I was fortunate to be at the NANA Newsagent of the Year awards last night in Sydney. The highlight of the night was a panel discussion involving Nick Chan (CEO of Pacific Magazines), Greg Hywood (CEO of Fairfax), Jerry Harris (Managing Director, Group Newspapers and Digital Products), Russell Parker (Joint CEO Hallmark International) and Yasmin King NSW Small Business Commissioner).
It was the information shared by Jerry Harris and Greg Hywood which was most timely and interesting. They each reiterated what their respective companies had announced around two weeks ago.
Jerry Harris explained that News will redraw distribution territories and invite newsagents to tender for this. One newsagent challenged this from the floor of the event, explaining that he felt he was being “shafted”. Jerry Harris copped this on the chin and explained why News needed to control the drawing of the distribution map and why they were proceeding with newsagents tendering.
News will start in QLD in the next couple of months and then move onto NSW and VIC.
News and Fairfax made the point that they need newsagents to make money from home delivery. They acknowledged that newsagents have struggled to do this in the past. I was thrilled to hear them make both points. Acknowledging that many newsagents don’t have profitable runs today is an acknowledgement which has been denied for too long. Committing to a structure through which newsagents are profitable in newspaper distribution is vital.
While associations have said that they want to control the distribution map, this will not happen and was never going to happen. The publishers control the newspapers and own newspaper subscribers. They will assert control over the distribution territories to drive business efficiency.
Mark
when Steve Lewis says they want us to tender do you mean buy a paper run?
The industry better spend some money on re-educating the public as propsective newsagency buyers have been told for decades that a newsagency is only worth the value of it’s territory (retail and delivery).
Well given that they still can’t (or don’t want to) tell newsagents much about it, I sure hope they are still talking to each other!! There is so much efficiency to be gained if they actually reviewed and combined their own approach for bulk distribution to newsagents/distributors each night. Separate trucks to most locations is just wasteful duplication. Also, most areas are usually biased to one main newspaper or the other just based on social demographics. So if News Ltd redraws territiorial boundaries to make Sydney’s suburbs more efficient for them, will that mean one distributor driving around throwing Teles/Aus and another different distributors throwing Heralds/Fins!!
Andy, tender for the distribution rights in an area. I am not sure it’s about paying for it but rather about tendering a price for fulfilment.
The Victorian Association was told by News Ltd and accepted in good faith that Newsagents in Victoria would be allowed to voluntarily amalgamate into larger distribution territories. It appears News Ltd have changed this. It has nothing to do with Associations wanting to control the distribution map, especially in Vic where as you know, this transition to larger distribution operations has already been occurring, driven by proactive newsagents who want to build a profitable distribution business.
will be interesting if they get bugger all tenders in ,i know i will not be putting in a tender for anything , so where do i get papers from ? Newsagency down the road just got direct supply with out having to do deliverys so i should be in the same boat as him
i take back that last comment it is not direct supply
Not sure I follow. So newsagent ‘A’ could have his territory ripped away because he tendered say 60c per delivery and a neighboring newsagent tendered 58c. At the same time newsagent ‘C’ might tender $1.50 per delivery and get it because no one else tendered or he is the only one in a country town. End result is vast differences in the amount newsagents are paid across the board.
Well this is news, but is it clarity ? If you’re an existing newsagent and have invested your capital in what is and will continue to be a viable territory, how can you have any confidence of being a successful tenderer.
Your goodwill, which you paid very real money for, is no longer of any value.
The banks which lent you this money will no longer recognize the asset. They can justifiably call in their loans.
There will be good people, who once thought that they were well off , go broke over this.
This needs a rethink because there will be blood sweat and a lot of undeserved tears before its over.
This comment, made almost as a throwaway line in the forum of a social event, is a cause of confusion and conflict.
Jerry Harris comes across as cavalier and irresponsible. Total lack of gravitas.
Newsagents and their employees deserve more respect, especially as everyone recognizes that they have been doing a thankless and rewardless job for many years.
Ricky, one challenge is that the genesis of this issue can be found in the negotiations on behalf of newsagents in 1999 when the distribution of newspapers was deregulated. Newsagents were poorly represented and the consequences of this are still being experienced today.
So Stephen Kaye gets up at the VANA dinner and says the territory changes / amalgamations will be voluntary.
His mate Jerry Harris gets up at the NANA dinner and says the territories will be redrawn by News Ltd and put up for tender.
There seems to be a bit of a contradiction here.
Were these blokes having a bit of a drink (or a smoke) before they made their speeches, or are they running their own personal agendas using newsagents’ hospitality as their venue.
Its one or the other !
None of these so called clarifying statements can possible mean anything until they are made by recognizably authorised people in an appropriate venue.
We have already had a conversation with our bank about this, they called and wanted to get a revalue on the loan security (the business and assets) because of what they stated was a major change in the business if we did not have rights over the territories going forward. We were lucky enough to explain to them that we do not have a delivery component to the business as we had sold these a few yrs ago and it was retail only and because of this the value was as it has always been with the current loans. This seemed to keep them happy for now but I’m sure “newsagents” will be put in the too hard basket as far as lending goes. All that goodwill washed away with 1 sentence.
Luke I couldn’t agree more. We (luckily)
also have sold our distribution round but
you are right about the banks.
They will start calling in loans of distribution agents if these cowboys keep
talking like this.
Like you said we need a “credible” answer
to our questions.
