Authorization

Trinity Mirror boss shrugs off threat to cost-cutting plans after Star and Express deal

The chief executive of Trinity Mirror has said he is “not in the slightest bit concerned” about a review by competition watchdogs of his plans to slash costs following the publisher’s takeover of the Star and the Express.
Simon Fox rejected any suggestion of a threat to his ?20m cost-cutting plans from the Competition and Markets Authority (CMA) as he announced the company will change its name to Reach to reflect its increased heft.
Trinity Mirror is nevertheless barred from integrating the Express and Star following an order last week.
The regulator also demanded “no changes are made to key staff” and said it would review Mr Fox’s agreement to buy the titles from Richard Desmond for any “substantial lessening of competition” that may result.
There is no going back on the ?200m takeover, however, which was agreed without any condition of CMA approval and completed last week. Trinity Mirror appointed new editors for most of its new titles on day one.
Mr Fox today brushed off the threat of an intervention to protect competition.
He said: "We did anticipate the CMA. I don’t think it is necessarily a problem but we fully anticipated it.
“It’s why we said that [we expected] our synergies in 2020, with many of them delivered in 2019. That’s why we never talked about 2018.
“What we said was we don’t anticipate there being a problem, which we don’t. The fact that they are undertaking a review is completely normal. It would almost be remiss of them not to.
“They will undertake a review, it will take three or four months and we don’t anticipate there being a problem as a consequence of it.”
The former HMV chief executive said he was braced for ridicule over Trinity Mirror’s new corporate identity, but said it was a “Ronseal name” that “describes what accurately what we do”.
Trinity Mirror share price
“We anticipate hilarity around any name change but frankly in a short period of time it will just be what the group is called,” said Mr Fox.
“We reach people’s hearts, their minds and their communities.”
The acquisition of the Express and Star is at the centre of a strategy to replace declining print circulation and advertising sales with massive audiences consuming material for free online. Mr Fox has rejected subscriptions online and is pursuing vast scale instead.
“You either go to subscriptions and niche content or you go to scale, and that’s what we’ve chosen as our strategy,” he said.
Stripping costs out of the Express and Star is viewed as essential. The takeover of more print publications is designed to buy Trinity Mirror time to demonstrate it can deliver growth online to match the alarming decline of the Daily Mirror and hundreds of regional print titles.
“Every news publisher needs to get to growth and there are very few who are yet there,” said Mr Fox.
“It takes time. Look at the music industry.”
After a terribly damaging decade in which freely available music online laid waste to physical sales, record labels and music publishers are enjoying a resurgence. The change of fortunes is driven by subscriptions to services such as Spotify and Apple Music.
Trinity Mirror boss shrugs off threat to cost-cutting plans after Star and Express deal

Richard Desmond struck a deal with Trinity Mirror to sell the Daily Star and Daily Express titles

Credit:
PETER J JORDAN
There was little sign of such a turnaround for Trinity Mirror in its annual results, published on Monday. Like-for-like revenues were down 8.8pc, compared with a decline of 8pc for the prior year. The first two months of 2018 were down 9pc.
Cost-cutting across Trinity Mirror’s existing national and regional titles failed to keep profits up. Adjusted for one-off expenses including bankers’ fees on the deal with Mr Desmond, and stripping out pension finance fees, pre-tax profit was ?122.5m, down 8pc.
Mr Fox’s pay package rose to ?893,000, from ?749,000 in 2016, as a long-term incentive plan paid out and his annual bonus was increased.
Most of the annual bonus was based on meeting an operating profit target, but Mr Fox missed out on another chunk after Trinity Mirror fell nearly ?10m short of its online revenue target.
Mr Fox said: “It is a tough environment but we have just made a major acquisition and I am personally very committed to making a success of it.”
See also:
Leave a comment
News
  • Latest
  • Read
  • Commented
Calendar Content
«    Сентябрь 2018    »
ПнВтСрЧтПтСбВс
 12
3456789
10111213141516
17181920212223
24252627282930