|Alun Davies MS||Yn dirprwyo ar ran John Griffiths|
|Substitute for John Griffiths|
|Carwyn Jones MS|
|David Melding MS|
|Helen Mary Jones MS|
|Mick Antoniw MS|
|Alan Edmunds||Reach plc|
|Martin Shipton||Undeb Cenedlaethol y Newyddiadurwyr|
|National Union of Journalists|
|Pamela Morton||Undeb Cenedlaethol y Newyddiadurwyr|
|National Union of Journalists|
|Paul Rowland||Reach plc|
|Manon Huws||Cynghorydd Cyfreithiol|
|Martha Da Gama Howells||Ail Glerc|
|1. Cyflwyniad, ymddiheuriadau, dirprwyon a datgan buddiannau||1. Introductions, apologies, substitutions and declarations of interest|
|2. Ymchwiliad i effaith pandemig COVID-19 ar newyddiaduraeth a’r cyfryngau lleol||2. Inquiry into the impact of the COVID-19 outbreak on journalism and local media|
|3. Ymchwiliad i effaith pandemig COVID-19 ar newyddiaduraeth a’r cyfryngau lleol||3. Inquiry into the impact of the COVID-19 outbreak on journalism and local media|
|4. Papurau i'w nodi||4. Papers to note|
|5. Cynnig o dan Reol Sefydlog 17.42 i benderfynu gwahardd y cyhoedd o weddill y cyfarfod||5. Motion under Standing Order 17.42 to resolve to exclude the public from the meeting for the remainder of the meeting|
Cofnodir y trafodion yn yr iaith y llefarwyd hwy ynddi yn y pwyllgor. Yn ogystal, cynhwysir trawsgrifiad o’r cyfieithu ar y pryd. Lle mae cyfranwyr wedi darparu cywiriadau i’w tystiolaeth, nodir y rheini yn y trawsgrifiad.
The proceedings are reported in the language in which they were spoken in the committee. In addition, a transcription of the simultaneous interpretation is included. Where contributors have supplied corrections to their evidence, these are noted in the transcript.
Cyfarfu'r pwyllgor drwy gynhadledd fideo.
Dechreuodd y cyfarfod am 09:30.
The committee met by video-conference.
The meeting began at 09:30.
Bore da, bawb, a chroeso cynnes i'r cyfarfod yma o Bwyllgor Diwylliant, y Gymraeg a Chyfathrebu Senedd Cymru. Hoffwn i groesawu fy nghyd-Aelodau wrth ddatgan ein bod ni wedi cael ymddiheuriadau oddi wrth John Griffiths, a dŷn ni'n falch iawn o groesawu Alun Davies i ymuno â ni heddiw. Croeso cynnes i chi, Alun.
Yn unol â Rheol Sefydlog 34.19, dwi wedi penderfynu gwahardd y cyhoedd o'r cyfarfod yma er mwyn diogelu iechyd y cyhoedd. Mae'r cyfarfod yn cael ei ddarlledu yn fyw ar Senedd.tv a bydd yna drawsgrifiad yn cael ei gyhoeddi fel arfer. Ar wahân i'r pethau mae'n rhaid i ni eu gwneud gan ein bod ni'n cwrdd trwy fideo, mae pob Rheol Sefydlog arall y pwyllgor mewn lle. Bydd y cyfarfod yn cael ei gynnal yn y ddwy iaith ac mae cyfieithiad o'r Gymraeg i Saesneg ar gael. Gaf i ofyn i'm cyd-Aelodau a oes yna ddatganiadau o fudd? Nac oes. Felly, jest i atgoffa'r pwyllgor, os oes unrhyw beth yn mynd o'i le gyda'm darpariaeth IT a fy mod i'n gorfod gadael y cyfarfod oherwydd hynny, bydd David Melding yn camu mewn fel Cadeirydd dros dro nes ein bod ni'n datrys y problemau technegol.
Good morning, everyone, and a warm welcome to this meeting of the Culture, Welsh Language and Communications Committee at the Welsh Parliament. I'd like to welcome my fellow Members in stating that we've had apologies from John Griffiths, and we're very pleased to welcome Alun Davies to join us today as a substitute. A warm welcome to you, Alun.
In accordance with Standing Order 34.19, I have determined that the public are excluded from attending the committee meeting in order to protect public health. This meeting is being broadcast live on Senedd.tv and a transcript of the meeting will be published as usual. Aside from the procedural adaptation because we're meeting by video, all of the other Standing Order requirements for the committee remain in place. The meeting is bilingual and simultaneous translation from Welsh to English is available. Could I ask my fellow Members whether they have any declarations of interest? No. And just to remind the committee, if anything goes wrong with my IT and I have to drop out of the meeting because of that, David Melding will step in as temporary Chair until we resolve those technical problems.
A gyda hyn, fe wnawn ni symud at eitem 2 ar yr agenda, sef tystiolaeth ynglŷn â sut mae'r feirws wedi gweithredu ar newyddiaduraeth yng Nghymru.
And with that, we move on to item 2 on the agenda, which is an evidence session on how the virus has impacted on journalism in Wales.
I'm very pleased to welcome our first two witnesses: Alan Edmunds and Paul Rowland from Reach plc. Thank you, both, very much for being with us today. And if you're ready, we'll go straight into questions, and if I can call David Melding first.
Diolch yn fawr, Cadeirydd. I'd also like to thank the witnesses for appearing at short notice. But I know you'll agree with me that the Western Mail in particular has a unique place, really, in the history of the modern Welsh nation, and since devolution, in providing, really, the most consistent and outstanding political and economic commentary and analysis. It would be an enormous loss to the quality, I think, of our scrutiny and reflection on Welsh political life if we lost the Western Mail or it was, you know, depleted in terms of providing that quality commentary and journalism. I know colleagues will talk about that when they put their questions.
My questions, really, I think, to be fair to you and your company, we do need some understanding of how COVID has impacted your profitability and the business model at the moment. I think we would be grateful to hear succinctly that context.
Well, first of all, thank you very much for inviting us today and thank you very much for your question, David. As you know from previous discussions that we've had at similar committees in the past, the sector has been structurally challenged for a long time; so much change in the industry because of the impact of digital. And the impact of the pandemic has been something like we've never experienced before. I know you've heard from other witnesses about the incredible effect that it's had on revenues, and inevitably, therefore, we've had to look—on top of the issues we were already looking at, the structural issues—at how we respond to the challenges that the pandemic has faced.
So, a massive impact on our trading and on our revenues, and as a result of that, we've worked on plans to transform the business to make sure that, for all stakeholders—so, that's for our customers, our staff, our shareholders, our pension holders—for all stakeholders, that we're making sure that the business is in the best shape it possibly can be to meet those challenges. And I'm sure Paul would like to add a few things specific to Wales.
Yes, well, of course, as Alan says, the impact on our operations has been significant from a trading perspective. You know, at the height of the pandemic, the number of our regular local advertisers who weren't trading, never mind spending on advertising, was very significant. Of course, many shops were closed, leading to real difficulties in people accessing opportunities to buy printed titles. So, it's affected every part of what we do.
I know that previous sessions of evidence have heard of the enormous audience appetite during this time, and it's been a very difficult issue to balance, the enormous audience interest at this time, and I would agree with commentary that has highlighted the impact on awareness of devolution in Wales that's been brought about by the differences in lockdown measures between England and Wales in particular. And so, trying to balance covering such an enormous story with such a difficult trading environment in the background has been very challenging, and will continue to be very challenging, but, as Alan says, we're in a situation where we need to transform the business to protect it for the future, but protecting it for the future, in regard to David's opening remarks about the importance of the Western Mail, to which I'd add the importance of our other titles to the communities they serve as well, means creating a structure that protects those for as long as possible.
That does involve ensuring that we use our scale to produce them with greater degrees of efficiency as the revenues in those sectors become challenged. But protecting the profitability of those titles protects those titles for the long term, and it's absolutely in our interest as much as it is in everyone's interest who reads the Western Mail and our other titles that we protect their health and their future for the longest period possible.
I understand that media, particularly print media's been going through this remarkable revolution, I think, in the last 20 years, and I think it has been a revolution. It's the only way of describing something so fundamental. So, you've got that going on, but I suppose it would be helpful for the committee to know how much of an additional factor is COVID, or is it just accelerating, perhaps, some trends that were already there. Does COVID itself introduce new and, in your estimation, probably permanent challenges, or like the Bank of England and the UK Government, do you think that once the COVID situation is resolved, in terms of if there is a vaccine, for instance, at some point next year or in the relatively near future, we will go back, basically, to the pre-COVID situation, or do you think, 'No, COVID would itself have transformed things also'?
Obviously, it's very difficult to predict exactly what will happen, but at the height of the COVID impact, around 80 per cent of local advertisers weren't advertising. You will know that the small and medium enterprises, the impact on the business sector, the local business sector in Wales was very substantial, and obviously, therefore, that impacts on us as well. We're obviously monitoring the situation closely all the time, so that we're working very closely with those businesses to try and help them through the pandemic as well, so, in other words, to see what their needs are from us, what their advertising needs are, and to work with them to help them come out of it, David. So, it's very difficult to predict the future, but what we have to do, obviously, is work very closely with all our stakeholders to try and make sure that, as Paul said, all of our platforms—so, our digital and our print platforms—thrive.
