When the Irish Times recently published its accounts for 2015, they showed an operating loss of €1.1 million on turnover of €83.6 million. That was bad compared to the previous year, when it made a profit of €800,000 on slightly lower turnover of €83.3 million.
The Irish Times itself had an article about these financial results and the reasons for the loss. Ad revenue was up, but circulation revenue was down and so was contract printing revenue. Payroll costs went up as the company focused more resources on digital content and digital subscriptions.
We decided to follow up with a few questions for Irish Times Managing Director Liam Kavanagh.
Q. After 2015’s €1.1 million operating loss, a 29 July Irish Times article paraphrased you as saying the company would reduce costs. Will there be layoffs or any other sort of staff reductions? If so, how many, what types, and when?
A. We have set ourselves a target to reduce costs including payroll costs. There is no specific plan as yet except for a freeze on recruitment.
Q. If the group’s spending on wages and salaries in 2015 was €30.2 million, and there were 444 staff, that’s an average of about €68,000 a year per staff member. Is that the right level, would you say?
A. The average wage and salary cost per employee in 2015 was €68,137 (2014 €67,445). The average total cost per employee in 2015 was €84,704 (2014 €80,012). These numbers are taken from the published accounts.
Q. Is it time to cut some highly paid managers and executive/senior editors in favour of investing in the core low-level staff – reporters, production editors, advertising sales people, etc. – who make the company run day to day?
A. We have made significant investments in supporting new staff positions in digital journalism, development and design, customer care, video and podcasts, general reporting and graduate roles over the last two to three years.
Q. The 29 July Irish Times article said the company now has 45,000 subscribers. How many of those are digital-only, and at what rate are digital-only subscriptions growing?
A. We don’t break that number down as its commercially sensitive. Since the launch in February 2015, the number of digital subscribers has grown every week.
Q. Why is the Irish Times sticking with a semi-open model for the website? Why not go for a solid paywall like the Sunday Business Post?
A. We are happy with the approach taken and will continue to try to develop this with new services including premium content.
Q. Is there a large enough market for the Irish Times’ type of serious journalism to support the current costs of producing it, or does the company need to change the type of journalism it’s doing, as well as adjusting its business model?
A. The objects of the Irish Times are clear about what the ethos and approach of the Irish Times should be and there are no plans to change that.
Q. The Irish Times has sometimes runs “advertorials” that look like articles but are paid for by advertisers in the print edition without labeling them as such (these same articles online are labeled “sponsored”). Do you think that undermines readers’ trust in what they read in the paper?
A. There should be no issue with such content as long as it is clearly signposted to the reader. We have very clear guidelines and the editor will continue to have the final call if concerns are raised.
Q. What percentage of the company’s advertising revenue comes from advertorials/sponsored content now, and how do you see that changing in the next five years?
A. We don’t break that number down as it’s commercially sensitive. All media forecasts suggest that sponsored content will take a higher share of total advertising spend over the next five years.
Q. Is it possible for the Irish Times Trust to sell the newspaper? Under what circumstances might this happen?
A. No. The principle object of the Irish Times Trust is to publish the Irish Times. If it is no longer possible to secure publication then the High Court are required to oversee a sale to a person, firm, body corporate who can promote the publication of the Irish Times in accordance with its objects and who is capable of and committed to discharging such obligations of trust. I paraphrase here from the articles of the Irish Times Trust … the relevant section is article #2(d) (iv).