Regional media firm in administration: One source says ‘it’s a s*** sandwich, and there’s no butter’, but it appears the business is still profitable - and a rescue package is highly possible.
A successful independent media company – responsible for four monthly farming lifestyle titles and a weekly community newspaper – has been placed into voluntary administration, with managers hoping to sell some or all of it as a going concern.
More than 20 jobs and five titles – Kaipara Lifestyler, Northern Farming Lifestyles, Waikato Farming Lifestyles, Taranaki Farming Lifestyles and Manawatu Farming Lifestyles – are on the line as administrators sort through debts of about $650,000 owed by Dargaville-based Integrity Community Media in Northland, predominantly to the IRD.
Staff are also owed holiday pay.
“It’s a s*** sandwich and there’s no butter,” one source told Media Insider of the situation.
But there might, in fact, be some butter – the administrators, who were called in two weeks ago, are optimistic that some or all of the titles and jobs can be saved.
The Kaipara Lifestyler has been published, as usual, today and last Tuesday, carrying a hefty number of ads in its 24-page editions – among them last week: an advertisement for the sale of the publishing business itself.
According to Integrity Community Media’s website, this incarnation of the company stretches back to 2007, “when it was decided to lift the existing business North West Multi Media Ltd, and develop it into a company from which the owners could receive a good return while only requiring their input in a governance capacity”.
Over the two decades, it has expanded and retracted, with the addition and then loss of some titles.
However, like many media businesses, it appears to have struggled in a tighter economy and advertising market, although the administrators say revenue streams are now looking solid.
“My suspicion, and this is simply a suspicion, is that they must have gone through a period at some point where it dropped off, which has caused the situation it’s in,” administrator Ben Francis, of Blacklock Rose, said.
“But as it sits right now, there’s a reasonable amount of advertising revenue for these publications.”
He told Media Insider that some of the titles appeared to be still viable, while others had more difficulties.
“Our role as administrators is to see if we can find a buyer for either all or some [titles]. To see whether some of them can be sold off, then potentially we can look at a salvage package for whatever’s left.”
Francis said there had been “a couple” of early inquiries from potential buyers.
“Hopefully, we’re going to be in a position to have a full information memorandum out once the first creditors’ meeting takes place ... then we can go to market more aggressively. There have been a couple of early inquiries, but at this stage, it is very early days in that process.
“I’m certainly optimistic that the situation doesn’t need to be dire and that there could be a positive outcome, but obviously there’s no certainty.”
Blacklock Rose’s Garry Whimp said the business had 23 staff, including two contractors. Most of them are based in Dargaville.
“They have a very loyal [customer] base with these publications; with the advertising turnover, we expect to have some serious interest in these.”
He said it was “pretty tough” for owner Allan Mortensen.
“He’s working through it – it’s pretty tough for someone at his age and a lifetime of business. This is his baby – the people there, he’s pretty loyal to them.”
Francis said: “It’s probably too early for us to really conclude what has happened. It clearly has some financial stresses but ultimately, we think there’s some part of a good business there.
“It’s just got into a little bit of a situation where it needs a bit of help.”
Staff and management were all co-operative.
There was one secured creditor owed about $150,000. Preferential creditors, including the IRD and staff owed holiday pay, equated to about $400,000. About $100,000 is owed to unsecured creditors.
Allan Mortensen was reluctant to comment.
“It’s not good, but that’s life and the IRD don’t have a sense of humour,” he told Media Insider.
“The debt with the IRD, the number grows quite dramatically with their interest, ecetera. I don’t particularly want to dwell on that or comment on it, to be quite honest.
“It is what it is. It is sad. It’s been a whole lot of my life. I started the business here in Dargaville, and it’s been a lot of good years.
“Business is always a rollercoaster ride. There are highs and lows and unfortunately, we’ve ended up where we are. I feel pretty sad about it, and I feel pretty sad for everybody involved.”
He said administrators were working through a possible sale process.
“Until they’ve gone through that process, they could end up with enough money that satisfy the debts and everything comes out on the right side of the ledger. That’s a distinct possibility.”
He said he was no longer involved in the company.
“When it goes into administration, you end up being very lonely, very quick, because you have no say. You’re not supposed to be talking to anybody, influencing anything. You’ve got to let it go through a process.”
Asked if he could explain how the IRD debt, in particular, came to accrue so quickly, he said: “No”.
“It’s a really sad thing all around. And the numbers you’re just quoting are reasonably new to me. I couldn’t be commenting on any of them.”
For senior manager John Pickworth and other staff, it has been a bruising experience. Pickworth has been with the company for more than a decade, and says it was a surprise when administrators were called in.
“Nothing’s ever truly out of the blue. It’s like pretending you don’t know your girlfriend’s pregnant – it doesn’t really come out of the blue, does it? But yeah, it did – that’s for sure.”
Staff had been going through a cycle of grief since the announcement. They were “deeply bruised”.
“I think the initial state of confusion has gone, and disbelief. For nearly all of us, this is a brand-new experience. Some of the staff are still descending to the bottom, into the gloomy pits of ‘woe is me’ and being angry, others are already ... out the other side, seeing a brighter future.
“If you’re familiar with the cycle of grief, you’ll understand what I’m saying to you. We have a fantastic entourage of people here.”
He said the workers’ focus had been on what the business was about – “producing really quality publications ... we’re deeply proud of all five of our mastheads”.
He said the company was strong at telling people stories, which was a significant point of difference in rural publishing.
“We don’t teach people how to grow grass. We talk about people’s lives, who they are, what made them who they are and how they got to be where they are and why they chose to do what they’re doing.
“Humans, by rote, are very curious and inquisitive people. We all want to know what the other herd over the hill is doing; what’s the other tribe up to? We tell those stories, and we have a very content-driven business. We’ve got a really strong business model because of the content.”
Pickworth said the papers were doing well. “We love our business, it really matters to us. We want people to look kindly upon our mastheads. There’s a lot at stake.
“Whatever has happened behind us has gone ... we’re trading very well.
“We’re paying all Blacklock’s bills, and they’re paying us. Should we be in the fortunate position to have an interested party for some or all of the business, it will come as no surprise to us if that does happen.”
Francis said the administrators were continuing to trade the company, which showed their level of confidence. That was being continually assessed.
“If it becomes clear one or two of them [the titles] are causing more cost than the value, then they’ll probably be shut off.
“The staff are co-operative and they believe that they can work with us to get a result. Without them, there’s no prospect of a successful outcome.”
Editor-at-Large Shayne Currie is one of New Zealand’s most experienced senior journalists and media leaders. He has held executive and senior editorial roles at NZME including Managing Editor, NZ Herald Editor and Herald on Sunday Editor and has a small shareholding in NZME.
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