To your point about the Western Mail, I was editor of the Western Mail for 13 years, so obviously I know that paper incredibly well. I totally understand its importance to Wales, and it's a very, very important title for us, obviously, and we care passionately about it.
No, Alan's covered the main points there. As I say, we have to be in a position where we are confident that we have a structure that will weather whatever storm comes from now. As Alan says, it's impossible to predict that. But just to add to his point: I started my career on the Western Mail; like Alan, it's a title I have a long history with, care passionately about, and like all our staff, it's not something we're going to throw away lightly at any point. It's something where we're going to work extremely hard, no matter how challenging the environment, to create a model that allows it to flourish and to continue to play the important role that it does in Welsh society.
Again, I'm exploring context here: the UK Government—like, I think it's fair to say, all Governments across Europe and North America and further afield—have pursued a policy to offer companies extensive support so that structural, permanent damage is not done to the economy. So, in other words, companies are helped until we get into the post-COVID situation and then the long-term business decisions are made at that point, rather than being made now in a crisis and being much more severe than would be warranted by a more long-term look at the likely business situation as it develops. So, is that your strategy, to do the minimum in terms of the COVID situation in how you adapt your model, and wait for as long as possible, like most other large companies, until we are further through this crisis before big and permanent and irreversible decisions are made that we just won't be able to change in the future, so they get locked in now at the maximum point of crisis?
We are always reviewing our business and looking at what change is needed to meet the needs of our audience and customers. So, what we're doing now, as I said, is a plan to transform the business on the issues with which we are faced. Because of the structural changes, we inevitably have made a lot of changes in recent years, and the next few years would be no different. The pandemic has accelerated change for most businesses because of the severe impact that it's had, and then obviously changes that might have been made perhaps over a longer period across many industries are now being made at this time. So it is accelerating change, but the changes are crucial for many reasons, and that's why we are transforming the business to make sure that we meet the market conditions and that we meet the demands of our audience in print and online.
Chair, my final question is just how useful furloughing schemes have been. Now, presumably with journalists that's not terribly helpful, as we want journalists to be active, particularly at a time like this, but I suppose for more behind-the-counter and advertising staff and such, furloughing is helpful. I'd just like an idea of how much you've used it, and this committee—well, I hope I'm not giving too much away, Chair, but I think this committee's of the view that furloughing probably needs to continue after October, at least in certain sectors, and I do note that today's Financial Times, in its commentary, states this quite clearly: that if furloughing does come to an end in October, an abrupt end, then a lot of capacity in the economy is at risk. So, how useful has furloughing or one of the other big schemes been to you, and would it help if it were to continue, say, until next spring?
Furlough money was key in ensuring that we were able to keep all our employees on the payroll while we undertook the major exercise of reorganising our business. It's been an excellent scheme and if it were extended we would welcome that, as I'm sure many businesses would. A more profitable Reach can protect its local news titles while continuing to develop its digital operation. So, yes, the furlough scheme, we have used it very effectively and it was very welcome, and was important, I think, across many industries in helping us navigate through these times. Furlough ends soon and we need to plan for the future on that basis, because we have to provide a stable platform for the business over the long term.
Thank you. Thank you, David. I'll bring Carwyn Jones in now, if I may. Carwyn is still muted. Can we—
I've unmuted myself. I've seen the message.
Good morning, both, and thank you for joining us again at short notice. Lightheartedly, I just wonder—this is a rhetorical question—how much use the Western Mail has made of the extensive plug that it gets in the film Mr Jones. [Laughter.] You may have seen it, but it's certainly given a great deal of publicity in what has become a very popular film.
But, anyway, to turn, perhaps, to the more serious questions, a quick-fire three questions from me first—perhaps for you, Alan. Firstly, how many staff in Wales are at risk of redundancy? What are the expected job losses in Wales? And thirdly, I understand that there are plans to merge Media Wales with the English midlands division of Reach. How does that work in terms of Wales being noticed? Does that mean the midlands becomes part of Wales, or the other way around?
If I take the last one first, Carwyn, we're not merging Wales with the midlands. Wales, editorially, is run by Paul, who is in this session with us. All the editorial accountability stays in Wales. The midlands and Wales combination is for purely operational reasons and logistical and financial. It's got absolutely no impact at all on the way we work editorially. So, there is no change to the fact that all the Wales editorial decisions are made in Wales and run by Paul. Paul previously reported directly in to me; Paul still reports in centrally, so there's very little change in the way that we run anything from that perspective, and certainly there's no merger of Wales and the midlands from an editorial perspective. It is merely a behind the scenes, logistical change that we've made.
I'm grateful for that clarification, first of all, but you mentioned it's a logistical and not an operational change. What does that mean in terms of sufficient resource being made available to Media Wales if it's competing with a part of England?
Again, there's no change there. So, the budget that Paul had before—. Paul is still in charge of the Wales budget. This is more operational from the point of view of how we report our figures in and how we, for example, organise print production. So, in other words, the Wales and midlands print production operations—that they can support each other so that we become more efficient, should that ever be needed. And there are therefore some supply and logistical issues behind that, but nothing has changed materially at all in terms of decision making or budgets.
Before I bring Carwyn back in, can I just ask you a bit further on that? Has consideration been given, or could consideration be given, to rather than—and taking the points you've made very clearly that it's not a merger with the English midlands, but you can understand why people are concerned about it—. Has consideration been given instead to merging, for those kind of purposes, all the Reach businesses in Wales and creating a sort of Wales Reach, rather than having bits of the business relating to different bits of the business in England? And would there be any possibility of that being given consideration, do you think?
Yes, we do consider that, over time. The north Wales business has traditionally been part of our north-west business. You will know that the Daily Post, the Welsh Daily Post came as a result of an edition of that title in the north-west. So, it's always been part of that business, but from time to time we review that, and we would continue to review that in the future.
And would it be possible to include that consideration in this review, because, obviously, in the context of devolution, you're thinking about creating content that is common across titles. Well, there would be a lot of potential content in terms of Welsh political coverage, Welsh cultural coverage that would be relevant to Daily Post readers as it is for people who read the Western Mail.
Of course and, editorially, that already happens, so I'm sure Paul would explain that, editorially, the co-operation with the Daily Post and the content sharing has happened for many years. So, to my point, really, I was talking about when we're talking about working with the midlands, that's purely background, logistical.
Yes, thank you. Again, from me, what—? It's difficult with the way things are at the moment, with the trend in print media, but what assurances can you provide about the long-term sustainability of the Reach print titles in Wales?
I'll go first and then I'll hand over to Paul, and Paul could also perhaps address your questions on the numbers, Carwyn, that I didn't get a chance to answer, as I took the last question first.
In terms of our print titles, we have a very successful model of using our scale to keep our daily titles daily, and to keep our weekly titles thriving, and that's been tough. There are a lot of challenges, as you know, in the market as the audience moves to read online. But we're committed to those titles, and we do everything we can to give them the best possible future, and we work very hard at coming up with the best operating models to allow us to do that. Paul, you could probably give a bit more detail about how we do that in Wales, as well as explaining the number of potential redundancies, perhaps.
Yes, we work very collaboratively as part of the team, whether that's within the areas we cover in south Wales in the Media Wales area, which has enlarged, obviously, in recent years with the acquisition of Local World Holdings Ltd, and therefore bringing in the South Wales Evening Post and the weeklies in Carmarthenshire into our stable. And that was a transformation of the business that allowed us, again, to extend our operation but also improve our efficiency in our modes of production. And also, we have extremely close relationships with the Daily Post—to your question, Chair, about organisation within Wales. So, the design and subbing operation of our newspapers is already run on an all-Wales perspective. So, north and south Wales are involved in the same hub as part of that. So, there is a great deal of co-operation and collaboration across the piece.
One of the key elements of that that already happens is copy sharing between north and south Wales. I know our political coverage produced in south Wales is of great value to the Daily Post, but equally coverage of courts, breaking news stories from north Wales is made use of by our titles in the south, particularly WalesOnline. And then, as part of the new structure that's been proposed is the creation of what's called the 'Reach wire', which will facilitate greater copy sharing across the whole company. That has been painted in some parts as a move towards more generic content; actually, I think the opposite. It will be true in lots of cases where—. For instance, if there's a Welsh person in Manchester Crown Court today, our colleagues on the Manchester Evening News would cover that, and it would give us access to that story, which, obviously, would be relevant to Wales in a quicker, cleaner manner than currently is possible. So, we do use our scale where it's effective, and there are lots of advantages to that, and I think it's inaccurate to just paint that as something—as has been as part of the commentary on these changes—that just necessitates a greater degree of generic content.
In terms of the numbers, they've been documented widely. So, across the north Wales and south Wales areas of the business, around 90 journalists are at risk. We employ around 140 journalists in Wales, and 90 are at risk. It's likely—obviously, we're still in consultation at the moment and these numbers are subject to change—around 20 to 21 roles will go with the culmination of the process but, obviously, we're still in consultation about that process. Our plans involve ensuring we're still able to produce very high quality news titles in digital and in print at the culmination of that process.
