Monday , July 26 2021

Uncertainty for local newspapers as publisher Johnston Press prepares for restructuring Tyne Tees

Johnston Press's chief executive has convinced staff of a "brighter future" after the company announced that it was preparing to enter the administration.

In an email to staff seen by the Press Association, David King said publishers would submit applications for court approval to be sold to newly established groups of companies controlled by creditors.

This tells staff that they will continue to be paid and must work as usual, with their contracts transferred to new companies. Mr King was set to remain as chief executive and said "operations will continue uninterrupted", with newspapers and websites published as usual.

This is not an easy decision for the board. However, after exploring various other options, this is the best action available and it is one that offers the opportunity for a brighter future for our business. "

– David King, Chief Executive of Johnston Press

One of the largest publishers in the UK, has more than 200 titles in print and online, including i, The Yorkshire Post and The Scotsman.

The titles in the ITV Tyne Tees region are;

Publishers are currently looking for ways to finance £ 220 million
debt that will be repaid in June next year.

In an email to the staff, Mr. King said:

At its peak, the company's debt reached £ 793 million.

We all work very hard to reduce those debts. And we do it against the background of a relentlessly hard market. "

– David King, Chief Executive of Johnston Press

National unity for journalists, called the move by Johnston Press a serious blow.

NUJ called for meaningful guarantees to protect jobs and positions throughout Johnston Press, following the company's decision last night to begin the pre-package administration process.

The transition to administration – stamped with rubber in court proceedings in Northern Ireland, Scotland and England – saw the formation of a new company formed by the current debt holders. This also allowed the company to revoke the stipulated pension benefit scheme which would now enter the Pension Protection Fund in a serious blow to current members and was postponed who would see the deduction of their rights.

NUJ general secretary Michelle Stanistreet said:

We welcome the commitment made by the current Johnston Press management that no work is lost in this process and the requirements and conditions of staff are protected. However, we have significant concerns about what the long-term goals of the newly created company will be. We want meaningful guarantees for the future and integrity of these titles and staff livelihoods, and a commitment that this is not a transition that leads to carving groups motivated by stripping assets rather than commitment to journalism and publishing.

Forcing retirement schemes to PPF is a big blow to all members of their future pension schemes and plans, while new owners are given awards to companies that are free of their responsibilities and obligations towards their pension funds. "

– NUJ General Secretary, Michelle Stanistreet

NUJ will hold further talks with Johnston Press on Monday.

In the latest trade updates, Johnston reported profits to revenue, largely due to changes in Google and Facebook algorithms.

Mr King said this meant the company had to "cut back our fabric to match the new reality".

If this agreement is approved, the debt will decrease, new money will be provided by the new owner, and the business will be in a more stable position. "

– David King, Chief Executive of Johnston Press

In a statement from the company on Friday, the publisher said "following
considerable interest in the formal sales process ", it was decided that no bids were received that provided sufficient value.

"The council has concluded that there is no value in the company's ordinary shares," the statement added.

Johnston will be listed from the London Stock Exchange as part of the process on Monday, said Mr King.

He also revealed that 250 members of the workforce currently in the defined benefit pension scheme would see future payments affected by restructuring, in line with the regulation on payment of pension fund protection (PPF).

Speculation that the publisher may be sold has grown since announcing a strategic review in March 2017.

In August 2018, company stock prices surged, surging as much as 70% in afternoon trade amid rumors that mysterious buyers were secretly taking more stock.

After the announcement of Health Minister Matt Hancock, a former cultural secretary, tweeted to say the news was "very alarming".

"Make a real reality of strong pressure on the press," he added.

Shadow culture secretary and Labor deputy leader Tom Watson also tweeted his worries, adding that he "will reach out to unions and staff over the weekend".

In the second tweet he said: "Johnston Press will be an administration is a bleak day for local newspapers and another one is very worrying for local democracy."

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Leeds West North Parliament member Alex Sobel tweeted to say he was sad that Johnston, who owned the Yorkshire Post and the Yorkshire Evening Post, would enter administration.

"Local newspapers that raise local and regional issues are very important for our democracy."

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