Have Middle England's best loved papers lost the plot?

New editor. New ideas. But where is the strategy?

As Patience Wheatcroft held her office farewell at Wapping's Pizza Express on Friday she may have reflected that being chosen as editor of a Telegraph title is dangerously similar to being selected as one of Henry VIII's wives. The job is glamorous and powerful, but the stakes are high and there is every chance of a nasty, undignified exit.

Yet when Wheatcroft, business editor of The Times, announced she was to take the helm of The Sunday Telegraph last week, not even a call from Rupert Murdoch was enough to dissuade her.

Events at the Telegraph Group look more like those at a Premiership League football club than a Fleet Street broadsheet. On Tuesday, Sarah Sands, then editor of The Sunday Telegraph, was picked up by her driver and lured from the office with no inkling that she was about to be sacked.

Her departure, after just eight months in the job, followed similarly unsentimental ejections for Martin Newland and Dominic Lawson, respectively editors of the Daily and Sunday Telegraph, as well as many other executives - such as Sue Ryan, the managing editor and Hugo Drayton - managing director, in a pattern that has provoked a sense of turmoil, low staff morale and a plummeting confidence in the papers' own identities.

Suggestions that the two titles may eventually merge into a seven-day operation - a venture tried unsuccessfully in the 1990s - are adding to staff concern. Behind the febrile, some say panicky, sackings and the influx of executives from other titles, wider questions remain. Just what strategy are the Barclay brothers pursuing for the Telegraph Group and do they possess a coherent vision for their titles? What, exactly, do the Barclays want?

If it was on the couch, The Sunday Telegraph might be diagnosed as suffering from multiple personality disorder. While it was masculine and news-orientated under Lawson, in the past nine months it has undergone gender reorientation.

Convinced The Mail on Sunday readership was ripe for the taking, the group chief executive, Murdoch MacLennan, brought in Sands, who was admired for her editing of the Saturday Telegraph, with its focus on lifestyle and leisure. She likened her £2m relaunch to "your iPod, containing all your favourite things". But Sunday Telegraph readers, not often envisaged with iPods in their ears, did not find their new paper " beautiful, calm, witty, transforming", and Sands was sacked on the back of falling sales.

Yet circulation figures show that she left with higher circulation than when she was appointed. The circulation of 666,031 copies last May, the month before she arrived, soared to 714,992 in November after the relaunch, plunging to 642,256 and then recovering to 683,741 last month.

"MacLennan deserves some credit for realising it had all gone pear-shaped and doing something about it quickly," says one Telegraph staffer.

"It was a joined-up process. We waited until we had recruited Patience and then we got rid of Sarah," adds one influential insider. "The media industry is so fast-moving and newspapers are a business. You take risks and if it doesn't work it has to change."

Sources close to Sands say she's furious that she was fired for carrying out the brief she had been given. Others agree that she has been left to carry the can.

With the appointment of Wheatcroft, in many ways the polar opposite of Sands, the Barclays appear to be performing a U-turn. "Appointing Patience is admitting they got it spectacularly wrong," says a highly placed insider. "Patience is a Thatcherite, tax cutter and Eurosceptic who is politically driven and will bring in scoops. She is a Republican - she thinks Charles is ghastly - but much too astute to allow that to alienate a traditional readership."

Wheatcroft, who worked with John Bryant, The Daily Telegraph's acting editor, at the Daily Mail and The Times, has long been wooed by the Barclays: she was not included in the libel action they are taking against The Times for a piece that appeared on her pages. Her politics are in tune with theirs - she is a confirmed Conservative, whose publisher husband Tony is a Tory councillor. The couple entertain Michael Howard at their home in Kent.

A reluctant supporter of David Cameron, she has warmed to the new Tory leader and, like him, is not a social authoritarian. "She was never going to be rabid on cannabis because she has children that age and knows what kids get up to," a friend remarked.

Her popularity is sullied by few dissenting voices. "Patience is great. The only thing about her is that she doesn't like delivering bad news," said one. An admirer adds: "She has great legs and shows them to her best advantage. At her annual party at Somerset House there is an A list of business people who kiss her and fear her. She is a great networker and has men eating out of her hand." Another describes her as having "a voice lower than an Alsatian's bark and sexy in a dominatrix way".

But however forceful and sexy, will Wheatcroft be enough to turn the tide for The Sunday Telegraph? Since their £665m purchase of the group in 2004, Sir David and Sir Frederick Barclay have appeared to grapple with a strategy for their acquisitions.

"The Barclays' style is to be hands-off," says one who knows them. "They just wanted to own the Telegraph Group and they gave Murdoch MacLennan the job of working out what to do."

