5 ms·

I feel you are completely overlooking all of the costs the business incurs. The cost of premises, printing costs, image licensing, insurance, marketing budget e

I feel you are completely overlooking all of the costs the business incurs. The cost of premises, printing costs, image licensing, insurance, marketing budget etc etc.

mikekchar 9y ago
I am and I'm not. Normally when I'm looking at financials I break it apart with external costs and internal costs. For the internal costs, you can get an estimate of a reasonable cost with the "loaded labour rate". This is the amount of money it costs to maintain an employee (usually on average). It includes premises, equipment, insurance, and other costs incurred for the work they do. External costs are things like costs for maintaining a sales channel, marketing, etc, etc. In between you often have some capital costs for large equipment (which you usually account for using a depreciation model). As you say, there are also some operating costs for running a printing press, etc. What I did was to divide the total revenue by the number of employees. Then if we make a reasonable guess for average loaded labour rate, say 70K GBP (which I think is probably generous for London) that still leaves us 70K per employee for external costs and various operating costs that are not included in the loaded labour rate. That seems quite high to me. Like I said, I'm not in the publishing business, but even when I worked on shrink wrapped software, I would consider that level to be bleeding money. I could easily be wrong. It would be interesting to hear from someone in publishing.
- icebraining 9y ago
  I expect a world-class newspaper like the Guardian to have plenty of costs that don't fit the regular butts-in-seats of a regular office. They have correspondents living and traveling all over the world, with the associated costs that implies (plane tickets, rented houses, hired guides, bribes, etc).

5 ms·

I feel you are completely overlooking all of the costs the business incurs. The cost of premises, printing costs, image licensing, insurance, marketing budget e

by SilkRoadie 9y ago

I feel you are completely overlooking all of the costs the business incurs. The cost of premises, printing costs, image licensing, insurance, marketing budget etc etc.

mikekchar 9y ago
I am and I'm not. Normally when I'm looking at financials I break it apart with external costs and internal costs. For the internal costs, you can get an estimate of a reasonable cost with the "loaded labour rate". This is the amount of money it costs to maintain an employee (usually on average). It includes premises, equipment, insurance, and other costs incurred for the work they do. External costs are things like costs for maintaining a sales channel, marketing, etc, etc. In between you often have some capital costs for large equipment (which you usually account for using a depreciation model). As you say, there are also some operating costs for running a printing press, etc. What I did was to divide the total revenue by the number of employees. Then if we make a reasonable guess for average loaded labour rate, say 70K GBP (which I think is probably generous for London) that still leaves us 70K per employee for external costs and various operating costs that are not included in the loaded labour rate. That seems quite high to me. Like I said, I'm not in the publishing business, but even when I worked on shrink wrapped software, I would consider that level to be bleeding money. I could easily be wrong. It would be interesting to hear from someone in publishing.
- icebraining 9y ago
  I expect a world-class newspaper like the Guardian to have plenty of costs that don't fit the regular butts-in-seats of a regular office. They have correspondents living and traveling all over the world, with the associated costs that implies (plane tickets, rented houses, hired guides, bribes, etc).