Business Post newspaper ‘loses 60 cent every time it sells a paper’
THE Sunday Business Post newspaper is to seek up to 25 redundancies by the end of the year as part of a cost-saving restructuring plan, a court has been told.
The title, which employs 76 people and has a readership of 140,000, is being sold as part of a complex overhaul of the ownership and financial affairs of parent company Thomas Crosbie Holdings Limited (TCH).
The Commercial Court in Dublin appointed an interim examiner to protect the publication, which recorded a €1.2m loss at the end of January.
Mr Justice Peter Kelly was told it would be near fatal for the paper if it did not print a newspaper this weekend.
The court was told that the company behind the production of the newspaper, Post Publications Ltd, was looking to reduce costs on three fronts: rent, payroll and printing.
When questioned by the judge, Garvan Corkery, junior counsel for the company, said that management were looking for 20 to 25 voluntary redundancies by the end of the year.
It is understood the Sunday Business Post loses almost 60 cent every time it sells a paper.
Despite the figures, Judge Kelly was told there is a reasonable prospect for the survival of the paper and that expressions of interest have been made.
He said the appointment of the interim examiner was desirable and necessary for the company to continue to publish and have the protection to find new printers.
"It is crucial for the survival of the Sunday Business Post that it continues to publish," said Judge Kelly.
"If it ceases there's a real risk of its readership disappearing and its market share being dissipated."
Mr Corkery revealed that winding up the paper would leave creditors owed €6.5m, but selling it as a going concern would leave a deficit of nearly €640,000.
"The failure to publish an edition of its newspaper would be seriously prejudicial to the confidence of its advertisers and consumers, and so to its survival," he said.
Mr Corkery revealed AIB - which was one of the main creditors - had agreed to provide facilities and fund the shortfall on the cashflow for the owners and publishers during the period of protection.
Ross Kelly, a distributor, and the Revenue Commissioners were also listed as creditors, but the court heard its tax affairs are up to date and any money owed is not historic.
However, an accountant stressed survival would depend on the implementation of a cost reduction programme involving the "renegotiation or repudiation" of its lease, which is in arrears by almost 600,000 euro.
It pays €440,000 a year for premises on Harcourt Street, Dublin 2, which were leased from Irish Life Assurance for 25 years from May 1990 on an upward-only basis.
Yesterday, TCH revealed it planned to sell the paper while the Irish Examiner, which was owned by the same group, will be bought by a new company - Landmark Media Investments - also headed up by the Crosbie family.
Several regional titles and radio stations were also saved under the plan.
Judge Kelly was told new printing arrangements were needed since Thomas Crosbie Printers Limited, which was in charge of outsourcing the printing, folded.
However, the deal allowed the newspaper group to break a contract with outsourced printers Webprint Concepts Limited.
The directors of Post Publications Ltd are listed as George Alan Crosbie, Thomas Patrick Crosbie, Thomas Murphy, Cliff Taylor and Fiachra O'Riordan.
The court was told that despite having two strong competitors, the Sunday Business Post had a readership of 140,000 in 2012, accounting for 10% of the Sunday broadsheet market, but has been loss-making since 2009.
Mr Corkery said a result of a general economic decline, revenue fell 53% from €15.6m in 2007 to €7.3m euro last year.
He revealed advertising was responsible for most of the drop, down 68% over the same period, while circulation revenue was down from €4.9m to €3.69m, a decline of 51%.
"These figures reflect the impact of the economic downturn during the period, including in particular the marked decline in consumer spending and the severe drop in expenditure on press advertising, particularly in employment, property and motor sectors upon which the petitioner was especially reliant," he added.
The lawyer told Judge Kelly that for the past three years the publication had focused on the pressing need for "a radical rationalisation and restructuring of its business" which involved cutting overhead costs including marketing, editorial and distribution.
Despite two cuts in pay, and a third being proposed, payroll accounts for 47% of the costs base as its income has dropped.
Grant Thornton said the interim examiner is charged with ensuring the implementation of a successful restructuring, and is hopeful that an investor committed to the continued publication of the paper and employment of its staff can be found.
A full hearing for the case has been set for Friday March 15.