Newspaper Innovation

De Pers confirmed yesterday afternoon that publisher Cornelis van den Berg was stepping down (see previous). He will stay on as a ‘special advisor’ to the paper.

It is, however, unlikely, that Van den Berg only leaves because of the free business paper – although this little experiment may have helped him on the way out. Only in the afternoon of the first day of the new paper, it was announced that it was a two-days experiment. Perhaps it was not indented as a test-run. If owner Marcel Boekhoorn really did not know about the plan, as was suggested in some media, he could have been responsible for turning the launch into a two-days test.

The business paper may have pushed the publisher over the edge, but the financial performance of De Pers might be a better reason. De Pers lost €20m in 2007. For 2008 a loss of €10m s expected while in 2009 De Pers will loose another €5m. Cornelis van den Berg revealed these data in a candid interview in Belgian daily De Morgen on March 28.

Although this €35 million ($55m) was ‘an awful lot of money’, Van den Berg was not worried: ‘We lost 20 million last year, so what?’ In year 4 or 5 he expected the paper to make a profit of €3m and because ‘healthy’ papers can be sold at ‘ten to twelve times the profit’, the investor can sell it and still make money.

This was a curious piece of calculating with unclear parameters. Is the profit expected in 4 or 5 years and is a possible sale 10 or 12 times a profit? If the paper is sold at 10 times a profit of €3m in year 5, there is a net loss. And even if the paper is sold at 12 times a €3m profit in year 4 the investor would have been better off putting his money in the bank.

But profit is still far away for De Pers, with a net price of €10,000 for a full-page ad, the paper needed at least eight pages of advertising to make a profit. De Pers now has an average number of two ad pages – a little better on Saturdays. Whether advertisers really pay the €10,000 is unclear. With four free dailies competing, discounts might lead to a page price of €2000.

The owner of De Pers, Marcel Boekhoorn – assets estimated at €1.1 billion – can keep pouring money into De Pers. However, he was calling up Van den Berg every week ‘to complain about costs’ according to the publisher. These costs and unclear perspectives might be a good explanation for Van den Berg’s farewell.

Furthermore, Van den Berg might be a problem for a possible sale of De Pers. Van den Berg isn’t actually famous for making friends with other publishers, media buyers and advertisers.

The former publisher always denied that De Pers was for sale. But in fact De Pers has been offered to many publishers in the last months.

Already in June/July 2007, within six months after the launch, news about Boekhoorn contacting publishers was around. Parties involved were De Telegraaf, Noordelijke Dagblad Combinatie, PCM and Het Financieele Dagblad, meaning all major Dutch publishers except Wegener. De Telegraaf was visited by Boekhoorn and his business friend Cees van der Hoeven.

Van der Hoeven made his money like Boekhoorn with selling Telfort shares to KPN. He is more famous, however, because of his involvement in the AHOLD fraud scandal in 2003 after which he was forced to step down as CEO and was convicted for doctoring the books. To send him of a sales trip seemed a pretty desperate move.

De Pers was even offered to Metro International. When the publishers in London did not show interest in the paper, Boekhoorn threatened to buy Metro International instead.

That Wegener was not mentioned is understandable. Editor-in-chief Ben Rogmans was sued by Wegener because he left the company to work in a similar position for De Pers. In De Morgen Van den Berg said that when he was working for Wegener he was most of the time calling his ‘friends’ at Metro about launching free newspapers.

He also blamed Wegener for mistakes they made with the merger of Algemeen Dagblad with several regional newspapers. (Van den Berg himself was in charge of this ‘mistake’.)

After this interview Van den Berg was probably more a liability than an asset for De Pers – with him in charge a sale would be impossible, with him more losses inevitable.

This entry was posted on Tuesday, April 29th, 2008 at 12:25 am and is filed under Titles. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.