What I'm looking for is an assurance as well that we won't see a diminishing of Welsh content, either in quality or in volume. We know that many people read, for example, the Western Mail because the sports coverage is very good. A lot of people would get political coverage from the Western Mail as well. Certainly, politics is not an area that, perhaps, presents itself as a great market for advertisers in terms of political news as it does for sport, but the concern I have is the weekly papers—the old Celtic Press papers. I have the Glamorgan Gazette in Bridgend. It once had an office in Bridgend with seven reporters; now it doesn't even exist as an office. It exists in Bridgend but it's barely here. The content now is nothing compared to what it used to be. It's mainly advertising. There is local reporting—that's true—but not anything like the scale that it used to be. That concerns me in terms of what might happen then to the Western Mail and with the other Welsh titles. Can you give me a guarantee that we won’t see a diminution of serious content—if I can put it that way—and also a diminution of local content in favour of something far more generic?
If I could just pick that up, just to come to the print titles, one area of our business that's been conspicuous by its absence so far is WalesOnline, which has, over barely a decade, become one of the biggest news brands in the country, in the UK, read by an enormous audience across Wales on a very regular basis. So, we are providing a very extensive amount of quality Welsh news on a wide range of topics to a very large number of Welsh people. So, irrespective of what happens to our print titles, which, as we've said a number of times already, are very, very important to us, and will continue to be for years to come, it's also important that we reference what we've done to make sure that those communities who may have been served differently by our print titles in the past are continuing to have access to local news through those platforms and through our hyperlocal platform, In Your Area, which has around 400,00 users in Wales as well.
So, just to pick up on your point about our weekly titles, we wouldn't attempt to claim they're still on the same scale as they once were, but neither are the revenues attached to them. We have to make decisions around how we produce those papers relative to their profitability, and the measures we have taken over the past few years to harness our scale and to use the scale of our business and the efficiency of our business keep those titles with us and, hopefully—. The last thing we want to do is close titles, and the more we can protect the profitability of any titles—the weeklies or any others—the longer we can keep them going.
Certainly, in terms of the Western Mail and the changes we've made—David's comments at the start about its quality were very welcome—through a great degree of structural change over the past 10, 20 years, we've managed to retain a great degree of quality by using what we do well structurally and applying what we know well journalistically, and that would be the assurance I could give you, for years to come, that we'll continue to try and do that.
Thank you. Before I bring Carwyn Jones back in, Alun Davies, I think you've got a supplementary to this, specifically.
Yes, and I'm grateful to you for that, and I'm grateful to Mr Rowland for his answer to that, but it's not really true, is it? Because my experience reflects Carwyn's experience, in that you've hollowed out the Celtic titles over the last decade or so. When I was standing for election in Blaenau Gwent, I'd be queuing to buy the Gwent Gazette on a Wednesday. Nowadays, I think, last year, I bought it twice. It's irrelevant to me—completely irrelevant—and it's been made irrelevant by the failures of management of that title. I've watched people in my hometown, in Tredegar, walk away from the Gwent Gazette because it's no longer relevant to their lives; it's local sport results from the Rhondda, and, as much as I like the Rhondda, that's not why I would buy a local newspaper in Tredegar. So, your failures, frankly, have meant that the local news that created the platform that you've both discussed in earlier answers, over the last 10 years, has hollowed out the ability of people across large parts of south Wales to talk with each other and to understand the places in which they live, and to quote WalesOnline as an alternative, frankly, is laughable. The last story about Blaenau Gwent, which is under the 'Blaenau Gwent' section of WalesOnline, was published on the seventeenth of last month. Now, that isn't weekly, local news—one or two stories every few weeks. That does not replace the forum for discussion and debate and for news that we used to enjoy with the Gwent Gazette.
I'll bring you in to respond to that now, but can I just remind Members and witnesses that we've got a maximum of another 15 or so minutes, and we've got a number of areas that we want to cover? So, I will give you an opportunity to respond, but if we can try and keep our questions and, where possible, responses fairly tight. Thank you. Paul Rowland, I think you wanted to come in there.
Yes. Thank you for the question. My view on that would be that the causal relationship you describe is not quite as it exists in practice; the causal relationship being that we remove the content and the revenue falls away is not how it works in practice. So, what we've done over the past few years is we've had to make difficult decisions on titles relative to their ability to drive revenues in a local area, and what we've had to do with the celtics in terms of some difficult decisions about how they're produced is relative to the way that the revenues have performed over the past few years, not the other way around.
I would add there's clearly been a sector shift away from print. You will have seen across the country many weekly print titles close. These titles haven't closed, but what we've done is manage the titles so that we're able to keep them going and then work very hard—which is a really crucial point—to start developing digital alternatives for those communities, such as WalesOnline and such as InYourArea. So, at that hyperlocal level, InYourArea is starting to resonate with our readers and that audience is growing very rapidly, and that's important—that as readers move online, we move with them.
Thank you. This is my last question, just to let you know. I'm looking at WalesOnline at the moment. Now, I don't like swimming through adverts; there are plenty of others who don't mind, and I accept that. I know this is a good business model for you and I know it makes money and I know you're not a charity—I understand that—but I never look at WalesOnline because I don't want to swim through adverts to get to the news.
I'm looking at the politics section at the moment, and it's not current—none of the stories have any dates on them. If we go down to the fifth story, for example, it's days old, and the only current story that I can find is one. The rest of them are stories that are not current, so why would I look at this section, for example, to find out news about politics? I know politics is not exactly a moneymaker in terms of journalism, perhaps, but this news isn't current, so, for me, I wouldn't look at it. Plenty of others are not interested in politics, they will look at other areas, and I understand that it's a successful business model—I don't criticise it—but I do worry perhaps that this is seen as the only business model.
Now, for a long time, Alan, you and I had a discussion about the Western Mail going digital, and it did, but I'm also subscribing to the Western Mail digital version, and I've got that in front of me. It's very difficult to read it. I'm looking at it on a full-size iPad pro, and it's a tough read because of its size. I just wonder whether consideration has been given to an alternative. If we look, for example, at the The Guardian platform, which is a newspaper but it's not set out as a newspaper digitally, it's easy to read, it's subscriber-only, so you've got your revenue and people like me who don't want adverts and want to get at the news not looking at adverts are also able to pay and get rid of the adverts. But at the moment, the choice is advert-heavy WalesOnline, or digital Western Mail, which is—you know, the print size is very, very small and probably unreadable on anything else other than a bigger screen. Has consideration been given, perhaps, to another alternative, which would be a way of raising revenue through a subscriber model?
So, there are a few different elements to what you've raised there, Carwyn. So, first of all, we have to recognise the enormous success of WalesOnline and also the crucial role it plays in Wales. Without WalesOnline, there would be BBC Wales and very little else nationally. So, I think the importance of recognising what WalesOnline has achieved in a very short space of time is an important point to make.
In terms of—you're describing the e-edition alternative that you can subscribe to. We're currently reviewing that. I agree that that is something where not just for the Western Mail but for all the titles that we've got—the future of our e-editions, again, is something we constantly review and that we can enhance and I understand—. So, we do speak to our customers and users all the time about their experience. So, we're always reviewing our e-editions and looking to enhance them. And then if the demand for reading the Western Mail in that type of way continues to grow, because it's been a fairly small demand on the e-edition route, obviously we would try and drive that demand and also to meet it as it grows. So, we do constantly review that. But I do think that the importance of the fact that we've got many platforms: print—so, you know, if the Western Mail is where your interest is, we try and serve that audience very well; WalesOnline; and then our hyperlocal InYourArea. And it's about us making sure that wherever people want to read us and in whatever form they want to read us, we listen to them. So, I'll listen very carefully to your feedback on that and thank you for giving it.
Thank you. I'm going to bring David Melding in, and after that we'll have to move on from this section. David.
Chair, you'll be relieved to know that Carwyn covered the point, but I would just amplify the importance of political journalism and quality commentary, and that simply doesn't appear, or not frequently enough, and certainly not prominently on WalesOnline, and that then constitutes a loss, really, of profound capacity for our democratic space.
I actually don't recognise that is the situation. So, if you take our coverage of COVID, for instance, we've led the way in terms of investigating the issues around the release of elderly patients into care homes with no testing. We're the only platform of any type who've live-blogged and live-streamed every minute of every Welsh Government press conference throughout the pandemic. We've covered extensively the issues and the fallout for schools and teachers and families around the decisions around the reopening of schools.
We have a team extensively pointed at national and local government politics, and our stance on that is to ensure we do that in a way that engages the public, because writing about politics for politicians—I appreciate it's of interest to this audience, but we need to ensure that the public are interested in how we present that information and engage with that. So, for me, reporting on child poverty in Penrhiwceiber and Butetown is politics, because it's the impact of policy, and that's the approach that we try to take to reporting politics. So, will you find verbatim coverage of Plenary sessions on WalesOnline? Not very often. Will you find the social impact of policy reported extensively through the human impact of them? Yes, you will.
