How Stormont cuts could decide what newspaper you read

PLANNED Stormont Executive cuts in public advertising spending are likely to bring about dramatic changes in the press here over the next 18 months.

In a jurisdiction heavily dependent on the public sector, cutbacks will be devastating, industry insiders say; they’re predicting the closure of 12 newspapers and the loss of 580 jobs.

Proposals within the Office of the First Minister and Deputy First Minister, seen by The Detail, could see the majority of the 5,000 government advertisements, which provide a substantial proportion of newspapers’ income here each year, run instead run on television or the internet.

Major media outlets likely to survive – or benefit from – the new regime include UTV, the Belfast Telegraph and its NIJobfinder website and some weekly newspapers which a government-commissioned survey says are still reaching a significant proportion of the public.

But The Irish News and The News Letter are deemed as registering “low scores” in the research for Office of the First and Deputy First Ministers.

The Review of Classified Advertising was chaired by Noel Lavery, one of OFMDFM’s most senior officials and it reported late last year, with emphasis placed on making government advertising competitive, effective and more cost-effective.

But there is also a history of tensions between the Executive – or the key parties within it – and some media here, most recently exemplified by the First Minister Peter Robinson’s attack on “negative reporting” which he said was damaging Northern Ireland’s economy – and this has fuelled suspicion among some in the newspaper industry that the review is an opportunity to punish the Executive’s most vigorous critics.

A confidential memo from the First Minister Peter Robinson and Deputy First Minister Martin McGuinness circulated to ministers in the Executive last December, also seen by The Detail, is unsympathetic to the plight of the papers.

It states: “Media organisations have to recognise that in this new era of intense pressure on public finances, government advertising budgets will decline. The purpose of advertising is to deliver effective communication and not to act as a subsidy.

“Decisions on advertising expenditure will be subject to the same scrutiny and control as other areas of government expendtiture.”

And Mr Robinson and McGuinness provide their own take on the link between cuts and the journalism of the papers concerned – suggesting that the danger could be that papers could start sniping because of the new regime: “In the past editorial decisions were not influenced by the level of government advertising and as we enter a new period of significant pressures on public expenditure, it would be disappointing if this principle was disregarded.”

In previous years newspapers have successfully resisted attempts by the government to withdraw advertising from them, relying on legal requirements for public authorities to advertise in a wide range of printed press.

But it’s thought they’ll be unable to do so this time round; the review has recommended a phased approach: continuing to place notices with newspapers where there is a legal obligation to – such as planning notices, but this is only until it changes the legislation involved, a process it estimates will take 18 months.

The shift has already occurred with government procurement where there is no obligation to advertise in the press; a single government ad in papers already directs viewers towards the civil service website – www.nidirect.gov.uk – when fresh tenders have been put up; it’s known as the “New to View” ad.

Removal of other types of ads could also happen soon: the review notes that the study it commissioned by the marketing agency Millward/Brown/Ulster found that religion does not impact on the choice of media for recruitment or public notices; that health trusts here already mainly use the just Belfast Telegraph to advertise jobs because most applicants found their job ads there.

And in a section focused on the recruitment market, the review also notes: “Although central government normally uses the Irish News, News Letter and Belfast Telegraph, the boards, trusts and the Equality Commission only use one paper”.

Changes are also already in train over how the media outlets for public notices are selected – and the price is set. In keeping with the Lavery review’s recommendations that all public notice adverts be procured through open competition, the procurement process itself has recently been outsourced to an agency.

The contract to carry out the procurement process is expected to last for up to three years to allow the existing legislation on public notices to be changed.

In advance of this move, the Lavery review anticipated the impact this move would have on the local market: “This will probably reduce the number of newspapers receiving revenue from classified advertising and could impact on the financial viability of some papers.”

NEWSPAPERS AND GOVERNMENT INCOME

In 2010 there were 2,900 people employed in the newspaper industry in Northern Ireland.

Government departments spent £12.3m on media advertising in the last financial year, accounting for 70% of recruitment revenues of some newspapers.

Non-print media in Northern Ireland have long been agitating for changes to legislation, which currently oblige the government to place some ads in a wide range of newspapers; they say it’s created a newspaper “monopoly”.

That legislation helped The Irish News, Belfast Telegraph and the News Letter in 2006 when they took a joint legal challenge after the Stormont Executive’s attempts to change the existing arrangements for classified advertising.

The legal action was dropped, though, when the newspaper owners and government departments agreed to a new compromise procurement process.

However in 2010 the Executive commissioned the Lavery review of classified advertising, which reported in autumn of last year, concluding that a lack of proper tendering meant government newspaper advertising breached European Union guidelines.

Newspapers were also accused of deliberately overcharging government departments in the review which studied similar cost-cutting measures in other jurisdictions like Scotland and the Irish Republic.