Surely the ANF is over this??????????????
If not it should be top priority on their
agenda because they should be representing ALL newsagents not just
retail or retail/delivery.
In SA we have 90% of distribution agents
only so I consider that they will be at risk
and certainly their investment in the industry will be in doubt.
We can’t say we weren’t warned but we should be demanding answers ASAP so that those agents with rounds have some
certainty (or not) about their futures.
I don’t belong to the ANF but their
national conference convenes shortly.
Someone who is attending should ask
for this question to be answered.
“as a distribution agent I need to make
sure my business maintains viability for
the future – how do I do this without having surety from my suppliers and how
do I maintain my business if the banks
call in my loans because of the vulnerability of the industry whether real
or perceived? Part 2 of my question is “what is the ANF doing to allay these fears and what were the outcomes of the
ANF’s discussions with the publishers re
this question”
June I think they are working towards surety. The challenge for newsagents is that publishers need to sort this out from their perspective first. I don;t think this is something associations can do all that much on.
So why do we have associations and
what do they do for newsagents either
at a state or federal level – not much – hence membership declining.
It’s a bit like state/federal politics really –
just a burgeoning bureaucracy and some
poor representation!!
June I think to represent newsagents as well as possible on policy and structural matters. however, there are some areas where they can only go so far.
News and Fairfax have been clear that they will control redrawing of territories. Associations can only make their feelings known, they can’t force an outcome.
I would suggest that a lot of newsagents have been doing deliveries at a financial loss for years under the delusion that they were doing it in order to maintain the goodwill portion of the selling price of their business, and that portion has just evaporated. News and fairfax want to control the territories and tender them out in order to limit their own losses but nothing is being done to limit newsagent loses.
In saying associations cannot get involved and represent newsagents in this is like saying unions have nothing to do with industrial disputes. It is all about leverage and I would suggest that a vast majority of newsagents pushing in a certain direction will get a better outcome then everyone going their own way, you are not going to stop it but you can still be involved in the outcome.
I feel for newsagents that still have runs as we sold ours for a small profit and used it to pay down debt but now they cannot even be given away and the loans for cars, machines etc still need to be paid.
Luke I feel for them too but change coming has been on the wall for years, especially ere.
Associations can get involved. My note is more that the real fight was in 1999 and that was botched.
June @ 13
Associations (ANF) are not there to represent all newsagents. They are there to represent their members. If you are not a member you have no claim to representation nor the right to demand action.
Glenn, I couldn’t agree with you more.
I should put my money where my mouth
is but alas, I did that for 30 years and
there were no real outcomes so I withdrew
my financial support.
That doesn’t mean that I cannot advocate
on behalf of other newsagents does it??
Some of us have been around for a long
time and have seen the poor leadership
which lead to poor representation for our
industry.
Anyway free speech is still allowed isn’t it?
if it is going to be a tender process, then others from outside the industry can quote.
John outsiders might be able to tender but it’s unlikely that they will egt very far. The tender idea enables News Ltd to control the reshaping and size of the territories.
They will still prefer to work with known parties where possible.
Are we to assume that News and Fairfax will “collude” over “territories” and declare the same areas for each? Or not ?
KMc
Jees
You have a lot of faith in them wanting to work with known parties. When have they shown that before.
A tender means anyone can submit a price – that means junk mail deliverers, couriers etc.
h, what was said in Sydney by Greg Hywood was that Fairfax would follow what News does in this area. I don;t see this as collusion.
John, What’s the alternative? News in recent months has had a consistent message even if the timing has slipped somewhat. August will provide the clarity newsagents are looking for.
I’d also note that Greg Hywood and Jerry Harris publicly stated support from within their companies for newsagents, profitable newsagents.
John All the signals so far indicate a preferential willingness to work with pro active agents. The only problem is that their pace is so much slower than ours.
We’re taking a collaborative path rather than a combative or defensive one. We don’t have many choices so we think its better to be part of the change rather than be an obstacle to it.
I think this is really exciting news. Distribution has been a chain around a lot of newsagents necks and even though the level of profit is not there anymore some of us have never wanted to give it up. Imagine how much time and more importantly energy you will now have to focus on areas of your business where you can achieve a real profit.
I think we need to start re-branding ourselves as a group away from the image of newspapers and magazines to a more total retail experience where people will not see us as the “paper shop” anymore.
Chris, I am with you all the way.
The “agent” in newsagent has stymied
us as an industry.
We have been used and abused by Aust Post (stamps). Western Union, Ticketek,
Bus tickets, and lotteries to a certain extent. The return from these “agencies”
has always been alluded to as “bringing in
the people who will buy other things”
THAT WAS AND IS WRONG. Those people who want those things are not our
customer base. They are the people who
just want to buy a stamp or whatever because they can’t be bothered going to the AP outlet (even if it is within 2 minutes of the shop).
I am all in favour of changing our name but
we need to discuss amongst us what will
work for us in this new millennium.
We just call ourselves “Browns of Burnside” and we leave the word “newsagency” off our business cards
etc already because when we travel to the
gift fairs etc we noticed that if we told the
supplier that we were newsagents their
eyes glazed over and they were not interested in us.
As Browns of Burnside we get far more
preferential treatment by the suppliers.
Just one area and there would be many more.
Please share here guys/girls.
Just a thought, I thought NANA and other Associations had the right to collectively barging on our behalf. What does a tendering system do to this?