Media Analysis: `The Star pays the bar bill'

WHEN STEPHEN Grabiner, Lord Hollick's first managing director of Express Newspapers, arrived at Ludgate House, he cheerfully admitted to the senior editorial staff of The Star that no one knew what The Star was for. He had a suspicion, he said, "that it just pays The Express's bar bill". If so, he declared, it would be bad news for the paper.

Difficult as it may be to believe, after the paper's staff has been cut by half in a year, Grabiner put a team of management consultants to work looking at The Star, and eventually concluded that The Star was very important indeed to the group.

The paper makes an operating profit and, on paper, shoulders an apparently disproportionate share of printing and distribution costs compared with the Daily and Sunday Express titles. This year its profits and shared costs will be worth just under pounds 15m to the Express Group. That is a very big bar bill.

The loading of costs from the Express titles to The Star makes its journalists feel resentful, but one senior executive on the paper can see the sense in it: "It would take a vast investment in The Star to even take it up to 1 million copies a day in the present red-top market," he says. "So the primary newspaper properties for the group have to remain the Express papers. That is where the investment has to go."

And the present red-top market is the problem. The Mirror has stemmed its sales slide by making itself more serious. The Sun is looking longingly at the Daily Mail's readers and looking to bring in more women. So The Star tried modestly to do a similar thing. When it redesigned earlier this year, the idea was to broaden its readership. The number of topless women was cut and more sport was added.

Sales did not increase, and the paper was flooded with complaints from its core readership - 18-to-35-year-old men. The nipple count was swiftly restored to its old high.

Senior executives say the redesign was mistimed - many wanted to see it held back until there was money for promotions, and for the start of the football season. The only promotion the paper received was a price cut to 20p in the Granada television region, and some television advertising in the same area. The Sun and The Mirror, which can dwarf The Star's pounds 3m annual marketing budget, immediately cut their price to 10p in the region.

All of which has left The Star back where it started. Admittedly the redesign freed up some pages for more sports coverage - and there is hope that this may stem its 11 per cent year-on-year sales slide - but executives admit that the experiment did not work and it cannot abandon its niche. Indeed the advertising team sees a positive advantage in its having the highest proportion of 18-to-35-year-olds of any newspaper. Those mainly northern, mainly male, readers are attracted by a simple formula. Put Pamela Anderson or Jo Guest on the front page and sales immediately rise by 30,000.

It appears that the strategy now is to keep doing the same thing - but at an even lower cost. The redundancies announced last week will reduce the 151 journalists to 106 - making it by far the smallest national paper - and the group also said that there would be a pounds 3m investment in its newspapers.

It pointedly said "newspapers", not The Star. The bulk of the investment will go to The Express titles. Staff optimism is not helped by the fact that the last tranche of investment The Star was promised ended up going on the last round of redundancies and a new computer system. Hollick is a firm believer in not spending money on his operations until they are as efficient as they can be - in other words, until they have had their costs stripped right out.

The question is, what kind of newspaper will be left after the cuts kick in? Phil Walker - the editor who left last week, rather than oversee another round of cuts - is known to believe that the greatest danger to the newspaper is the current state of staff morale.

That will hardly be helped by the feeling that the paper's reason for existing is simply as a useful accountant's trick.