Could I just add that a lot of—our whole transformation is based around a strategy that we call the customer value strategy, and that is getting closer to our customers, and we've set ourselves ambitious targets for customer registrations. We gave an update to the—[Inaudible.]—in July that we'd exceeded those, and that is where we have a deeper, stronger relationship with our customers. So, to Carwyn's point, if we understand what you want to read about, then we can try and deliver that to you, and that is a key part of our strategy; it is called a customer value strategy. And then in the same way, we are able to work even more closely with advertisers to give them very targeted and effective results. So, we are constantly trying to get closer to our customers. Digital allows you to do that, but we've also, therefore, got our print titles that we can use to achieve that aim. So, customers registering with us allows us to understand what they really want to read about, and then it also allows us to work more closely with our advertisers to give them—[Inaudible.]
I'll bring David Melding back, and then Carwyn Jones, very briefly, but then we must move on. David.
There is content there, but, frankly, without in-depth political journalism that's delivered by journalists—ideally those that have specific specialities as well, like health or education, as well as general politics—. And, you know, if you went on WalesOnline, when was the last time a Senedd committee report—and they're hugely influential, committee reports—got covered? And that's a problem. I mean, streaming a press conference isn't quality analysis, far less commentary.
I will bring Carwyn in now, and then ask you to respond to both their points. Carwyn Jones. You're still muted, Carwyn.
I can assure Paul that I'm not looking for verbatim reports of the Senedd or its committees; I understand that that's got a limited audience. But just a very quick point: I've just literally gone into WalesOnline, registered for news in my local area—Bridgend— Newcastle, the council ward I live in, and Cefn Glas, the one next door, and apart from houses for sale, the first story I see is 'Ebbw Vale neighbours celebrate People's Postcode Lottery win'. Perhaps I should pass that one on to Alun. So, it's not local.
So, if I can come in on these points. We could sit here all day picking holes in the things we don't like about WalesOnline, and what I think is absent in the discourse is any acknowledgement that we've built something that's very valuable to Wales. Lots of the conversation around the weakness of the Welsh media quickly leads to criticism of WalesOnline rather than what the real subject is, which is the absence of other media providers who seek to cover Wales as a nation as we do.
So, to David's comment, yes, there are reports from Senedd committee reports, but we will try to tell those through the mediums of the people they affect to make them engaging to larger audiences, and therefore engage people in the political process. So, I don't know how helpful it is to sit looking at random sections and saying, 'Well, this shouldn't be like this or this shouldn't be like that', when, actually, we have built an audience of significant scale covering Wales on a daily basis as a nation in a way that is not available in many other places.
I'm sorry, I have to come back on that. The issue of local news was raised by yourselves and I'm giving an example of where it doesn't work. I don't criticise WalesOnline, I think it's a very good business model, actually. I do understand the problems you're going through as an organisation and I certainly don't suggest that WalesOnline is something that you shouldn't have. I recognise the reality. The point I make is, with respect, that, of itself, it isn't a substitute for print media. Now, you may well say to me, 'Well, wonderful, but print media is not going to make money in the future.' That's a viewpoint but—
Just let me finish. The point I'm trying to make to you is WalesOnline is not the be-all and end-all in my view. It's good—I get that, it's a good business model, but there are other opportunities for you. Perhaps that's one I've just suggested to you that's there—[Inaudible.]
We'll let that stand as a comment because we do have a couple of other areas we must try and cover in the next 10 minutes. Can I bring Mick in, please, bringing us back to the position of business we're in now?
Thank you, Chair. Most companies will say that their biggest asset is their staff. How is it you've managed to lose the confidence of your staff?
Well, obviously we work incredibly closely with all of our staff all of the time. We engage with the National Union of Journalists and Martin, who gives evidence later—we engage very closely with Martin, and these are difficult times. So, you know, at times like this, all you can do is keep communication open, talk very closely to all your staff and make sure that everything you do is in collaboration as far as it can be. But when you're going through consultation with a lot of people who are affected by these difficult times, then these are obviously very, very hard times for our staff, for many of them—those who are at risk—and we understand that and we work very hard to treat them very carefully, sensitively and fairly through this process.
There are many companies all over Wales that are having to go through radical transitions for a variety of reasons, with job losses and redundancies, yet to have your journalists effectively pass a resolution of no confidence indicates that there is no confidence in the way the brands are being managed. What are you doing to tackle that?
Well, it's communication. As I said, it's always about explaining your ideas. These are very tough times, extraordinary times like we've never seen before, and we work extremely hard to communicate with our staff on that and to engage them through this process.
But isn't it the case, then, that that communication must have failed? Because to have a motion of no confidence from your journalists in a newspaper that's about journalism is a very dramatic and a very significant step.
Well, what we do is we speak to the union representatives and the other representatives at every stage. They obviously have very strong views on lots of issues, they have ideas that they put to us, and we engage with them in those ideas as well. And we're still in the middle of that process now. As I said, it's extraordinarily difficult and we understand how extraordinarily difficult it is for many people.
So, are relations improving between management and the National Union of Journalists?
We speak to—. So, obviously, throughout the country—. If you're talking about Wales specifically, then, for example, I spoke at length to Martin last week. Paul, you might want to add about the discussions that you have in Wales.
Yes, I speak to Martin multiple times most days, either on the phone or on e-mail, to discuss our plans and agree how we should move forward. We're in a consultation process, that's a collective consultation process, which means that Martin is, for Wales, the appointed representative to speak on behalf of all our affected employees, whether they're members of the NUJ or not. We have very regular, very amicable discussions about how we move forward. Clearly, there are points of difference about how we see the proposals, but we're working through that in a very professional and amicable manner.
I've personally known Martin for many years. I sat next to Martin on my first day at the Western Mail and we have a very good relationship, and we will work together, as we have done for many years in our respective roles, on ensuring that—you know, he represents the interests of his members and the staff he's representing in this process, and we try to operate change in a way that is acceptable to them.
So, are the consultations about the planned direction of the Welsh brands, or are they solely about financial issues relating to redundancy and numbers?
So, during consultation, we get ideas and proposals from members of staff. We also have, from some members of staff, positive feedback on the changes and how we're dealing with them. We work very hard at engaging with everybody, but yes—. So, proposals about doing things a particular way are regularly put forward as part of the discussion of what we've proposed. That's very common; we get a lot of that.
Have you had discussions with Welsh Government at all? The media's obviously fundamentally important to the democratic process within Wales, and obviously the role of Welsh Government in terms of the input that it makes into media, but also the relationship, it seems to me, is an important one. Perhaps you could outline what discussions have taken place and what's been the outcome of those discussions.
So, not recently, but in terms of whenever there's a taskforce looking at media, I've appeared several times to engage with that and to explain our position when I was in Wales, and I know, Paul, that you have since you took over.
So, has there been a specific discussion with Welsh Government about these particular proposals?
No. No. No.
No. No, that's not unusual. We would not normally discuss. And we're talking about changes not just in Wales but across the whole company. And in Wales—. So, if you take north Wales and Media Wales, then, as Paul has outlined, we're talking about a number of redundancies likely to be around 20, 21, which is obviously very regrettable, but it's not of the scale that some industries have seen.
But in relation to—. Aside from the numbers, which are obviously important to all those individuals, the impact on the changes to the nature of journalism within Wales surely would be something that would be of concern and of mutual benefit. Do you not think it would be appropriate to have had those discussions?
Well, we've never shied away from—. When I was in Wales, we always had an open dialogue with the Government, and whenever we were invited to come and speak to a committee we accepted that and we provided evidence on many times, on many occasions. And I know Paul, the same, has a very open dialogue and I think wrote—I think, Paul, you had some correspondence with the First Minister at the start of the pandemic.
Yes, I was in touch with—. I wrote to all of you, in fact, and the First Minister—some of you kindly replied to those comments—at the start of the pandemic to make sure you understood the impact it was having on us. These measures are, regrettably, an extension of that impact, at least in part. So, as Alan says, we have a very regular dialogue. A number of you may have visited our office, when we were not working in these environments. Our doors are open, literally and figuratively, to discussions with you at any time, and the Welsh Government at any time, about the role that they can play in the future of our business, and their input into how they think our business should run and our views on that as well, of course.
So, yes, we're very keen to have that dialogue. There were certain things we asked of the Welsh Government at the start of the pandemic, including extending the business rates holiday to news publishers, which didn't happen, which would have been helpful. But, yes, we're in regular contact and will continue to be.
I just want to explore one final point. In some parts of the UK and, in fact, more internationally, where papers and printed media have come under threat and so on, the issue of setting up alternative ownership models—co-operative models, mutual models, et cetera—has been explored and supported, in fact, by some companies. Has there been any discussion within your company to look at that as a potential model in some areas?
There are—. We're part of the News Media Association, and our discussions with central Government have been around the recommendations of setting up the digital markets unit, obviously, with the global tech platforms and the imbalance that has created in the market there from an audience and advertising perspective. The News Media Association, which represents the interests of national and local media, has backed the proposal for the digital markets unit, and we would urge that that is set up as soon as possible and that publishers are compensated for the content they provide. So, our engagement with central Government has been around that. It's very important, and we would urge swift action on it. That's the position that we've taken, along with the News Media Association.