Some claim MacLennan's strategy has been to hanker after the Daily Mail's market position at the risk of eroding the strong personalities both papers developed in the Conrad Black days.

The resulting loss of long-serving journalists, not to mention their expensive pay-offs - Sands is believed to have collected £500,000 - has cost the group.

"It's such a shame all the people they have got rid of were very talented and did represent aspects of a successful paper," says a media commentator. "Now they just look like they don't know what they're doing."

The Daily Telegraph hit a record circulation lowin December, with sales slipping below 900,000. Though they rose last month, there are now suggestions of further cost-cutting with a seven-day operation - a suggestion fuelled by the arrival of executives working on both titles, including Iain Martin, the editor of Scotland on Sunday, who is set to join as assistant editor.

A remark from Bryant, when advising staff on their forthcoming move to Victoria this summer, was telling. He said he would work hard to ensure that newspapers remain "at the heart of the group".

"There's a profound change going on here," said one source. " This place was extremely badly run with people using it as a club. We are now doing everything we can to take our content and well-respected brand into any distribution mechanism there is. We are the most successful newspaper pod-casting organisation going. We must now embrace a state of perpetual change."

Now the mighty 'Mail' has bad news of its own

By Michael Williams

It never rains but it pours. Since DMGT, owner of the Daily Mail, put its highly profitable Northcliffe regional newspaper business up for sale, the group has been hit with an unprecedented run of bad news. Two weeks ago, with offers well short of the £1.5bn target it had set, it was forced to take the papers off the market again, causing its shares to fall sharply.

Since then there have been little other than stories of cost cuts, job losses and bad news on both circulation and advertising. With City analysts questioning its strategic direction, the company will this week update the market on very tough trading conditions across all its newspaper operations, and indicate what it intends to do with Northcliffe.

In the absence of an acceptable offer, the short-term fix for Northcliffe has become fairly clear - cut costs, and cut them savagely. Northcliffe currently employs some 8,000 people across the UK, and last year made an operating profit of £102m on revenues of £520m. That is a margin of 20 per cent, compared with the 34.5 per cent that Johnston makes and 35 per cent for Gannett. Bidders for the division were invited to submit offers on the basis that margins would be improved to 30 per cent, which could only be done by taking out up to 1,600 staff.

DMGT, which has always run the business in a paternalistic fashion, is now having to do its own hatchet work - and Lord Rothermere, the dynastic and gentle chairman who has a strong emotional attachment to the titles, is said to be dreading the prospect. Plans for the staff cuts will be unveiled this week, no doubt to be greeted with howls of protest from unions across the company.

"I'd hate to be the man who has to drive that programme through," said one newspaper chief executive sympathetically last week. "It will take a Herculean effort to lift margins by 10 percentage points in a market like this."

The rival chief says that his redundancies cost his group an average of £25,000 a head - which means a minimum cost of £40m for DMGT against the £1.5bn in cash it expected to have in its coffers by that time. There are also significant and as yet unquantified effects on the pension fund, which is already underfunded. DMGT had promised to put around £200m of the Northcliffe proceeds into its pension fund. And it was also going to pay down debt, which will now rise.

The pips are squeaking elsewhere across the group too, with cost cuts reaching into previously hallowed ground. The flagship Daily Mail titles run editorial and promotion budgets that have long been the envy of every newspaper group in the world - and the Mail's editor, Paul Dacre, has protected them fiercely. Last year the division made just £95m on revenues of £878m - a margin of 13 per cent, which has been further squeezed this year by falls in advertising at the Evening Standard and by an increasingly costly venture into the highly competitive Irish market.

Now even Dacre's walls have been breached. Last week Daily Mail executives summoned their section heads to tell them to prepare for major cost cuts across the board. Dacre is said to have called for the immediate elimination of duplication and waste from the editorial budgets while insisting there must be no reduction in standards. A month ago the Mail on Sunday shed 15 jobs, and there have been cuts on the Standard, but department heads have been told the review of costs is only just beginning, with some budgets being cut by 20 per cent.

There was also bad news in the core London market, where DMGT has lost the battle to retain its exclusive rights to distribute Metro. Richard Desmond, who has sworn undying hatred for DMGT, is already gearing up his Express group to launch a rival.

But the worst news of all came from Australia, where DMGT has been trying unsuccessfully to break into the radio market. DMG Radio Australia suddenly dumped its Sydney morning announcer, hired a new programme director and desperately tried to lift the performance of its floundering Vega radio stations in Sydney and Melbourne. DMGT invested A$158m in buying the Vega licences, another A$2m on research to get the formula right and then A$3m in marketing launch costs. Last week the influential Australian Financial Review said the investment had "produced disastrous results", with Vega capturing just 1.7 per cent of radio listeners in Sydney and even less in Melbourne.

