It was grim news to read on New Year’s Day. David Montgomery had just acquired JPIMedia, the third-largest UK regional newspaper group with more than 120 newspapers, for £10.2m through the takeover vehicle of his company National World. For this price, he has acquired prestigious titles like the Yorkshire Post newspapers, purchased for £570m in 2002, and the Scotsman group of newspapers purchased for £160m in 2005.
In monetary terms, National World is paying only £5.2m upfront in cash, with two further payments of £2.5m on 31 March 2022 and 31 March 2023. There is also some working capital thrown in to sweeten the deal.
It is surely an understatement to call this a ‘cut-price deal’. In a series of tweets, broadcaster and journalist Andrew Neil, who was publisher of The Scotsman for ten years, described the deal as “one of the most egregious examples of value destruction in newspaper history”.
JPIMedia (previously Johnston Press) was taken over by a hedge fund Golden Tree Asset Management in November 2018, after Johnston Press went into administration. The demise of Johnston Press was self-inflicted by Tim Bowdler, chief executive from 1988 until 2009. For years, his strategy for transforming a small Scottish newspaper publisher (founded in Falkirk in 1797) into a major local and regional newspaper publisher was lauded.
Put simply he acquired newspapers, saddled the company with debt and paid handsome dividends, based on an operating profit of up to 35 percent until the recession hit in 2008. Then in a perfect storm, as circulation fell and advertising revenue plummeted, the company couldn’t repay its debt. A decade of decline followed and with over £220m of debt due to be repaid, the company finally threw in the towel.
But the new owner, JPIMedia, clearly wasn’t in it for the long-term. It sold the i newspaper to the Daily Mail group for £50m in November 2019. In October the following year, the company sold its printing presses in Dinnington in South Yorkshire, Portsmouth, and Cam in Northern Ireland to the Daily Mail group, whilst also desperately trying to find a buyer for all of its newspapers.
For many journalists, David Montgomery is bad news. When he ran the Mirror group in the 1990s, journalists nicknamed him Rommel because, after all, wasn’t Monty meant to be on our side? Whilst there he also acquired a stake in The Independent and The Independent on Sunday. Andrew Marr, then editor of The Independent, describes in My Trade Montgomery’s determination to change this paper’s personality. “The friendly discussions turned into arguments. The arguments became rows. It became quickly obvious that if he won complete control, the paper as I knew it was finished.”
Richard Stott, editor of the Mirror under Robert Maxwell, was desperately trying to stitch together a management buyout to ensure the Mirror’s survival after Maxwell’s death, but the banks sent in a team led by the former Today editor, David Montgomery, instead. Though he assured Stott that his job was safe, Montgomery fired him soon afterwards. When Stott challenged him about the lie, Montgomery is said to have replied that his statement was “accurate at that time”. The Mirror lost sales and also its distinctive campaigning qualities whilst Montgomery was in charge.
But that’s old news. What are the prospects for the former JPIMedia titles under their new owner? Surprisingly, one respected commentator has emphasised some positive aspects. “Montgomery”, Raymond Snoddy writes, is “making all the right noises with moves to decentralise management and editorial and get back to local roots. If that counts for anything, it should mean an end to subbing centres far removed from the communities being written about and a renewed commitment to local journalism”.
Montgomery is also promising that the National World titles will eschew click bait and concentrate instead on unique local content. This, he believes, will “provide advertisers with the best environment to promote their services”.
One thing is clear. We desperately need to ensure the survival of what remains of our local and regional newspapers, already depleted in terms of the number of journalists working on them and the drastic falls in circulation, especially with the pandemic.
This was underlined for me by a Yale University Professor Timothy Snyder explaining why an angry group of Americans stormed the Capitol building. He pointed out that:
“Local news which is the way that Americans grounded themselves in the realities around them is essentially dead … most of the areas of the United States are news deserts”.
In the absence of accurate, fact-checked journalism, social media fills the vacuum, often fuelling division and hatred.
We have our own example of what can happen in Yorkshire. Remember the front page in the Yorkshire Post on election day in the wake of the furore over the publication in the Yorkshire Evening Post of Sarah Williment’s four-year old son forced to sleep on the floor at Leeds General Infirmary and the accusations of fake news?
The paper was able to challenge the charges of fake news, but it also issued a stark warning: “It is not hyperbole … to suggest this relentless, unchecked, unregulated online wild west is threatening to destabilise our democracy”.
Events on 6 January in America underline how true that statement was, and why we need to sustain diverse, democratic and accountable media, particularly at a local and regional level.
Granville Williams edits MediaNorth.