Thank you. I'm going to have to bring Alun Davies in now, with more to say about the relationship with the Welsh Government, perhaps.
Yes, I'm grateful to you, Chair. Mr Rowland, I was interested to read your correspondence to this committee, where you appeared to be asking for support from the Welsh taxpayer, in terms of public notices and continued advertising, and payment from Government and local government on that. Reading your words, it seemed to me that you wanted the Welsh Government to show more faith in your publications than your own management. Is that fair?
Well, no, that certainly wouldn't be my analysis of it. It's not about—. It wasn't a question of faith in our publications, it was—. Clearly, there is a—particularly at the time of writing, at the start of the pandemic, there were moves being taken widely to support businesses that were badly affected by the situation, of which we were one, and—you know, not just us; other news publishers were as well.
On the business rates point, there were very small considerations that I was asking to be looked at, one of which being extending the business rates holiday to news publishers. That had already been extended to shops, including tanning salons and various other businesses, that wouldn't, probably, be seen as performing the same public duty as news publishers.
Then, on the public notices point, public notices have long been an incredibly important revenue stream that has supported local newspapers. I'm not asking—. I wasn't asking, in my letter there, for anything new to happen—just a continuation of something that has long been a very important pillar in supporting the production of local news.
So, it's not a question of us not having faith in our titles but asking the Welsh Government to. We have absolute faith in our titles, and, as we've made clear a number of times, they're extremely important to us. But it's important that we try to operate, find a model to operate, in constantly changing times. We continue to look at our products and how they work. We also need to continue to look at our revenue streams and how they function. And what I'm getting at there is that there is—of which this is part—a widespread conversation about how the continuation of news media can be supported, and that is one strand. But another incredibly important strand, as Alan says, is looking at the dominance of the platforms in the digital market and creating an environment where it's more possible for those people who produce digital content to get financial benefit from it.
The fact is, you're not creating local news, that's the point I'm making. Because we discussed WalesOnline, and you said that's not really the place where you put all your local news. There's been nothing from Blaenau Gwent on WalesOnline since the seventeenth of last month.
You pointed at InYourArea as an example of local news, but that isn't the creation of content, is it? It's bringing together content from other people. If you look at the front page of InYourArea for Blaenau Gwent today, you've got the South Wales Argus reporting the People's Postcode Lottery win in Ebbw Vale; a three-bedroomed bungalow for sale; 'share your upcycling creations from lockdown'; 'Gwent's leisure centres to reopen' from the Abergavenny Chronicle; 'no new coronavirus cases recorded in Carmarthenshire'; and 'an extension in a care home in Brynmawr rejected' from the South Wales Argus. There's nothing there that's been created by your people; you're bringing together, aggregating, news from other sources. So, is it any surprise that people in Blaenau Gwent have got absolutely no confidence in your products?
So, you're talking, obviously, about Blaenau Gwent very particularly there. Your general comment that WalesOnline isn't creating local news is not right; it's very important to us—we cover communities across Wales very well. But it is an undeniable fact that we don't employ as many journalists as we used to, because revenues aren't where they were—print revenues aren't where they were when we were able to employ journalists in greater number.
What we are looking to do is to restructure our business. What we've been having to do is look to change our business over the past couple of decades to adapt to how market forces have impacted on us and how we can build something that continues to grow to serve and create an improved service to communities in the future. We're constantly reviewing our products. We've had an absolute revolution in our industry. And it is simply not realistic that we would have been able to continue everything as it was without changing anything while the world changed around us. We're in a process of that change, and that's what this transformation is about. We're absolutely committed to working with, as Alan says, stakeholders of all types to try and improve those services as we go on.
I've got—. I think Alun Davies wants to come back in; I've got Carwyn wanting to come back in. Can I ask Members for questions now, rather than comments? Because we are now 15 minutes over on this session and I'm very conscious that we do need to bring the meeting itself to a close on time. So, I'll bring Alun Davies in, then I'll bring Carwyn in.
Okay, thanks very much, Chair. Media Wales is a dormant company in terms of the accounts it filed at Companies House back at the end of 2018, presumably because it's going to change at some point in the future. Alan, you mentioned some of the operational changes that you are looking at. But what is curious is it doesn't have either a director or a non-executive director from Wales. Here we have Media Wales—there are two directors listed in London who are active, and the others are Reach Secretaries Limited, Reach Directors Limited. Doesn't Wales need a voice on Media Wales?
Our structure—. So, I mean, obviously—. Media Wales, as you said—. So, it's an operational thing; we don't report figures at that level. So, nothing has changed in our structure at all whereby—. So, I was editorial director; I'm now chief operations officer. As chief operations officer, as someone who used to edit the Western Mail and be managing director of Media Wales, then there's a very strong voice for Wales at a high level. So, I obviously understand the Wales business extremely well, and that helps me enormously.
Carwyn, I'm sorry, we are seriously over time, and I do want to bring Alun back in. Alun Davies.
I'll be very quick. I can see time is moving ahead. It might be useful for Mr Edmunds to write to us with some additional information, given the time limits. The reality is that you and I have had these conversations for most of the last 20 years, and the conversation we've had this morning, we could have had 10 years ago, in many ways. Much of what I've been hearing from both witnesses has been said before. What concerns me is that we see these relaunches and these new strategies; they always involve a diminution of editorial posts, they always involve a reduction in the quality, frankly, of what is available to the consumer, and they always involve—[Inaudible.]
[Inaudible.]—how you're going to improve the digital offering in future. I'm not convinced that I'm seeing any of that—sorry, I'm not convinced that I'm seeing that. I would be anxious that targets are for the future in terms of readers of the print edition of the Western Mail, people accessing WalesOnline, the content available on WalesOnline, and how he will ensure that the Western Mail is not hollowed out in the same way as the Celtic titles have been hollowed out over the last decade.
So, seeking some reassurance, then, about the Western Mail's future. I don't know which of you wants to go first on that. Alan.
We made it very clear how important the Western Mail is to us. We understand the Western Mail readers and what they want for the Western Mail, and so, clearly, that's what we aim to deliver. The Western Mail and its magazine have won a number of awards in journalism in the Regional Press Awards in recent years. The magazine in particular has been recognised. So, we have no intention at all to do anything other than give the very best possible service we can to readers of the Western Mail, of course.
In the interests of time, I've touched on this subject previously in the last hour and I don't have anything to add to what Alan said there.
Thank you very much. I'm very grateful to our witnesses. I know this is a really important topic, which is why I've allowed this session to go on quite a lot longer than we'd originally planned. So, I'm grateful to the witnesses for their patience. You will, of course, as usual, be sent a transcript of the meeting for you to correct in terms of accuracy. As Alun Davies has suggested, once we've discussed the evidence and, obviously, the evidence we receive from our next witnesses, we may have some additional questions for you, and I hope you will be able to provide us—if there is any additional information that we haven't been able to touch on, though this has been very comprehensive. So, can I thank you both very much? We appreciate your time, and, as other Members have said, for making yourselves available at what was really quite short notice. I have no doubt that this is a dialogue that we will wish to continue. So, thank you very much to our witnesses.
Thanks very much.
You're most welcome. And so, Members, we will just take a five-minute break to enable us to bring the next lot of witnesses in. If we can be back, please, just as soon as we can, five minutes from now. It's 10:33 now. So, if we can stop the broadcast now.
Gohiriwyd y cyfarfod rhwng 10:33 a 10:39.
The meeting adjourned between 10:33 and 10:39.
Bore da eto, a chroeso cynnes i'r pwyllgor. Dŷn ni'n troi nawr at eitem 3, sef mwy o dystiolaeth ynglŷn â fel mae COVID-19 wedi effeithio ar newyddiaduraeth yng Nghymru a'r cyfryngau lleol. Rwy'n falch iawn i groesawu, o'r NUJ—National Union of Journalists—Martin Shipton a Pamela Morton. Croeso cynnes i chi.
Os dŷch chi'n siarad ar ôl i rywun arall siarad yn Gymraeg, mae yna bach o oedi—a little bit of a delay—so os dŷch chi'n gadael cwpl o eiliadau cyn eich bod chi'n dod mewn. Os dŷch chi'n barod, awn ni yn syth mewn i gwestiynau, ac fe wnawn ni ddechrau gyda David Melding. David.
Good morning everyone again, and a warm welcome to the committee. We turn now to item 3, more evidence on how COVID-19 has affected journalism in Wales and local media. I'm very pleased to welcome, from the NUJ, Martin Shipton and Pamela Morton. A warm welcome to the both of you.
If you're speaking after somebody speaks Welsh, there's a little delay, so if you could just wait a couple of seconds before coming in. If you're ready, we'll go straight into questions now, and we will start with David Melding. David.
Diolch yn fawr, Cadeirydd. Chair, I should say I've often daydreamed about what it would be like to interrogate Martin Shipton, so I am now in that situation, but I must be very disciplined and stick to the subject, not a possibly long list of things that maybe I've been disgruntled about over the years in the commentary or coverage that I've read, about my party in particular.
