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World Newspaper Congress 11: Session Finance, Gregor Waller
World Newspaper Congress 11: Session Finance, Gregor Waller
World Newspaper Congress 11: Session Finance, Gregor Waller
World Newspaper Congress 11: Session Finance, Gregor Waller
World Newspaper Congress 11: Session Finance, Gregor Waller
World Newspaper Congress 11: Session Finance, Gregor Waller
World Newspaper Congress 11: Session Finance, Gregor Waller
World Newspaper Congress 11: Session Finance, Gregor Waller
World Newspaper Congress 11: Session Finance, Gregor Waller
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World Newspaper Congress 11: Session Finance, Gregor Waller

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  • 1. 63rd WORLD NEWSPAPER CONGRESS Session: Finance Titel: How do we get through the next crisis Speaker: Gregor Waller Mark your calendar64th WORLD NEWSPAPER CONGRESS19th WORLD EDITORS FORUM Vienna, Reed Messe Wien www.wan-ifra.org/kiev2012
  • 2. How  do  we  get  through     the  next  crisis     Some  Landmarks         Gregor  Waller    Consultant  and    Entrepreneur    Principal  Consultant  at  Frenemies  Consul7ng,  a  WAN-­‐IFRA  ac7vity     www.wan-­‐ifra.org  
  • 3. The  double  dip  “monster”  (recession)  that  will  hit  the  world  economy  2012  will   bring  Europe’s  newspaper  publishers  in  the  red  figures*  –  it  even  can  get  worse   Large  Newspapers  >200k   Midsize  Newspap.  >  100k   Local  Newspapers  <50k   -­‐20%   -­‐40%   -­‐20%   -­‐30%   -­‐40%   -­‐5%  REVENUES   -­‐30%   -­‐10%   -­‐5%   -­‐30%   -­‐5%   -­‐10%   -­‐10%   -­‐30%   -­‐10%   -­‐10%   -­‐10%   -­‐10%   -­‐10%   -­‐10%   -­‐1%   -­‐2%   -­‐3%   -­‐4%   -­‐1%   -­‐2%   -­‐3%   -­‐1%   -­‐2%   -­‐3%   -­‐4%   -­‐4%   2011   2012   2013   2014   2015   2011   2012   2013   2014   2015   2011   2012   2013   2014   2015  EBITDA   CirculaIon   Display  Ads   Classified  Ads   *  Average  of  4  newspapers  in  each  class   WAN-­‐IFRA  Finance  Session  -­‐  Thesis*     2011-­‐10-­‐14   2    
  • 4. 2012 the „2. Exitus“ will begin:Discerning the “prepared” potential winners of the Digital Trans-formation from the “passive” stakeholders “at print speed” Unable  for  challenges  of     PotenIal  Winner  of  the   Digital  TransformaIon   Digital  TransformaIon   §  Focus  on  dividends/noninvest   §  Commi_ed  to  a  Ime  of  invest   Shareholders   §  No  cooperaIon  with  dislikes   §  Digital  in  all  top  posiIons   suitable  for  financing  the   §  AUachment  to  CE,  CEO,  long-­‐ §  OK  to  deep  cut  layoffs   transi7on  into  the  Digital  Age   term  companions  (legacy)     §  OK  to  „digital  overhead“   §  Avoidance  of  cannibalizaIon   §  All  “Head-­‐of”  must  be  digital   Top  Management   §  No  digital  experiment  budget   §  Best  PracIce  Restructuring   capable  of  managing  the   §  „Passive“  digitza7on  approach   §  Coop-­‐Network  with  publishers   transi7on  into  the  Digital  Age   §  No  digital  restructuring  plans   §  Digital  Think  Tank   Editors  in  Chief   §  No  evaluaIon  of  digital  editor   §  Digital  all-­‐channel  workflow   willing  and  capable  of   §  No  best  pracIce  learning  trip   §  Customer  &  compeIIon  focus   transforming  a  „print-­‐culture“   §  I  hire  a  digital  deputy  chief  ed.   §  „get  digital  or  get  out“   editorial  in  a  digital  editorial   §  Conference  @  10  –  no  metrics   §  Commercial  whilst  integrity   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   3  