Those findings were presented to the full Executive in December along with the confidential memo from Mr Robinson and Mr McGuinness.

The review included a submission from the newspaper industry in Northern Ireland, including a report commissioned by the three daily newspapers which predicts that severe cuts would bring about the loss of 580 jobs and the closure of 12 newspapers.

The newspaper’s study found that a wholesale loss of government advertising could result in the closure of up to 20% of Northern Ireland’s 60 newspapers with an estimated loss of up to 362 jobs in newspapers and a further loss of up to 217 in dependant sectors.

In the memo, Mr Robinson and Mr McGuinness acknowledge the major implications for local newspapers, and state: “It is important to note that the outcome of this process will see a reduction in the number of newspapers which receive classified advertising and reduced revenue to newspapers. This could have implications for the viability of some newspapers.”

On the Lavery review’s recommendation for new legislation to open up recruitment advertising, it warned: “Again this approach will have implications for the viability of some newspapers but it should lead to an improvement in communications.”

LOCAL NEWSPAPERS IN DECLINE

In recent years Northern Ireland newspapers – like those around the world – have seen major declines in circulation. Advertising has plummeted in the recession and this has been accompanied by a substantial move by readers to online as witnessed by steep falls in sales of hard copies.

In 1990 the Belfast Telegraph had 132,617 readers but the latest Audit Bureau of Circulations figures for July/December 2011 show it has now dropped to 53,771.

In the same period the Irish News has gone from 43,353 to 41,932 while the News Letter’s readership has dropped from 34,338 to 22,548.

At the same time two local media outlets have established online recruitment sites which were seen as being in direct competition to newspaper advertising.

In 2009 UTV purchased www.recruitni.com while Independent News & Media (INM), which owns the Belfast Telegraph, also operates the www.nijobfinder.co.uk website. Another recruitment website, www.NIjobs.com has also made significant inroads into the advertising market.

Meanwhile commercial media have long been complaining about the domination of the web, editorially, by the BBC, and say this leaves them unable to move onto this field and compete.

BBC Northern Ireland’s news website attracts major traffic – currently around 168,000 views a day.

The BBC across all nations, however, is under pressure to scale back its online presence and its Director General Mark Thompson recently used a speech to the Royal Television Society to state that the organisation had to “think carefully” about the size of its news operation given the scale of the economic pressures faced by newspapers.

THE WORST MOMENT TO CUT?

University of Ulster media lecturer Dr Colm Murphy believes that the proposed cuts will inevitably contribute to the closure of a significant number of local newspapers – and couldn’t happen at a worse time.

“The media in Northern Ireland has already been badly affected by cutbacks in private sector spending,” he said.

“Now these spending cuts are coming from the public sector.

“It’s a kind of a pincer movement, where all the reliable sources of advertising are falling away.”

As most local newspapers rely on advertising for 70% of their annual revenue, Dr Murphy believes it is inevitable that editorial departments will face significant job losses as a result of the proposed cuts.

“The only way they (newspaper owners) can counteract the reduction in advertising is to cut their costs and were most of that cut comes the only place they have which is discretionary is editorial/ research.”

He said that with cuts in newspaper journalism, a knock-on effect on levels of scrutiny of the workings of the Stormont regime was inevitable.

AN INDUSTRY IN UPHEAVAL

However two leading figures in the study of journalism globally – Philip Meyer and Roy Greenslade – see the decline of newspapers in Northern Ireland as inevitable; mirroring the evolution of the news industry elsewhere.

Mr Greenslade, a professor at the highly-regarded journalism school in the City University in London, has tracked the ongoing decline of newspapers in Britain, with the closure of 34 newspapers in the last 15 months and he believes that newspapers in Northern Ireland can’t expect to escape closure.

“The figures betray what we all know to be the case, which is that printed newspapers are going out of fashion, in fact since the end of the Troubles the acceleration has become faster.”

He says that newspaper owners have played a major role in sealing their own fate.

“I think one of the great dramas is that newspapers didn’t catch on to the digital revolution,” he said.

“The initial thing was to play ostrich and pretend it wouldn’t be a problem.

“Then when they did realise it was going to be a problem they didn’t invest enough and because they still wish to preserve the old business model they can’t bring themselves to innovate enough to discover a new business model.”

Professor Meyer, has chartered the steady decline of the global print media over the last 50 years through his book `Vanishing Newspaper’, also says that good journalism should not be reliant on state subsidies of any kind.

“Journalists have to be independent, that is the first rule of good journalism, remaining independent, that means financially independent.

“From that point of view, you could say that it is a good thing that the [Northern] Irish government might withdraw its advertising, because it would force newspapers to be more independent.”