I put it to both witnesses—and I think you've probably heard the previous session; am I right in that?
Yes indeed, yes.
I think we have to be fair and acknowledge we're in this incredible media revolution, and it has a big impact on companies' bottom line, so there's a real context there to which now we add COVID, and the impact that's had on all sorts of companies out there. So I suppose, as responsible employees, you've got to think in terms of the business interests also of your employers, and I just wonder how you feel they have grappled with the challenges of COVID, and in particular the question I put to them, which I think is quite an important one, about how do you protect the model and not make decisions in a very acute crisis, which is likely at some point to pass, and then to make your decisions for the longer term. How would you say they've done from your perspective in this area?
Okay. Thank you very much, Chair, and thank you, David, for the question. Yes, I think we have to see this in a broader context, going further back, because one of the concerns that we have had in the union for many years now is the way in which the company has had aspirations to replace lost print revenue with increased digital revenue, and it simply hasn't happened. So, you have a situation where, as revealed in the accounts of Reach plc, in 2019, 84 per cent of the revenue was still coming from print, and I think it's very important to understand that. What that indicates is that, despite the great success that the company has had in getting more visitors to the website—and they're able to quote really quite staggering figures about the number of page views that they have—that does not, unfortunately, translate into revenue in the way that they had expected. So therefore, it's very important from our point of view that the print outlets, the print titles, should be protected, because they are still providing the bulk of the revenue, and while the company says digital is the thing of the future, and of course we accept that, nevertheless, without the revenues that they get from print, they would not be in existence.
Now, so far as the response to COVID is concerned, we're a little confused, because at the time when the whole issue about the impact of COVID on the economy was taking place initially, we had an e-mail from the chief executive of Reach, who was seeking to reassure us about the resilience of the company, and to tell us that we needn't worry unduly about what was going to happen. And then, of course, a little while later, we were suddenly faced with this very shocking announcement, which essentially came out of the blue, that across Reach, 550 jobs were at risk. Initially, we weren't told for a few days what the impact was going to be in Wales, and then initially we were told the number of people who were at risk, which, when you aggregate Media Wales with the Daily Post, as Paul Rowland said earlier, it's about 90 journalists. We didn't know, initially, how many they actually wanted to go, and that, you can imagine, caused an enormous amount of consternation. We were very unhappy to learn that the company had actually got £20 million in reserve, they'd actually accumulated an extra £20 million in reserve, so we thought that that would be helpful to them in weathering the storm, as it were. They effectively imposed a pay cut of 10 per cent on everyone, which I'm pleased to say, following a lot of representations from the union and a lot of concern about it, they actually restored in July. So we went for three months with a 10 per cent pay cut.
Clearly, it would be foolish to disagree with the points that were made by Alan Edmunds and Paul Rowland in terms of the impact on revenues, but we were hoping that the company might be able to weather the storm with its reserves. People were also not very happy, for example, about the fact that the chief executive was given a very generous share option just shortly before COVID struck, and I think we have to take into account the very high salaries that are paid to top executives. I think, when the chief executive's bonus is added to his basic pay, you're talking about more than £1 million a year, which is a great deal of money. Therefore, we were hopeful that the company would be able to weather the storm. And then, of course, this bombshell dropped, which caused us enormous anguish, created a lot of trauma amongst the majority of the staff—well, amongst all the staff—but the majority of staff were actually put at risk of redundancy, and people were left feeling, 'Well, what is going to happen here?' And then, as the plans unfolded, we obviously had concerns about the specifics that were being put forward.
Thank you, Chair. Yes, to add to what Martin has outlined, obviously it was a real shock in terms of, two weeks into the coronavirus crisis, getting the letter from the chief executive, Jim Mullen, basically saying everything was all right, we have £20 million to weather the storm, as it were, and then two weeks later, people were being put on furlough and the 10 per cent wage cut imposed.
I can't remember which member of the committee asked the question about the UK Government coronavirus job retention scheme. Alan Edmunds said that if it was extended, he would welcome it. Well, the fact is that people are at risk of redundancy now, and the intention is that people go by the end of August. Now, I appreciate that the coronavirus scheme is tapering off, but it still is in existence until October, so we're not seeing that. I have to say that Reach are not alone in that. Other companies are doing that as well.
Obviously, we are horribly aware as a union of the impact on—well, society as a whole because of this crisis, and the newspaper sector. I think the company is now part of the problem and, relating to another question that was asked about how have they lost the confidence of the staff, it is because they are continuing to pursue—and it's, in fact, accelerated—a policy of digital first. We are going through the consultations and the company are right, we have good relations with them and the consultations are proceeding well, in part, and professionally. But they are pursuing digital first, and those roles will be primarily digital. And that's a policy that they have pursued for a long time.
Now, print revenue accounts for 84 per cent, so I appreciate that obviously there is a decline in print and people who are reading, but the worry is—and this is not just in Wales, although there are obviously issues in Wales, particular to Wales—but across the company, staff are concerned that they're persisting with this digital first and with not really very much substance or detail as to how they are going to monetise that. The answers previously were customer registration so that they could tailor stories online to people and our readers, but also to get more information about customers to make advertisers keener. Again, that's going to be more advertising, and that is very much the line they are taking.
We're very concerned. We don't want companies to fail. We don't want our members or anyone to lose their jobs, and we are very concerned overall about the company's strategy. Thank you.
Thank you. I just need to remind witnesses and Members that we need to try and keep our questions and our responses—. There's a lot to cover, but we want to be able to cover all the issues we want to cover, and if we go into too much detail at the beginning, we may not get to the end. David.
I think both witnesses are of the view that the business model and restructuring has been accelerated by COVID, and that they are making decisions, perhaps, that they were going to make at some point. I don't know if that's fair or whether you wish to contradict that. Is that what's occurring?
Yes, it is, David. What they've told us is that they would probably have been making these decisions in two or three years' time. The trouble, from our point of view, is that essentially their business model involves managing decline. So, there is this constant shedding of jobs. I've been around for a long time and the first round of redundancy that we faced was as long ago as 2003, at a time when the Western Mail & Echo, as it then was, was nudging 40 per cent profit return on turnover. And this was the time when they started to, as Alun Davies has described it, hollow out the weekly papers because, until then, the weekly papers were extremely successful, were very much embedded in the communities, were very much read and people looked forward to reading what was in them. And then, the problem was that in order to maintain, or seek to maintain, high profit levels, they started to make cuts, and they've essentially been doing that ever since. So, we've had this situation constantly of a management of decline and that is where they are. We're not into an expansionary situation at all and they're not even talking about that. As they have acknowledged themselves, all they've done is brought forward further cuts that they already had in mind.
No, nothing to add.
And then finally from me, because I think colleagues would quite like to get some of the specifics now: have any journalists been furloughed or was it all backroom advertising staff and the like?
Oh yes, lots of journalists have been furloughed; I'm furloughed at the moment. So, in fact, for the third time, they have a rota arrangement for some of us, where we're three weeks in and three weeks off. So, yes, there has been a significant number of journalists who have been furloughed during the course of this.
Thank you, Chair, and good morning, both. If I could ask you, Martin: the proposals that have been brought forward by Reach, what effect will they have on the quality and content of journalism in Wales from your perspective? What will it mean for the consumer of news in Wales?
The concerns that we have relate, obviously, to the reduction in the number of journalists who will be operating in Wales. Now, what they have come up with is a plan that—. And if I can talk about print production first of all, the management representatives were seeking to give the impression that the fact that we were, as it were, going in with the midlands was something that we didn't really need to bother about. Well, the fact of the matter is that they are creating a huge virtual hub of subbing that includes both Media Wales covering south Wales, the Daily Post covering north Wales, in addition to that, the midlands of England, both west and east, Cheshire and Lincolnshire. So, under their plans, you could very well have a situation where somebody sitting either at home or in the office in Lincoln is subbing a story about Wales, and vice versa.
We don't think that that is good. That sort of exercise has been tried before when Newsquest had a subbing hub in Newport, and it was quite disastrous. Apart from anything else, it is not a good idea to have people editing stories about areas that they don't understand or know. So, you're talking about subeditors a long way away from Wales subbing stories. Just in terms of spelling and the local knowledge that we assume that people are going to have when they're subediting stories will not be there. So, that is not a good thing.
In terms of content, our major concern relates to the fact that there is going to be a reduction in the number of Welsh reporters and feature writers, and that their content will be replaced by material supplied by something that the company describes as the 'shared content unit'. Now, this is based in England and they produce generic stories and generic features.
One of the points that we've made during the course of the consultation, which is still ongoing, is that, for example, on a Saturday, people go out and buy the Western Mail, they are paying £2.10 for a newspaper with an accompanying weekend magazine, and they want to have that packed full of Welsh content. There is no point in diminishing the Welsh nature of that content. Our fear is that because they are reducing the number of Welsh writers based in Wales, they will be replacing some of that material, or the material that would otherwise be supplied from Wales, with generic material. You could have features, for example, about health matters and education matters that would not acknowledge the devolution settlement in any way. So, you could have, maybe, even human interest features about a family in Birmingham, or anywhere in England, that touched on health matters, education matters or schooling matters, and it would have no relevance, really, to the situation in Wales. So, that is our concern.
