The boss of the publisher of the Mirror, Express and Star newspapers has warned staff they have to face the “inconvenient truth” that its print titles will become loss-making in as soon as five years.
The chief executive of Reach, which also owns scores of regional titles including the Manchester Evening News, the Birmingham Mail and the Liverpool Echo, also maintained that the publisher has “significant resources” despite cutting almost 800 roles in the biggest annual cull of jobs in the newspaper industry in decades.
Jim Mullen, who has run Reach since 2019, told staff in the meeting that they had to face the ramifications of the fact its traditional print operations have declined by 17% annually over the past four years.
“Our biggest revenue stream is newsprint and the papers,” said Mullen, in an internal town hall video meeting with staff. “When I started I said there is at least 10 years of profitable business in newspapers and probably more. I have been in the business for five years so half of that is gone. There is probably five to seven years that we can look at. We have to face into this inconvenient truth.”
Mullen said the Mirror, which now sells about 230,000 copies daily, would be “pushing” 100,000 copy sales in five years at the current rate of decline.
However, Mullen said that the cost-cutting drive to move to a digital-first approach to increase online revenues – which last year declined by £21m year on year to £127.8m – would stabilise the profitability of the titles.
“At the moment print, the big brother, the big sister, is supporting the digital business,” he said. “At some point in the next five to seven years, which is where we have to think of, digital will get to a point where it will repay that debt and support the print business and keep those titles running. There is a future for our titles but the future is going to be different. The titles you are passionate about at some point get to a point where they will be of minimum use on paper but will [also] exist in other forms.”
Mullen said the costs associated with running print plants and distribution remain high even as copy sales fall, exacerbated by print ad revenues falling in line with reduced circulation, and that readership was “under attack every day” from factors including the shift to digital and the life expectancy of its mid to late-50s average readership.
“The big one we can’t avoid, that’s nature, we die,” he said. “So, we have tracked the mortality rate and the readers are basically dying over a period of time. Also you get to 75, that’s average mortality in the UK. This may sound really dry but it is important.”
He also told staff who expressed concern that the deep cuts are making it increasingly difficult to adequately cover the news comprehensively that it was a matter of “prioritisation”.
“I think we have significant resources, even though we have cut them,” he said. “The question is, the argument is, we are spread too thinly. We need to accept the fact people are going to be asked to do more. We need to talk about prioritisation.”
Mullen added that he had “never been involved in the editorial process” and how the cuts and “prioritisation” strategy is handled is up to editorial leadership.
While he added that the deep cuts form part of a plan to ensure that this year will be free of redundancies, he could “not guarantee” there would be no more job losses if unexpected market shocks cause a faster than planned commercial deterioration.
Mullen said the often-criticised overloading of webpages with ads and pop-ups is a fact of life as the business drives digital advertising to balance the decline in print.
“The user experience is really straightforward, we are ad funded,” he said. “I am as disappointed as anyone else that people don’t really want to pay for our content online. Not enough of them, nowhere near enough of them. Some people struggle particularly on the websites but if we did not put those ad blocks in and did not get additional revenue in then those cuts would have to be deeper.”
Asked about the strategy of flooding its websites with stories, Mullen indicated that reader engagement and the quality of articles did not drive revenues as much as volume of content.
“We are in the real world,” he said. “I need to get the page views, that is the way we sell advertising blocks, and advertising blocks deliver revenue. I know it is not ideal. We don’t talk about engagement and quality. We do, but it is not in the trading report.”
Reach declined to comment.
