Local news groups warn titles will close without further aid

The local newspaper industry has called for the government to provide a financial rescue package to prevent more titles from going bust, as the pandemic has slowed its long-declining flow of revenue to a trickle.

In the past month, over 50 titles such as the Milton Keynes Citizen and Brighton & Hove Independent have stopped appearing in print, with trade group the News Media Association warning that more will follow suit unless the industry receives further support.

“Advertising revenues, already under challenge from the tech giants, have plummeted as a result of the coronavirus lockdown, and steps need to be taken urgently to prevent more local titles going out of business,” said the NMA’s deputy chief executive Lynne Anderson.

Britain’s newspaper industry is facing an unprecedented crisis with national newspaper sales falling by over a fifth between the middle and end of March, according to data from distributor Smiths News previously reported by the Financial Times. 

The industry has, among other things, asked for the business rate holiday, announced as part of chancellor Rishi Sunak’s £350bn rescue package in mid March, to be extended to news publishers and a planned removal of value added tax on digital publications to be moved forward.

The NMA told the government in a letter sent late last month that publishers could not understand why some businesses such as tanning shops and estate agents were granted a rates holiday, while local newspapers were not.

It has asked for a “significant” amount to be spent on newspaper advertising, which the government agreed to, announcing a public information campaign on the Covid-19 pandemic two weeks ago.

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The “historic” collaboration — which covers local and national titles — will be worth roughly £35m to the industry, according to Enders Analysis, the media research firm, which has estimated that newspapers will see advertising revenues more than halve year-on-year.

Simon Bax, executive chairman of the Norwich-based publisher Archant, called the government’s advertising campaign “helpful” but said it should not be viewed as a subsidy, but as a service for the government trying to reach local communities.

He also argued the money, out of which roughly £18m will be spent with local publishers, would not be enough to tackle the unprecedented fall in circulation and advertising revenue, which has prompted many groups to furlough staff and cut costs.

“I think you’ll start seeing companies that own newspapers going out of business before the end of the summer,” Mr Bax added.

With the looming recession likely to hit advertising budgets, Enders estimates that the newspaper market is set to lose “at least” £550m.

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