We're concerned about the dilution of Welsh content and we think that that is counterproductive from a business point of view, because if people find that the titles are not giving them as much Welsh content as they expect, they're not going to be forking out £2.10 on a Saturday for something that includes material that is produced in England for an English audience.
[Inaudible.]—Grantham. That's disturbing, what you've said there. I bought a copy of the Cambrian News a few weeks ago and found myself staring at a full-page advert paid for by the UK Government that was almost entirely irrelevant to Wales. And yet, there it was in the Cambrian News. It's money, I understand that; it's income for them, but certainly not relevant.
In terms of the long-term future of Reach's titles in Wales, what concerns you about the long term, Martin?
We're very concerned. As I said, we don't want any business to fail and for people to be out of jobs, and for local and national news not to be reported on. You mentioned serious content and health news, and there are particular issues that come under devolution that we just don't want to be lost. Yes, we are very concerned that if they don't look very carefully at this again, they will go down a road that it is all digital, it's more and more content put on WalesOnline, which I'd say is different from particularly the Western Mail, and will lose what is propping up the business—the 84 per cent at the moment. Now, obviously, that is going to diminish and it can't stay the same—I think this crisis has shown that things can't stay the same—but they have to look very seriously at that and, if they are pushing digital, how to make money from that.
Yes. I think there has to be serious concern for serious Welsh content. A few years ago, the company modelled a digital-only operation in Reading and it was a very stripped down sort of operation. They closed the local paper and what they did was they had a digital model that was based on a total of about 10 journalists, but they wanted, of course, the website to be functioning for most of the day, so from very early in the morning until, say, 10 p.m. at night, which meant that at any one time, because of shift-work patterns, you would only have a small number of people and obviously you'd have to take holidays into account as well. So, what that stripped-down model was based on was breaking news, which in Reading's terms amounted to traffic jams on the M4; talking about what they call 'What's on', which is stories about restaurants and pubs and things like that; and sports content—and there was going to be one sports reporter.
That is the sort of model that you can run if you don't have print, but it means that you are very stripped down; you're not going to get the revenues that you want to be able to sustain the size of news rooms that we have been used to; and, essentially, it's going to be very superficial coverage. So, that is the driving concern and, as I mentioned earlier, so far, there's no evidence other than the fact that Reach is managing decline, so we can expect there to be a continuation of this cuts culture, which is simply going to mean that there will be less and less content of a serious nature in particular that will be produced.
I think that answered the question. One of the things I'm curious about is that looking at Media Wales at Companies House, it's filed accounts for a dormant company, non-trading company since 2017. Martin, you're nodding at that. What's the significance of that?
Okay. So, what's happened is they've merged it. They had a sort of merger of subsidiaries within Reach, and Media Wales as an entity no longer exists. I believe that it is now reported on the basis of an arrangement that includes the north-west of England. I think that may well be the case.
But, again, our concerns extend to the fact that—as was mentioned by a number of people, including yourself—why don't they have a Welsh division of Reach? That would be absolutely the right way to go, but so far, they haven't gone in that direction, and indeed, instead, they have, as you say, ceased to make financial returns for Media Wales, although we still do get internal briefings about how the business is going, but that is not for external consumption.
Yes, I mean, that's curious because Alan made the case, and Alan's made a case for himself being a strong voice on Reach, of course, but there's no director, no non-exec at all that I can see from Wales and I'm sure it would add a level of confidence in terms of a presence in Wales in the future if that were to change in the future. It just struck me as quite strange.
The last question from me, really, because you've dealt with most of the other points I wanted to raise, is this: if Reach were here, they would say, 'Well, all well and good, but the world is changing; we see the direction in which media is headed in the future. What's your alternative?' What is the alternative profitable model that would work instead of the model that Reach are currently using or propose in the future?
Well, I think the only way, really, forward is to base their future model on quality journalism and to have a pay wall. Lots of companies initially decided to plunge into the internet to create websites without having a thought-through business model at all, and you developed this ridiculous situation where they were giving away the great bulk of their content free of charge. I think that was a very stupid strategic error made by these people who were very highly paid. I mean, we're talking 20 years ago, something like that. So, that was a stupid thing to do.
More recently, some of those companies that were initially giving all of their content away for nothing have come to the conclusion that the only way is to have some kind of subscription model or pay wall that entails charging people for getting access to the material that is produced, and that is the way that newspapers have run for centuries. There has always been a dual revenue stream from advertising, yes, but also from cover price, sales, and, indeed, Reach bases a lot of its stability, or its previous stability, on the fact that it makes a lot of money by selling copies of the Daily Mirror on a daily basis. And they have been able to continue doing that, but the trouble is that with the diminishing returns from print, they are going to have to, in my view, seriously consider a paywall of some kind, a subscription model of some kind, but people will only pay for quality material; they're not going to pay for generic material, and this is one of the concerns that we have.
I would completely agree. I always thought that you should pay for it. I think that, often, if something is free, you don't actually value it. The example that we've seen recently of—. The Telegraph has paid back its furlough money because it's gone for paying for the journalism. But The Guardian asks people to donate. Now, they are also making redundancies, so I don't know how successful that's been. I understood it had been successful up to the point of coronavirus, and that's changed the picture. But, yes, I would agree.
Good morning, everyone. Martin, you talk about the company managing decline. Yet, the company seems to have been very successful at maintaining its profitability somewhere between 5 per cent and 8 per cent year on year. Do you have any comment on that?
The profitability of the company is probably even a bit higher than that, actually, but it's managed to do so by constantly cutting. Had they not cut, they would not be making those profits. But if they had a different strategy from the outset, which would have entailed from the outset of the digital revolution, as it were, then they would have had another revenue stream that would have sustained them. The problem that they've got is that they do not have that additional revenue stream. They're wanting to get all of their revenue from advertising, and that puts them at the mercy of organisations like Facebook and Google, who scoop up the great majority of digital advertising and just leave the crumbs for organisations like Reach. So, that is the problem. They have been able to keep their heads above water, but that is only by imposing the sort of cuts that we're talking about today.
I've nothing to add. Thank you, Chair.
Okay. The union, the NUJ chapel, has passed a motion of no confidence in management, and I suggest that this is is actually quite a devastating outcome for the company by the main producers of that company. Can you outline precisely what it is you don't have confidence in?
Well, as I explained earlier, people were very shocked indeed by the way in which the announcement was made and the way in which it came out of the blue. So, people felt that, in advance of the announcement, there hadn't been the kind of sharing of information that we deserved. The motion of no confidence was passed at an early stage in this whole process, at a time when we had discovered that the company had £20 million in reserves, and which we felt, in retrospect, when we discovered that, could have been used to keep things going and maybe not to impose the pay cuts that they did.
We were also concerned about the nature of the proposals that were being put forward, which we felt were not in the interests of Wales, and, in this sense, the interests of the employees and of our members coincide with the interests of Welsh democracy, because we believe that Welsh democracy is served by having a thriving media sector and that this constant chipping away at journalists and the number of journalists employed is very debilitating and is not good for Welsh democracy. So, you have this irony that, as the Senedd is accruing more powers, there are actually fewer journalists around to cover what it's doing and to hold politicians to account. So, you know, that is our concern.
We were very concerned, as I've mentioned, about this shared content unit, which was going to be beefed up. Also there was a concern about lack of information, and I can tell you one thing that really got people riled—and this was actually after the motion of no confidence was published or was passed—was the decision of the company to buy the remaining 50 per cent stake in the Irish Daily Star. I was being contacted by members who were very angered by this and they were saying, 'Look, I'm being told that my job is at risk and that they can't afford to pay me, but they can presumably afford to pay millions of pounds to buy the remaining stake in this newspaper in Ireland.'
I think you may have heard the answers that I was given when I put to the last witnesses the state of the consultations that were taking place, and the impression I formed is that things are quite hunky-dory now—there's a lot of consultation going on, a lot of discussion, a lot of exchanging of information. Is the situation improving?
I think, overall, the consultations are going well. They've probably settled now. We've been having what we call group chapel meetings every Monday, which is where all the different reps get together and discuss issues. I think that, honestly, they have felt very bombarded; some of them are having to do several meetings a day on it, it's been very intense and I think that the pressure has been enormous on them in terms of actual time. I'm not sure that some of the Reach reps—although I don't think this applies in Wales—have been—. Some of the management have not been very patient about reps needing to get more information. There has been quite a lot of information that's come drip by drip; it wasn't all there to start with, and I appreciate that, sometimes, with an enormous company like Reach, where there are lots of different companies within in, it's very difficult. So, basic information hasn't been there. Lots of our reps are having to do lots of meetings, which the company refer to as verticals. So, I think that that's been an issue. Obviously, we're now getting to the stage where—. The consultation is a minimum of 45 days. I think that, at most, we've had two, three consultation meetings. So, we will be getting soon to the stage of actual redundancy hearings.
I just wanted to see if Martin had anything to add to that, Mick.
