The Press Gazette is going into administration, probably tomorrow. Its largest shareholder, Matthew Freud, is not prepared to sustain the losses any longer and the staff have been told that they have received their final monthly pay cheques. They were paid for one day's work today and may well be paid tomorrow, but that will almost certainly be their last wages from the Freud-owned company, Press Gazette Ltd.
It is thought that the company is carrying debts of more than £500,000 and is losing something like £15,000 a week. With no prospect of income from a press awards ceremony, Freud could not continue trading at a loss. However, administration will provide a breathing space that will allow the magazine to continue publication and provide time for a buyer to come forward.
There appear to be two possibilities: a trade buyer or a consortium of newspaper and magazine publishers. Freud is thought to believe that the former is most likely. However, it is known that a number of national paper publishers and editors are eager to save the magazine by forming some kind of industry-wide trust. At present, only national papers appear to have shown enthusiasm, having been impressed by approaches from the PG's editor, Ian Reeves.
They evidently hope to provide interim funding and, in order to place the magazine on a business footing, they have already sounded out Roger Eastoe, the former Mirror group managing director, to oversee the magazine their behalf. He worked for six months as commercial director at Press Gazette when Freud and the former Daily Mirror editor Piers Morgan bought it in June last year. Eastoe, who I couldn't reach for comment, is understood to have a clear idea about how the magazine might cut its losses. This might possibly involve a tie-up with the Press Association.
The difficulty with the trust idea is that there has been far less interest shown thus far by magazine and regional newspaper publishers. While it is thought the magazines will come on board, regional publishers are much more hesitant. Several regional companies are already committed to expanding the coverage of the industry through the Holdthefrontpage website, and they therefore view Press Gazette as a rival, especially due to its increased internet activity in recent months.
Meanwhile, the future looks very uncertain just now for Reeves and his 10 journalistic colleagues. A further eight staff are also affected. As for Freud and his fellow shareholders, there is an acceptance that they are going to lose their investment. As one told me: "I guess we were naive, but we acted for the best possible motives, despite what some editors believe, notably Paul Dacre. And we sincerely wish the best for the magazine."
