Murdoch’s £650 Million Investment In Three UK Color Printing Plants – And They Are Getting Rave Reviews -- Talks Louder Than Words About His Vision For The Future Of Print Newspapers

Philip M. Stone March 19, 2008

It’s not that often these days that the newspaper business gets a positive press, nor is it often a new printing plant is called a “Cathedral of Technology”, but the UK media has reacted in awe to the three all-color printing plants going on line for News International (NI) in the UK.

We've Come a long way since Guttenberg

It was Rupert Murdoch in 2004 who gave the final okay for the investment for three new all-color plants – one in Scotland, one in Liverpool and the Broxbourne plant outside London. When Murdoch opened the Scottish plant last October he called it “a cathedral of technology” and Clive Milner, News International group managing director, continued that theme with the Broxbourne opening, “By any measure Broxbourne is the largest of our cathedrals and by any measure inspires the most seasoned of publishers.”

The printing plants represent a total £650 million investment ($1.3 billion, €845 million) in UK print newspapers. It’s about as strong a backing one could give to the print newspaper business; after all, talk is cheap but £650 million is, well, £650 million. It means that not only will the Sunday Times, The News of the World, The Sun, and The Times have color capabilities on every page but the Sunday Times that starts printing some sections now on Wednesdays can move that up by a couple of days and it also allows the business pages to close on Saturday afternoon instead of Friday evening.

Not that the investment didn’t come without financial pain for the NI newspapers that had budgets and expenses slashed over the past three years to help pay for the investment – for instance in 2005 editorial had to do its bit as NI charged off £56 million (€70 million, $110 million) for the dismissal of about 700 printing staff in the run-up to the three sites fully coming on-line this quarter.

Although color printing is more expensive than black and white, there is so much computer programming and automation built into the new presses -- including laser guided trucks and conveyer belts moving the paper rolls around the plant -- that the staff numbers are cut by two-thirds, from 600 down to 200, for an estimated annual savings of £13 million ($26 million, €17 million). And in a plant that covers the equivalent of 23 soccer fields the one thing that touring journalists immediately picked up on was how quiet it was and how few people seemed to be running the show -- a point that Milner had emphasized when journalists were invited to the plant for a tour, “One of the things we will see as you go around this plant is the lack of people.”

The comparisons between Broxbourne, the last of the three sites to come on line, and the current printing facility in London is staggering. At Broxbourne which the NI people call the largest printing facility in the world, the 12 full-color Man Roland colorman XXL web-offset presses can each roll out 86,000 copies an hour compared to the existing 36,000 at the London Wapping facility. The facility handles 5,000 tonnes of paper and 100 tonnes of ink weekly and because of a NI specification the new presses can handle tabloid and broadsheet printing at the same time.

James Murdoch, one of Rupert’s sons, now runs News Corporation’s European and Asian operations and he took the opportunity with the Broxbourne opening to emphasize how much News Corp still believes in the power of print, even if it is investing heavily in digital businesses. He said in a statement the investment “should be ample answer to those who believe the business of journalism, in print, is a business for yesterday’s readers, not tomorrow’s. At News, we believe that print will continue to be a driving force, even as we expand in this connected age.”

Milner made a similar point. “Print clearly remains the primary platform for our journalism. Clearly we are extending that with other platforms.”

There obviously is spare capacity at the three plants, and NI officials have been busy signing up commercial customers. The biggest deal so far is the Telegraph newspapers that signed up last year to start once their current third-party printing agreement ends. At the time of that signing Les Hinton, the then News International executive chairman and now Dow Jones CEO, explained, “When our three print sites are fully operational we will have Europe’s largest and most advanced newspaper manufacturing operation. The scale of our operation and the speed of our presses give us an opportunity to generate additional revenue for our business by selling extra press capacity to third-party publishers. Naturally, our commitment to print The Daily Telegraph and The Sunday Telegraph will have no impact on our ability to print our own titles.”

An obvious next customer would be the Wall Street Journal Europe but a NI spokesman said that while that made sense nothing had yet been decided.

Broxbourne will be at full capacity by the end of April with 12 presses. When the Telegraph contract starts it will mean the plant will be printing nightly 1.5 million copies of the tabloid Sun, 550,000 copies of the compact Times, and 600,000 copies of the broadsheet Daily Telegraph. 

The overall message from this investment should not be lost. Whereas the American media is lamenting the latest February results for public newspaper groups showing revenues still sharply declining over a year before with classifieds remaining a disaster, and words like “tsunami” and “graveyard” making the rounds in describing cost cutbacks including newsrooms, it’s reassuring to see an investment of this size in print  -- after all do you really think Murdoch would spend $1.3 billion just to throw it away?

Color printing should mean higher-priced advertising, and color available on every page should entice readers. And if he prints competing newspaper  titles and thus gives them more efficiency with later deadlines and the like, then that can’t be bad for print in general and once again Murdoch will be laughing all the way to the bank!