The Cost of Free News: £17m

(Pic from The Guardian)

Publishing is not an easy business to be in, and anyone hoping to get into the black within the first year, or for the next four, can just forget it. It’s not a quick-profit scheme, that’s for sure; if you wanna launch a print publication this year, find yourself someone with deep pockets filled with lotsa, lotsa cash.

The news that Rupert Murdoch’s freesheet The London Paper posted losses is hardly any surprise, but it’s got a long way to go before getting back into black. The good news–if you can call it that–is that the remaining established publications in his stable are posting reduced losses, but the numbers are still staggering.

From The Guardian:

The cost of distributing nearly 1 million free evening newspapers in London was revealed yesterday as it emerged that Rupert Murdoch’s freesheet, the London Paper, lost nearly £17m in its first 10 months of publication.

Filings from other parts of Murdoch’s UK newspaper empire showed that the Times almost halved its losses last year, while the Sun and the News of the World saw turnover slip by £20m amid falling sales. According to accounts filed at Companies House, the London Paper recorded a pre-tax loss of £16.8m in the 10 months from its launch in September 2006 to the end of its financial year in June 2007.

Meanwhile, the latest accounts for Times Newspapers, the owner of the Times and Sunday Times, showed that pre-tax losses almost halved last year from £81.8m to £43.9m as the papers took a reduced hit on the cost of redundancies at its printing operations. The costs associated with laying off staff as News International spends £650m moving its printing operations to three new purpose-built plants were down from £31.3m to £6.3m.

Improved circulation revenues and a reduction in costs also contributed to the improving financial picture, while turnover was up £11.1m or 2.5% to £447.2m.

These results draw a line under a costly period for Times Newspapers in which annual losses increased fivefold from £16.3m in 2002 to more than £80m in 2006, as the company swallowed the cost of changing the Times to a tabloid and News International’s printing upgrade.

At News Group Newspapers, the publisher of the Sun and the News of the World, turnover fell by £20m to £623.3m last year as the papers suffered from falling sales and a price-cutting campaign in Scotland, which has since been extended to London and the south-east, with the result that only about 70% of the Sun’s total sale is now at the full rate of 35p.