16th January 2009 Our Ref: SR/NS4 STRICTLY PRIVATE AND CONFIDENTIAL MINUTES OF A MEETING OF THE COUNCIL AND HALF YEARLY MEETING OF THE NEWSPAPER SOCIETY held at The Stationers Hall on Thursday 4th December 2008 In attendance: Michael Pelosi (President) (Chair) David Fordham (Vice President) John Fry (The Hon Treasurer) Geraldine Allinson, Tim Bowdler CBE, Robin Burgess OBE, Paul Davidson, John Dickinson, Simon Fairclough, Douglas Graham, Hubert H. Hirst, Adrian Jeakings, Michael Johnston, Martin Lusby, John Reid, Deidre Romanes, Alan Rubenstein, Moira Sleight, Sir Ray Tindle CBE DL, Russell Whitehair Director, Communications Director, Marketing Director, PERA Director, Accountant, Intelligence Manager, AdFast General Manager Apologies: Apologies were received from other members. 1. Minutes The minutes of the meeting of the Council on 9th October 2008 were approved. 2. Matters Arising BBC: The President noted the successful outcome of the NS led industry campaign with the BBC Trust’s (provisional) refusal to approve the BBC Local Video proposals. 3. Adfast Report John Reid reported on the effect of the implementation of the new business model in 2008 and developments proposed for 2009. 4. Marketing and Communications The Marketing Director reported on the success of Local Matters - evidenced by such examples as that week’s presentation to 40 public sector delegates in Northern Ireland. Projects with Continental Research on Retail, Property and Motors would roll out in the New Year. Agency Training days, dialogue with agencies, clients, the ad action team, ‘wanted ads experience’ days for media planners, MSQ training have all continued the overall NS marketing activity in 2008. The latest benchmarking exercise was about to commence. The 2009 activities proposed would be formulated with reference to the proposed budget and would be considered by the Marketing Committee. The NS Board would conclude its review of marketing in the New Year. The Communications Director reported that the Portfolio Audience Project and its invention of an Internet audience planning currency covering most of the regional press, looked set to be an example of industry innovation. The system would be tested in the New Year with the aim of going live with combined data for the main JICREG release in April 2009: Internet figures would be shown alongside print readership figures within the JICREG planning system; duplication would follow later in the year, showing the net reach of digital and print within a business area. ABC were conducting a review of back-checking in order to effect improvement of verification of free distribution. However, an interim measure had been proposed by a regional press member and was being assessed. This suggested that reduction in the percentage of random back-checking calls might reduce costs considerably, without detriment. 5. IPF Report Geraldine Allinson reported on the IPF’s support for the NS and its intention to continue to use the IPF meetings as a forum for topical discussion and the sharing of innovative ideas between members. The IPF would also run a seminar in 2010. 6. Director’s Report, including PERA Report Tim Bowdler was thanked for his outstanding chairmanship of PERA. Council agreed that Mark Dodson should become Chairman of the PERA Committee and that Adrian Jeakings and Paul Vickers should join the Committee. The Director reviewed how all parts of the NS and industry had contributed to the success of its five year campaign on the BBC, which for the first time had forced such a scale back of a new service. He emphasized that companies now needed to cultivate their relationships with their MPs and brief them on the current commercial and economic challenges; the case for public sector advertising in the press; the need for curbs on public sector media ambitions, given their impact upon the local press and local democratic and independent oversight; urge the issue of helpful guidance to the competition authorities on media mergers, support for self regulation and the PCC in the light of the latest Select Committee inquiry, and support for the industry’s engagement in the current discussion on the future of public service broadcasting and Digital Britain. Reviews were currently underway of NS activities, including marketing and the NS/NPA relationship. In view of the proposals for reduction of subscriptions, which would necessitate reduction of NS staff and services, members were asked to respond to the requests for their views on the NS’s future form and activities and level of funds necessary to sustain them. 7. Treasurer’s Report John Fry paid tribute to the work of Michael Pelosi whom he succeeded as Hon Treasurer. The Treasurer referred to the draft minutes of the recent NS Board meeting and noted that The Board had recommended that any pension recovery payments for 2009 should be taken from the NS reserves. Its agreement in principle in respect of future accrual and the pension scheme were subject to discussions with the Pensions Trustees, NS employees and appropriate legal advice. The Board had recommended that NS subscription revenue should reduce by at least 15%, principally by reduction in marketing project expenditure and redundancies, as reflected in the draft budget. The Board had recommended that any surpluses at 2008 year end above £10,000 in respect of Adfast and the NS be refunded to NS members in 2009. The forecast surplus would in any event be reduced by the costs of consultancy (BBC) and redundancy. Discussions between the NS and NPA might lead to further re-structuring and savings. The Board would