Yes. I would simply say that, from the union's point of view and from the management's point of view, the discussions have taken place in a very civilised, amicable way, and obviously we know the people concerned. I've worked with Alan Edmunds for more than 20 years, since he was the editor of Wales on Sunday and I was working for him, and then I moved over to the Western Mail when he moved to be the editor of the Western Mail. I've always got on with him very well. Paul Rowland mentioned that he's known me for many years—he has indeed. I remember when he was a trainee; we've always got on well. So, I've got no personal animosity towards them. Our concern relates to the implications of the proposals that they are having to put forward, or that they find themselves in a position of putting forward. So, there's no personal animosity but, clearly, we remain concerned about the core issues that we have outlined.
Are you surprised that there have been no meetings with Welsh Government over this?
Well, I think that they would probably see this situation as an internal company situation. I'm not aware, for example, that there has been any coverage whatsoever of the proposed redundancies in any of the Media Wales outlets. I haven't seen any reference to anything there. So, they see it very much as an internal thing that doesn't even merit being publicised by their own news outlets. So, therefore, maybe they think, 'Why do we need to discuss anything with the Welsh Government?'
Can I just raise one final point, then? On the example you give of the purchase of an Irish newspaper while this is going on, a lot of this has reminiscences of what's been going on with British Airways—a company with high reserves, very profitable, a lot of money. Is this, in your view, an example of using COVID to achieve objectives that have been long prepared in any event?
Well, of course, Reach, for quite a few years, going back to the days when it was called Trinity Mirror, have had a policy of acquisitions. At various times they have acquired groups that were previously owned by others, like, for example, the Manchester Evening News, which was until a few years ago owned by The Guardian. So, they bought that. They then bought Local World, which included the Swansea Evening Post, so that was incorporated into the Trinity Mirror portfolio. They do this in order to acquire greater scale, and they believe, with some justification, that it's easier to impose cuts if you have a greater scale of business and that you can make back-office cuts. But the problem is that they don't just make back-office cuts, they also make operational cuts by reducing the number of journalists that they employ. So, this has been a strategy for quite a long time. It also, of course, makes it more difficult to track exactly how the business is doing, because it's very difficult to compare like with like on an ongoing basis, because you're never comparing a total situation of stable ownership with what's come before because there is this constant level of acquisitions.
So, I think that it's part of the way in which they operate, but it seems to me to be incredibly insensitive that, at a time when they are putting a lot of people out of work, they can stump up the money—millions of pounds, no doubt; they haven't disclosed exactly how much—to take over and gain 100 per cent ownership of a paper like the Irish Daily Star.
Just to add really what I said at the start, which is that I'm generally really disappointed if companies are not using the furlough scheme until it ends. We're not sure we—. As you said, hopefully, it may be extended. I think it needs to be extended. But, for companies not to use that, I can't understand it—and to use it for everyone, rather than making redundancies now.
I'm grateful to the witnesses for their time this morning. I asked Paul Rowland about the support they'd sought from Welsh Government. I was a bit surprised by the request, because it seemed to be very something or nothing, you know: 'Will you carry on posting public notices in our local papers?' That's not the profound intervention into the marketplace that you would normally anticipate a significant media company asking of Government. I'm interested in the view of the NUJ, because it's right and proper that politicians and journalists have, how shall I put it, a relationship that is—I'm searching for the right word—
—distanced, to enable proper scrutiny to take place. It's important that you don't get too cosy. So, would the NUJ support any sort of intervention from the Welsh Government to create a different business model that would underpin the future of the titles and the media operation?
Yes. Thank you for that question, Alun. I think that the NUJ would be supportive of any efforts from any quarter, but particularly from the Welsh Government, which, obviously, has a very strong locus in Wales by nature of its existence, to try to bolster up the media industry in Wales. As we know, there are threats going on not just to Media Wales but to BBC Wales. Only last night, we heard about The Glamorgan Gem going, for example. So, there are lots of problems with the Welsh media.
In fact, there was an inquiry a few years ago where the NUJ had suggested that there should be some kind of media group set up where there could be regular contact between academics, journalists, companies and representatives of the Welsh Government, but that was something that was—the recommendation was actually rejected by the Welsh Government at that time. I think we've now got to a point where it would be a very valuable thing to do to resurrect such an idea, because I think, if we don't, we are in serious danger of having a lot more bad news for the Welsh media industry, and I think it's important that these matters are discussed between all the relevant parties and stakeholders.
What we don't want, and one of the reasons for this motion of no confidence that we passed recently, was the lack of information that there had been about what was being planned. It was clearly planned over a period of months to make 550 people redundant—in fact, it was 580, as we ultimately discovered—across Reach. So, yes, in a Welsh context, it's particularly important that we should get something like that moving.
Sorry, I didn't catch that, Alun.
Sorry. How do you do that without compromising on independence? Because I've got no principled objection to public money being used to improve the capacity for public debate and public scrutiny—I think that's a reasonably good use of public resource. My concern is—and I've been a Minister with responsibility for media policy, and the last thing that you want or I want is for us to sit down and say, 'You know, we weren't happy with that story, Martin; you were a bit unfair there', with the obvious, then, threat that is behind it. So, I'm uncomfortable with any element of public funding for that reason, unless we're able to find a means by which the independence of the use of that resource has cast-iron guarantees and structures in place to prevent politicians from poking their noses into editorial policy. That's really what we're talking about, isn't it?
Absolutely, and, of course, it would be feasible to establish an arm's-length arrangement in order to fund media outlets. Already, of course, the Welsh Government funds, via the Books Council of Wales, Golwg 360, for example, and the papurau bro also get public funding. So, it's not beyond the wit of all of us to put something together that would include the safeguards that you and I are very keen to ensure are present.
Just to add, yes, I would agree: it would have to be very arm's length and very careful. We are extremely grateful that, several years ago, the Welsh Government set aside I think it was £200,000 and, during this crisis, made available funding to hyperlocals—I think it worked out at about £8,000 each. That was an absolute lifeline and that was an example of Welsh Government intervention. We work closely with the Independent Community News Network and the Centre for Community Journalism, and that was extremely appreciated.
Thank you all. I'm going to need to bring this session to an end because, apart from anything else, our technical staff need to be released to set up for this afternoon's Plenary session. I want to thank both our witnesses very much indeed. Obviously, this is a very important dialogue; we appreciate you making yourselves available at such short notice. We will, as usual, send you a transcript for you to check. We have, of course, received your letter, which we'll take as a paper to note. If, after this meeting, there are any additional matters that you would have wanted to raise with us, or if there are any developments of which you think we should be made aware over the summer recess, please do not hesitate to get in touch, because I think, as other Members have said, having a thriving press in Wales is a very important part of our local democracy, of our national democracy. And while we must bear in mind the needs of the company, we also—you know, it's our job as a committee to look at how decisions they make may affect Wales. So, thank you both very much.
Wedyn, Aelodau, dŷn ni'n symud at eitem 4 ar yr agenda. Mae gyda ni bedwar papur i'w nodi. Y cyntaf yw llythyr oddi wrth yr NUJ. Ydyn ni'n hapus i nodi hwn? Ie.
Ac wedyn mae gyda ni ymateb—yr ail un yw ymateb gan Lywodraeth Cymru i'n hadroddiad ni ar impact y feirws ar y celfyddydau. Ydyn ni'n hapus i nodi hwn? Ie.
Members, we move to item 4 on the agenda. We have four papers to note. The first is a letter from the NUJ. Are we content to note that? Yes.
Then we have a response from the Welsh Government to the report on the impact of the virus on the arts. Are we happy to note that? Yes.
Just to say to the witnesses, you're very welcome to leave us now. You don't have to sit through this bit, if you don't want to.
Wedyn y papur i'w nodi nesaf yw llythyr gan y Pwyllgor Deisebau. Ydyn ni'n hapus i nodi hwn? Iawn. Wedyn llythyr gan Lywodraeth Cymru ar y supplementary budget. Ydyn ni'n hapus i'w nodi? Ie. Diolch yn fawr i chi.
Then the next paper to note is a letter from the Petitions Committee. Are we happy to note that? Yes. And then correspondence from the Welsh Government on the supplementary budget. Are we happy to note that? Yes. Thank you very much.
bod y pwyllgor yn penderfynu gwahardd y cyhoedd o weddill y cyfarfod yn unol â Rheol Sefydlog 17.42(ix).
that the committee resolves to exclude the public from the remainder of the meeting in accordance with Standing Order 17.42(ix).
Cynigiwyd y cynnig.
Wedyn, o dan Reol Sefydlog 17.42(ix), dwi'n cynnig i'r Aelodau ein bod ni'n symud y pwyllgor i sesiwn breifat. Ydy hynny'n dderbyniol i Aelodau?
Then, under Standing Order 17.42(ix), I propose to the Members that we move the meeting to a private session. Is that acceptable to the Members?
Members are indicating that they're content, so can we move into private session now, please?
Derbyniwyd y cynnig.
Daeth rhan gyhoeddus y cyfarfod i ben am 11:27.
The public part of the meeting ended at 11:27.