"There are no quick fixes," remarked the chief executive of the rival radio group Austereo with a certain degree of schadenfreude. "DMG blew the launch and now it faces a hard slog."

The biggest questions of all, however, are being reserved for the group's hugely expensive march into Ireland. Late last year it launched a Dublin Metro, reckoned to be losing £3m a year, and a month ago followed up with an Irish version of the Mail, which it is selling at half price. On present run rates, the Mail venture alone is costing an annualised £12m a year and, counting in the group's other loss-making titles in Ireland, DMGT's Irish losses are now reckoned to be running at an annualised €40m a year, far more than it has indicated to investment analysts.

Unions and employees across the group may ask why it is prepared to invest so much money in Ireland and Australia even as it makes swingeing cuts across its more genuinely profitable operations.

MEDIA DIARY

By luck or by Crook

A surprise entrant to the field of The Economist's editorship is Clive Crook, who stood down as outgoing editor Bill Emmott's deputy last year. Evidently tired of waiting for the top job, Crook headed stateside to become a senior editor at Atlantic Monthly. Other serious applicants for the job include Ed Carr, business affairs editor; the US editor John Micklethwait, who missed out on The Spectator editorship, and the current deputy Emma Duncan. If successful, Crook would be the first person from without the ranks of The Economist to take the top job in its 160-year history. The interviews are on Tuesday.

Good night, and good...

Is all well between BBC political editor Nick Robinson and his editors on the Six O'Clock News? Robinson was last night understood to have " issues " with his bosses at White City over the way footage from George Clooney's new film was inserted into his Monday evening report about Tessa Jowell's difficulties. The use of the clip certainly didn't seem to have much to do with objective, factual reporting. Robinson may have a justified grievance that his work was being tweaked to look unduly favourable to the Culture Secretary, who is an ally of BBC director-general Mark Thompson.

'Sarah's here to stay'

Always first with the news, the diarists! Or maybe not. Amiable Sunday Telegraph diarist Tim Walker was staring out of his Canary Wharf office window at 11am on Tuesday when his telephone leapt from its cradle. It was Press Gazette, which had got early wind of trouble and was seeking confirmation of the sacking of his editor, Sarah Sands. "No, no, no, old boy," murmured Walker. "Couldn't possibly be true. She's got all these plans for the newspaper. Just getting into her stride, believe me." The Gazette duly took the story off its newslist - until an hour later when the news became official.

Olivia's ode

Clive James's website has a surprising new addition - a homage to the gossip column. James asked Olivia Cole, a poet and scribbler on the Evening Standard's Londoner's Diary, to submit some of her work for his website. Among them is the poem "Gossip Column". It runs thus:

Hats off to me, who has fallen for you.

I've been seen, holding hands, Looking glassy-eyed, with a big grin on my face.

Close to my west London home, I've been spotted with

A real spring in her step an onlooker said. But this morning, when I telephoned myself,

I said I didn't want to say

Any more, as yet.

"It's tongue in cheek but also a precarious kind of love poem," Olivia trills. "I suppose it's also about how as a journalist you could have a few facts, some pictures and still be pretty clueless."

Playing it by the book

For one as status conscious as Sarah Sands, it will be a blow that she never made it into Who's Who, oddly, despite being a national newspaper editor. But her successor at The Sunday Telegraph, Patience Wheatcroft, is already in there. The writing was on the wall all the time... or at least in the pages of the red book.

The Chunder Show

These are stomach-churning times for a BBC film crew who were shooting an item for The Culture Show in Blackpool a few weeks ago. While there, members of the team dined on kebabs from an outlet that is now the centre of a murder inquiry - with reports that the victim's remains may have been served up to unwitting customers. "All I can say is, I'm glad I'm a vegetarian, " says Culture Show presenter Matthew Sweet, who merely partook of a bag of chips.

Red Sky thinking

It's a very brave man who criticises Rupert Murdoch, particularly if he is also receiving the Murdoch shilling. But Andrew Billen was evidently in a reckless mood this week. Writing in The Times, the TV critic noted that: "Scrolling through the nether regions of Sky is now like walking through downtown Depression-era Chicago, encountering three-cup tricksters on every second street corner." Billen goes on to describe how he was suckered into calling up TV quiz lines on one of Murdoch's Sky channels at £1 a pop. Could it be that The Times has a subversive on its hands? Or just a fool?

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