Michael Johnston

By The Drum, Administrator

May 18, 2006 | 8 min read

One view. Two different perspectives. To Steven Walker, former managing director of The Scotsman Publications Limited, the sight from his office window of the Scottish Parliament building inspired vitriol.

From his vantage point, he frequently hurled insults at the place, while his journalistic troops on the floors below bombarded it with as much editorial flak as they could muster.

However, following the £160m takeover of The Scotsman, by the Johnston Group last December, a new general now occupies the office. He is Michael Johnston, who also happens to be the son of former Johnston Press boss, Freddie.

“The view from my window is fantastic,” he enthuses. “You can not only see the Arthur’s Seat, but the Scottish Parliament. And I have to say, I do not mind the building itself at all. The architecture really grows on you.

“But in many ways, the views really sum up the new Scotland. I grew up in both Falkirk and Edinburgh but have not really worked here before now. There is no comparison to what Scotland was like when I was growing up and what it has now become.

“The country generally – and Edinburgh in particular – is now more exciting, dynamic and confident. There has never been a better time to be here.

“The Scottish Parliament is part of all that. I think the institution has got off to a really good start and it is important our papers reflect that.

“Without doubt the Parliament is here to stay.”

The comments have added resonance as Johnston doesn’t seem the type to spout meaningless hyperbole. Looking younger than his 44 years, demure in appearance and sporting one of those English accents the Edinburgh public school system is famed for, he puts one in mind of an archetypal ad agency account director.

But his newspaper pedigree is beyond question. His family set up the Falkirk Herald in the 1760s – and today it operates in 140 local markets between St Andrews and Portsmouth.

He himself started out in journalism, and has a CV that includes a stint with Associated, and then the BBC, where he worked on Newsnight and The Money Programme. His career with Johnston Press led him to the top job at the Portsmouth News before he took the reigns of The Scotsman.

“I enjoyed being a journalist,” he says. “But I think I prefer dealing with the strategic issues. I won’t go back.”

It is interesting, but it means that both The Scotsman and The Herald – where Tim Blott started out on the editorial side of the fence – are now led by former journalists. His style is certainly in contrast to the flamboyance associated with the Barclays.

“They are great entrepreneurs, who are able to work across a wide variety of projects,” he says. “But what we are, first and foremost, is newspaper publishers. We will be able to bring more focus to the business.”

Evidence of that refocus already exists in some trivial ways. The Barclays-commissioned statue of The Scotsman – a bronze bloke reclining on a park bench reading the paper – has been removed from the central foyer. And the only evidence of art in the MD’s office is the bare picture hooks left by his predecessor. Even the commissionaire, who greeted people at the door, has been disposed of.

However, by acquiring The Scotsman, some critics say Johnston Press is perhaps losing focus as a business. Over the years the company has specialised in building a business made up of newspapers which tend to enjoy monopolies in tightly defined geographic regions. Effectively, they are a local newspaper group, for local people.

Johnston discounts this argument. “We have grown from being a successful Scottish business to a successful UK business. And there have always been people who have said things like, ‘you are successful in Scotland, but can you make it in England? You have made a success of weeklies, but can you make a success of dailies?’.

“The answer is yes. Because at the end of the day, the fundamentals of newspaper publishing are exactly the same. It is all about delivering what your readers and advertisers really want.

“Today the group publishes around 15 evenings, although only two mornings – in Yorkshire and Edinburgh – and one Sunday in the form of Scotland on Sunday.

“What we will be doing here is delivering on the brand promise of our three titles – which for The Scotsman, for example is its positioning as Scotland’s national newspaper.”

However, this does not mean the company is on the brink of starting a turf war, with its friends in the West. In fact, avoiding such battles is perhaps another feature of the company’s success.

“We have to play to The Scotsman’s strengths,” says Johnston, “The West is important to the company - particularly SoS, which has a high circulation there. But we need to look at The Scotsman in the round, and there would be no point in charging hell for leather into the West unless it was particularly relevant to the product.”

But there is more to the Scottish market than the central belt. In the North East, the industry was surprised when DC Thomson and not Johnston Group swooped to buy the Press and Journal. Johnston says such issues are of no concern to him.

“There is no point in me worrying about who owns what,” he says. “My job here is to grow this business by ensuring we are the best in the market. It is to ensure we are successful to deliver a return for our shareholders and deliver on promises made to our staff.”

Growth is only one side of the success equation. Cost control is the other. And Johnston says that this will be achieved through group wide efficiencies such as bulk buying, standardisation of IT and the merger of central functions such as finance. The editorial and sales side – apart from changes in Manchester and London – has been left largely intact. So Johnston seems intent on delivering growth through business development as opposed to cost cutting.

And the internet will play an important role on this front. Johnston uses Scotsman.com to illustrate the potential. “It achieves 22 million page impression and 3.2 million unique users per month. In anybody’s books it is a global brand.”

Does he see the day dawning when newspaper companies will not be about putting ink on dead trees? Pointing out that his company is now planning to invest in The Scotsman’s Newhaven printing plant, he says emphatically. “I have absolutely no doubt that newspapers will continue to exist – however, they will need to learn to love and embrace new media.

“At the end of the day we will become information companies – which use a wider variety of platforms.

“There has been no doubt that the newspaper market has had a hard time in the United States as a result of online competition. However, in other markets such as Japan, where newspapers accepted they would have to cannibalise their own classified market to develop online, what you find is the biggest online classified owners are newspapers.

“The Johnston Group already operates an online classified business – which exists as its own brand called Today – but can also be accessed through the websites of every newspaper in the group.

“That means if you log on to the Falkirk Herald site, you will see Falkirk houses first, however, for example, if you want to see what is for sale in Arbroath you can access that through the database as well.

“At the moment our website has something like 200,000 cars for sale. And you have to remember if people want to buy a car, look for a job, or buy a house, more often than not, they want to look in their local areas.

“If you want a specialist car, you might be prepared to travel. But if you live in Falkirk and want to buy a Ford Focus, the chances are you will want to buy it in Falkirk.”

Johnston says The Scotsman will soon get access to this technological resource. The first tangible sign of it will be when its recruitment site starts to offer the CV matching services which is available across the other titles in the group.

But there is no point in hiding the sense of foreboding affecting the newspaper market. Slow-downs in retail, recruitment and motors seem to represent real structural changes, as opposed to normal economic cycles.

The same can be said in the relentless downward trend in newspaper circulations. However, Johnston is adamant that change has always been a constant in the business and should not be feared.

“I have come from the Portsmouth News which was started above a butcher’s shop in 1877,” he says. “It was the very first business in Portsmouth to have a telephone. It has changed beyond all recognition – and the pace of that change continues at very much the same rate. The Scotsman will simply change as its market changes.”

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