conclude its review of Marketing in the New Year. The draft Budget reflected the reduction in commercial and investment income volumes caused by the business challenges which the NS and Adfast would face in 2009. The Treasurer reported that the 2009 Budget was therefore necessarily a draft budget which would require adjustment during the year. The reduction of NS subscription and expenditure in response to the economic challenges faced by the industry would inevitably lead to reduction in services to members, staff availability, NS activity and industry projects. It would be necessary to strike the right balance - and constant review would be needed - to ensure the viability of the NS in representing and protecting the industry’s interests. NS 2009 Subscription Resolution The members in Council and in general meeting unanimously approved the subscription resolution for 2009 as circulated in the Council and Half-Yearly agenda papers and proposed by the Hon Treasurer (attached). 8. Presentation by Mike Waterson - Advertising Trends Prediction (Presentation previously circulated and available on request) 9. Date of Next Meeting The next meeting of the NS Council would be held at the NS offices on Thursday 19th February at 2pm. 10. Date of 2009 Council Meetings 19th February; AGM/Council 14th May; 15th October; Half Yearly/Council 3rd December Subscription Resolution for 2009 proposed by the Hon Treasurer and Approved by Members in the Council and in General Meeting on 4th December 2008 IT IS RESOLVED pursuant to Standing Order 15 that:- 1) The provisional annual Subscription, due and payable on 1st January 2009, and invoiced accordingly, for each Member shall be calculated as follows: (a) The Aggregate Subscription Total (hereinafter defined) for the year commencing 1st January 2009 (being £1.955m) shall be apportioned between members in the same percentage as each member’s percentage share of the aggregate of all members’ gross advertising revenue (hereinafter defined) for the year commencing 1st January 2007 bears to such aggregate, subject as specified below. (b) The share of the Aggregate Subscription Total so apportioned to each Member shall be that Member’s provisional annual Subscription, subject to the maximum Subscription, minimum Subscription and, as otherwise set out in this Resolution and the Newspaper Society’s Rules, Standing Orders and Appendices. (c) That subject to the further provisions contained in this Resolution, the final annual subscription for the subscription year commencing 1st January 2009 shall be determined by the Newspaper Society Council by the end of July 2009. (d) That the minimum Subscription be £2,000. (e) That, each Member’s Subscription shall be subject to a maximum of £361,000. 2) For the subscription year commencing 1st January 2009, the maximum increase or decrease in each Member’s Subscription, in comparison with its 2008 Subscription, as a result of the application of the above formula (other than an increase or decrease attributable to the acquisition or disposal of another member and its combined Subscription obligations, and subject to the maximum and minimum Subscriptions) shall (save in the case of a Member who did not pay any Subscription in that year) be limited to an amount equal to 5% of that Member’s Subscription which was payable for the subscription year 2008 and invoiced accordingly, adjusted to take into account the reduction in the subscription total from £2.3m to £1.955m. 3) Each member will supply any and all such information requested by the Society by any date specified, for the purposes of any subscription assessment and calculation for such year as may be required. 4) Auditors’ certificates should not be required in respect of 2009 subscriptions. 5) For the purposes of this Resolution the following terms shall have the meanings ascribed to them: i) ‘The Subscription’ means and shall henceforth include the Subscription payable for the subscription year commencing 1 January 2009 by each member comprising the aggregate of what were formerly known as the Newspaper Society Subscription, the Newspaper Society Marketing Subscription and the Generic Subscription irrespective of whether any member previously paid all such subscriptions ii) The ‘Aggregate Subscription Total’ means the maximum overall total Newspaper Society Subscription revenue, (being the aggregate of all Members’ Subscriptions,) as recommended by the Management Committee and approved by Newspaper Society Council as being necessary for the funding of its requirements for the ensuing Subscription Year. iii) ‘Total gross advertising revenue’ means the total gross advertising revenue for all UK operations, excluding Scotland, of each Member for the relevant year, consisting of the total gross display and classified advertising revenue, before agency commission is deducted, but after any series and other discounts on published rates are deducted, and including such revenue from regional and local newspaper titles, colour supplements, niche publications, sponsorship, inserts and leaflets. iv) ‘The relevant year’ means the calendar year to 31st December 2007. In the case of any Member who first joined the Society after 1st January 2007, the relevant year will be the first twelve months of membership; and in the case of any Member who first joined the Society after 1st January 2008 shall be the period to 31st December 2008 grossed up for 12 months. 6) Members undertake to take over the combined subscriptions’ obligations (including the Subscription) of any Member Company, which they acquire, for a minimum period of twelve months.