Here's an enterprising piece of journalism that has resulted in what many will surely consider an astonishing revelation.
When Johnston Press chief executive, Ashley Highfield, said that "every one of our newspapers are profitable", it set Patrick Smith thinking.
Surely a standard weekly title in Johnston's vast empire would be finding it difficult to make ends meet?
So he obtained the profit and loss figures "from a reliable source" for one of the publisher's typical 175 weeklies. It has a circulation of about 10,000, but that's all he's saying. He isn't naming the title.
Looking at the monthly figures for the second half of 2011, he found that the paper made advertising income of £70,000, circulation income of £17,000 plus online revenue of £3,600. That's a total of £90,600.
As for costs, the biggest expense was for editorial and commercial staff at £28,000 (of which £16,000 was for editorial). Then there was a further £10,750 for printing costs, premises and distribution, making a total of £38,750.
The result: a profit of more than £51,000 in one month, which means more than £600,000 over 12 months.
He concedes that the total doesn't include the shared costs that all big businesses have to bear, such as IT, human resources and editorial technology. Therefore, it's tough to calculate the real profit margin.
But, as he notes, "that's not an insignificant amount of money". And he adds: "Two things scream out from these figures: Johnston, like its industry peers, has been ruthless in cost-cutting. The entire editorial budget is barely £16,000 a month, which means not many people are doing a lot of work."
There is much food for thought here, and quite a number of questions. Is the paper chosen by Smith an unusual case? And what about weeklies owned by the other big publishers, such as Trinity Mirror, Newsquest, Northcliffe and the Tindle group? Are their figures comparable?
More importantly, is it justifiable to cut editorial jobs in order to maintain the "healthy" 20% margins that Highfield says every newspaper in his group is achieving?
Sources: Media Briefing/paidContent/InPublishing
