Like Fairfax Media closer to home, United Kingdom media owner Richard Desmond holds the unfortunate belief that sacking journalists is good for the bottom line and the only way to cut costs. Unfortunately for journalists at both groups, that strategy appears on recent evidence to be correct. Desmond’s Express Newspapers (Daily Express, Sunday Express, Daily Star and Daily Star Sunday) have reported a big boost in profits in 2015, after a large redundancy round in 2014.
Fairfax is heading off on this route once again to help improve his profitability (along with the selling of unwanted assets). The retrenchment of dozens of journalists will cut costs and reshape The Age, The Sydney Morning Herald, The Australian Financial Review and The Canberra Times. Whether it will do anything for the long-term future of the newspapers remains to be seen.
In July 2014, Express Newspapers revealed plans to cut 200 editorial jobs — reducing headcount from 650 to 450. It has added (cheaper) jobs at its websites, offsetting some of the axe swinging among the more expensive journalists. That, along with ditching the odd asset, appears to have transformed its fortunes, taking pre-tax profit from 812,000 pounds in 2014 to 30.5 million pounds in 2015. That figure was helped by interest received of 15 million pounds from cash generated by asset sales. Stripping this out, Express Newspapers made an operating profit of 16.3 million, still sharply higher than the 4.5 million loss in 2014.
Save up to 50% on a year of Crikey
Choose what you pay, from $99.