Interim examiner appointed to Sunday Business PostThursday 07 March 2013 22.03
The High Court has appointed Michael McAteer of Grant Thornton as Interim Examiner to Post Publications Ltd, owners and publishers of the Sunday Business Post.
The court was told the paper had a reasonable prospect of survival subject to a number of conditions.
However, up to 25 voluntary redundancies may have to be sought towards the end of this year and further pay cuts have been proposed.
The court heard it was crucial the paper published an edition this week to maintain confidence of advertisers and consumers, as failure to do so would be near fatal to its survival.
New printing arrangements are being negotiated following the insolvency of TCP, the print subsidiary of Thomas Crosbie Holdings.
The Sunday Business Post employs 76 people, with an average of 120 freelance contributors.
It has a readership of 140,000, which accounts for 10% of the overall Sunday broadsheet market.
The court heard until the recent failure of Thomas Crosbie Holdings, it was part of a leading Irish media business and was funded by TCH's borrowings from AIB.
This funding could no longer continue, but the bank had pledged to support Post Publications during the examinership period.
It suffered a drop in revenue of 53% between 2007 and 2012 from €15.6m to €7.3m.
The cause was largely due to a drop in advertising revenue, which fell by 68% during that time.
The total advertising spend in the Irish market dropped by 51% between 2007 and 2011.
The paper also suffered a drop in circulation revenue of 26%, from €4.9m in 2007 to €3.69m.
The court heard the company had responded to that decline with a rationalisation and restructuring, including efforts to reduce its cost base.
Pay cuts had been taken by staff and the cost base was reduced by €3.27m or 28% in 2009.
Payroll accounts for 47% of the cost base and this has been the subject of ongoing review.
A pay cut was agreed in June 2010, which yielded savings of €300,000 per year, and a further pay cut the following November made a saving of €150,000 per year.
Management has proposed a further pay cut of 7%.
An independent accountant's report said the paper had a reasonable prospect of survival if a number of conditions were met.
These included the support of AIB, new investment and the implementation of a cost reduction programme involving the renegotiation of its lease and the re-basing of printing costs.
Mr Justice Peter Kelly said the goodwill of staff would be essential to the process.
He was satisfied the petitioners met the criteria required for the appointment of Mr McAteer as interim examiner.
The case returns to the court on Friday of next week.
Earlier, the National Union of Journalists expressed concern for the future of the newspaper.
Speaking on RTÉ's Morning Ireland, NUJ Irish Secretary Seamus Dooley said he was concerned for the Sunday Business Post, but that there was an air of optimism about its future.
Today's move would bring a degree of certainty, he said.
He also said the Sunday Business Post was a very good paper, with a very good online strategy, which could be the key to its future.
On the future of the newspaper industry, Mr Dooley said there is still a huge demand for print editions of newspapers, but that there needs to be a wider debate about print and electronic media.
The Government also needs to look at the issue of concentration of ownership, he said.
If TCH had failed, he added, "huge swathes" of the country would have been without regional newspapers or local radio.