outlook is positive but that it will be reviewing the structure of its portfolio on “an ongoing basis.”

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Comments (12)

1 By Dave Toomer, on 01-08-2009 12:10
Tough times indeed for Guardian Regional Media. I therefore wonder whether the division's executive, Mark Dodson would consider handing back his £47k bonus he got for "personal objectives". Other execs at Guardian Media have handed theirs back and good on them. However, this is nothing compared to the devastating sacrifices the 70 odd journalists in Greater Manchester have been forced to make because of adverse conditions compounded by some truly disastrous decisions.

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2 By jackson, on 01-08-2009 16:23
I must agree whole heartedly with Dave Toomer. So much of the downfall of GMG regional division lies solely at the hands of Mr Dodson. To continue with \'his baby\' Channel M and make disastrous sacrifices to the successful aspects of the business, such and the weekly newspapers, only goes to support the concept that he doesnt understand the local media business. 10 years ago a local news station was created in Liverpool - it failed. Whatever did Dodson think he was doing thinking he could create something that could rival the BBC and Granada in Manchester with few experienced resources and a team of amateurs. And how can he justify his \'local station\' now with only a few hours of a local output while losing so much money every day. Perhaps the company could have weathered the storm of the credit crunch and the loss in advertising far better if it hadn\'t have haemoraged millions through Channel M. When will the execs realise that removing the problem may go some way to solving it.

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3 By CP Scott, on 03-08-2009 07:12
Steady on. MEN Media has a board of directors who are share responsibility for the terrible mess the company has got itself into.

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4 By Blower, on 03-08-2009 12:09
Wish someone would reward ME for failure - I'd be rich.

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5 By Ironside, on 03-08-2009 12:40
Check the wires - talk of dumping the Observer is rife - it isn't protected by the GMG trust charter. A seven day Guardian, anyone? With a magazine included called Observer? You read it here first.

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6 By hack, on 03-08-2009 13:38
After losing a bomb on its shareholding in the Sunday Correspondent, The Guardian was undespondent and paid way over the odds for the Obs and then turned it into a Sunday version of the Grauiad with smart-arsed columns from Peter Preston and the same old lefties. High spending and poor circulation meant that the evil sday had to come sometime. That day is now. Result: lefties on the dole.

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7 By hack too, on 04-08-2009 11:28
Relax everyone - the NUJ will be here shortly with a rescue plan;

1. Indefinite strike
2. Er...that's it.

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8 By Bella, on 04-08-2009 11:39
Are they actually surprised that revenue is falling? I'd go as far as to say that they don't understand newspapers, let alone TV. If they under-invest in journalism, the readability of the paper decreases, that means that revenues fall because people stop reading and advertisers stop advertising. I find it hilarious that the GMEN board stand around scratching their heads at their decline, it's like they thought their place in the Manchester media sector was sacrosanct and there was no need to innovate or invest in the products because they were always going to be there. A bunch of randomly selected media A'evel students would have made a better jobs of it. I say good luck to the small independents which are now springing up to replace former GMEN publications - they'll get the advertising because they'll get the readers because they'll give the readers what they want - good local information written by motivated and valued journalists. Simples.

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9 By Mr_Osato, on 04-08-2009 12:58
The rescue plan is very simple. Sell or close Channel Moneypit, sack the mismanagers and put people in charge who understand newspapers, then reverse most of the changes from the last six months or so to provide stronger, more vibrant products for the future. Unfortunately the likes of Dodson get away with it because of the mutual back-covering arrangement that the local newspaper cartels enjoy. 'We'll all go down together when we go'

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10 By WTF, on 04-08-2009 15:48
Osate - utter claptrap.
Newspapers are closing because people get their news from a variety of other sources. You don;t have to be a print hack to be a quality journo (although you and the NUJ would have everyone believe otherwise)
Investing in print is a waste of time and money. It will just delay the inevitable closure or switch over to other platforms or mediums. TV will pay its way, as will online.
I agree with hacktoo. The NUJ have no answers to the problem and whine about mismanagement...If they're the experts, take a loan from TUC HQ and run a paper for 12 months in this currnt climate....

...too much like hardwork eh?

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11 By Mr_Osato, on 04-08-2009 16:21
Clearly a nerve has been touched WTF. Why not take your own advice, put your money where your mouth is and take Channel M off GMG's hands. Perhaps you could employ Dodgson to run it.

Dunno about the NUJ, but I'd be happy to take over GMG regionals' assets and liabilities tomorrow. Run it (properly) in this climate and reap the rewards tomorrow.

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12 By Hacktoo, on 04-08-2009 17:05
Bella, if investment in journalism was the solution, titles like the Times, Sun, Telegraph, Sunday Times, Mail, etc would each be selling four million copies a day. They all have a bottomless pit of money to throw at promotion, cut price sales, etc etc and indeed they have done so and continue to do so, and the tragic fact is that none of it - none of it - works. It doesn't work because the world has changed for ever and it ain't going back. All publishers can do now is manage the decline. If every journalist and every editor on every paper was a killer combo of Harry Evans and Woodward and Bernstein, it still would not change one single thing. As for the NUJ printing anything, if you said to them "Here you go. You can have this machine from the Royal Mint - you can use it to print tenners, it's all yours", it would grind to a halt in a matter of minutes in a dispute over alleged under-manning.

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