Independent News - the 'quality' pretence is abandoned

Tony O'Reilly's Independent Newspapers has initiated the most radical and damaging wheeze yet devised by media accountants: the outsourcing of a key editorial function. Over 150 journalists have left Independent Newspapers in Dublin in the last three months By Martin Fitzpatrick

One of the more dramatic organisational and qualitative changes in the world of newspapers since the control of the industry was wrested expensively from the print unions has occurred at Tony O'Reilly's Independent News and Media (INM): the outsourcing of one of the key editorial functions, production and sub-editing.

Essentially the Indo accountants have come up with the wheeze of bringing outsourcing to a point where no one in the past ever thought would be possible – or wise. One whole wedge of newspaper production, the editing and control of the material that is intended for publication, has been removed from the mainstream control of the Indo organisation and given to a new firm owned by a couple of ex-Indo journalists to staff and manage.  

At a stroke the INM management has rid itself of the cost of payroll, pensions, expense accounts, any bonuses, heat and lighting. All have been whipped off the Indo balance sheet. Rather like the implications of the Irish Ferries experience, given time, the outsourcing company will pay a market rate for the labour it utilises, whether or not that is the traditional rate for the job.

The change radically alters the nature of newspapers for it loosens the control that editorial managers have always had on the quality of the papers they wished to produce.

If newspaper production was a process that allowed for leisurely revision and re-writing, this might not be a concern. But the period between the writing of a news story and its appearance in printed form is often the key determinant of the value of that story. It's a business that does not allow for hanging about. Thus, from an editorial point of view, the idea of outsourcing sub-editing is strewn with risk. So much so that any stage in the past it would have been unacceptable, except to the most dyed-in-the-wool cost-cutting accountant, to ask readers to accept a newspaper where such important quality controls were missing.

Independent News and Media management appear now to be happy to wave the standard of the cost-cutters and are probably revelling in it. Moreover, outsourcing in INM has become more than just a localised experiment, it has been launched in style in Australia and New Zealand too.

While in the past Tony O'Reilly has striven to give the impression that the quality of his editorial product has been paramount for his titles, that seeming pretence has now been dropped. The outsourcing initiative shows it is all about the money.
Since the changes have been introduced the signs have been all too evident at the Indo titles. Managers have suggested that the embarrassing evidence of misspellings, jejune headings on stories, lengthy pieces published on one page and repeated on another, have been treated as teething problems with the new system. But as the company warmed to the task of cutting staff numbers, the opportunities to get back to an effective quality control system is getting harder.

In addition the mood of the handful of surviving production executives still on the Indo payroll, will not have been helped if they listened to a recent RTÉ interview with the Indo's Irish CEO, Vincent Crowley. When asked about the outsourcing of the production departments of the newspapers, he replied that the company was pleased to be losing its “non-core” activities. It would be quite arresting to be told that one's life long career activity was suddenly “non-core”

It legitimately can be asked that if the outsourcing is such a terrible thing, why have some 130 journalists and twenty other staff members upped and of their own free well, left INM's Talbot Street headquarters since the end of the summer?

The answer lies in the money that has been splashed about to effect the change. In its interim statement a few weeks ago, the company announced that it had set aside ?45 million for a restructuring campaign that would rid the company in Ireland, the UK and Australia of some 580 people. Interestingly the accountants reckoned that the payback on this (the time it would take to recover the cost from the savings made) would be as quick as two years.

But in Ireland the passion to turf people out of the premises has been so strong that the company hasn't stopped short at production personnel. Now a significant number of senior reporters and correspondents have left with their weighty O'Reilly cheques and another significant number are bursting to get on their bikes.

Several categories of journalists are watching the INM saga with apprehension. There's the remaining Indo staff journalists who can't be sure what bright new idea will be produced to put pressure on them and their working hours.  And there are the other national newspaper journalists who wonder when their own managements will want to take a leaf from the Indo copybook. They will be consoled by only one thing. Least impressed by the INM outsourcing has been the stock market, suggesting perhaps that investors may be better attuned to the requirement of quality newspapers than the Indo is. Since the cost cutters began to flex their muscles six months ago, the INM share price has fallen by a quarter. The paper value of Tony O‘Reilly's stake in the company has fallen by E250 million, while the value of the stake held by his upcoming rival, Denis O'Brien has dropped by around E84 million.