  • 5. Take Over Targets 1: How to identify newspapers with bad management1.  LiUle  RESTRUC-­‐ •  Li_le  or  no  significant  RSTRUCTURING  PROJECTS  in  the  past  5-­‐7  years  TURING  in  the  past   •  No  /  li_le  BENCHMARK  PROJECTS  in  the  past  5-­‐7  years  2.  No  clear  DIGITAL   •  No  DIGITAL  STRATEGY  FOCUSSING  company  ac7vi7es  into  the  Digital  Age  STRATEGY  executed   •  Li_le  /  No  EXPERIMENTING  with  KEY  ELEMENTS  of  media  Digital  Strategy  3.  No  vision  for   •  Editor-­‐in-­‐chief  is  NOT  the  DRIVER  of  the  digital  transforma7on    DIGITAL  EDITORIAL   •  No  CRITICAL  MASS  of  20%  DIGITAL  EDITORS  4.  No  DIGITAL  edi-­‐ •  NEWSROOM  &  WORKFLOW  do  not  allow  to  serve  ALL  digital  channels  torial  WORKFLOW   •  Editorial  has  no  strategic  CONTENT  PLANNING  strategy  –  linked  to  online  5.  No  DIGITAL  PRO-­‐ •  Digital  Product  Diversity  is  neither  strategized  nor  implemented  DUCT  STRATEGY   •  Paid/Free  Content  debate  is  not  decided  6.  No  DIGITAL   •  No  ACTIVE  SALES  FORCE–  integra7ng  digital  products  &  know  how  SALES  know-­‐how   •  “Space”  selling  rather  than  SOLUTION,  TARGET  GROUP  selling   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   4  
  • 6. Take Over Targets 2: Newspapers with pure advertising based digital business models are „easy prey“ for investors leveraging targets via Paid Content BUY  ANY  „FREE-­‐PHILOSOPHY“  newspaper  &  LEVERAGE  it     Paid  Content  works   by  over  100%  by  introducing  a  smart  PAID  CONTENT  model   2012   2022   Free   Paid  Cont.   Free   Paid  Cont.   #  of  free  apps   30,000   -­‐-­‐-­‐   300,000   -­‐-­‐-­‐   #  paid  apps  (15%  of  free)   -­‐-­‐-­‐   4,500   -­‐-­‐-­‐   45,000   Abendbla_.de  7,95  €/mo     &  Morgenpost.de  5,95  €/mo   CPM/month  (30  views)   100  €   100  €   50  €   50  €  week   week   week   week   week   week   week  51/09   10/10   20/10   30/10   40/10   01/11   13/11   Digital  ad  revenues   1,08  m€   0,16  m€   5,4  m€   0,81  m€   Price/month   -­‐-­‐-­‐   15,99  €   -­‐-­‐-­‐   24,99  €     120.000  subs  3,99  €/mo   Paid  Content  revenues   -­‐-­‐-­‐   0,73  m  €   -­‐-­‐-­‐   11,34  m  €   OVERALL  REVENUES  p.a.   1,08  m€   0,89  m€   5,4  m€   12,15  m€     244.000  subs  15  $/month   >  100%   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   5  
  • 7. If today we had the market penetration of tablets we will have in 5 to 10 years, no western newspaper CFO would give an OK to a new print plant with circulation dropping at least 50% in the next 10 years. Output (mio sheets) 4.000 3.000 2.000 1.500 1.000 Salaries (m€) 200 m€ 200 m€ 200 m€ 200 m€ 200 m€ Invest (m€) 30 m€ 30 m€ 30 m€ 30 m€ 30 m€ 100%   Variable cost/sheet (10 ct) 800 m€ 600 m€ 400 m€ 300 m€ 200 m€ Total cost of ownership 1.030 m€ 830 m€ 630 m€ 530 m€ 430 m€ Cost per sheet 0,26 € 0,28 € 0,32 € 0,35 € 0,43 € Progressive Preissteigerung 22% 28% 37% AmorIzaIon  period  20-­‐28  years   50%  Total  Cost  of  ownership   40%   50  cent   80  cent   130  cent   200  cent   Printed   sheets   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   6  
  • 8. Next Steps? •  Work  out  Digital  Strategy   •  Work  out  a  Restructuring  plan  and  project   •  Work  out  Transforma7on  Cost  1.  Shareholders   •  Get  an  o.k.  to  cooperate  with  other  newspapers   •  Do  a  manager  appraisal   •  Discuss  the  key  necessity  of  an  editor-­‐in-­‐chief  truly  understanding  digital   •  Found  a  joint  M&A  unit  2.  CooperaIon-­‐ •  Found  a  joint  IT-­‐unit  (backend  IT  &  produc7ve  IT)  Network   •  Found  a  joint  service  unit   •  Work  out  your  Digital  Strategy   •  Scope  and  Cost  of  Transforma7on   •  Shareholder  ok  to  Digital  Strategy  &  Digital  Transforma7on  3.  Steps   •  If  “no”  –  convince  them  to  sell  NOW     •  Pimp  the  bride  (execute  restructuring)  –  you  have  to  do  it  anyway   •  Look  for  investors  that  understand  both  the  opportuni7es  of  the  Digital   Transforma7on  and  the  “7me  to  invest”   2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   7  
  • 9. Thank you for your kind attention! Gregor  Waller   Digital  Age  Consul7ng  /  Entrepreneur     Associated  Principal  Consultant     Frenemies  Consul7ng,  a  WAN-­‐IFRA  ac7vity     Digital  Age  ConsulIng   Hoeltystrasse  17   22085  Hamburg   Germany   Phone:  +  49  160  90.410.654   eMail:  waller.gregor@googlemail.com   Twi_er:  wallergreg  2011-­‐10-­‐14   WAN-­‐IFRA  Finance  Session  -­‐  Thesis   8  

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