Monty - his part in his own downfall

The curtain's set to fall on David Montgomery's reign at Mirror Group Newpapers. Ian Hargreaves (below) argues that he achieved little in six years at the top

Ian Hargreaves
Sunday 31 May 1998 23:02 BST
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We do not yet know the script for the final scene, but it is reassuringly clear that the black farce that is David Montgomery's career in British newspaper management is drawing to a close. Having hacked flesh from the bones of every newspaper he has run, the City has lost patience with his failure to turn the proceeds into profitable diversification. The movie may not end with a severed horse's head beneath satin sheets, but it might just as well. It has been a truly gruesome and cautionary tale.

The final plot lines are under construction. Perhaps Mirror Group Newspapers (MGN) will fall to Axel Springer of Germany. Perhaps Tony O'Reilly, whose company controls this newspaper, will snatch a prize he has so often appraised. Perhaps the Irish will look at a partnership with Springer. Perhaps Trinity International will be at the party too, with the intent of applying more suitable management to Midland Independent Newspapers, the Birmingham business for which Montgomery paid a fool's price last year.

Montgomery's aim is to reshoot the film as Local Hero, in which he, the Ulster boy made good, returns to become the province's top media mogul. To achieve this, he must retain personal control of the Belfast News Letter, which MGN bought two years ago. Those who know him will not underestimate either his determination or his deviousness in pursuing this goal. But nor will they ever take him seriously again in the media big league.

What went wrong? The answer is that, of the four areas that count in running a media business - managing creative people well; reading the political and regulatory climate; understanding the industry's core trends; and running a tight ship - Montgomery failed in three.

Only in the tight ship department has Montgomery shown talent, driving down costs with the zeal of a Drumcree marcher, but at the cost of devaluing the brands upon which the business depends. In a declining market, The Mirror has been roasted by a price-cutting Sun, losing almost half a million copies to reach its current sale of 2.3 million. Montgomery's only response to this state of affairs was to cut harder and fire more editors.

He has had about a dozen editors at the Mirror Group tabloids since 1992, and, in the four years during which he managed the two Independent titles, he got through seven.

As one of the seven, I saw at first hand how Montgomery worked, how he refused ever to define a strategy, to agree a budget for more than a few weeks at a time, to build working relationships with senior editorial staff. His only genius was to instil fear; when that didn't work, he would give up on you. I went to edit The Independent not expecting to enjoy Montgomery's company - I have scarcely met anyone who does - but assuming that he would be both driven and effective. I was wrong only about the third of these assumptions.

At The Independent, he would one day wave a copy of the gravely traditional International Herald Tribune, suggesting it as a role model. Next week, he would enthuse about going tabloid. He wanted his papers to be fashionable, but he had no time for the idea that they needed to be good. For The Independent, he mandated a marketing approach based on giving away sports cars whilst cheerfully demolishing the newspaper's library, so that journalists could no longer check facts quickly. And although he demanded daily meetings to discuss figures, he never showed interest in a story; when, one day, an executive from the circulation department made the mistake of doing so, he laughed with such icy scorn that that executive in question took off his jacket and slipped into a body bag on the spot.

He was only at ease when preaching productivity, productivity, productivity. Having got more newspaper pages per hour out of his plant than any other in Britain - with the result, incidentally, that his titles were often poorly distributed - he applied the same approach to journalism.

The idea was that the Mirror and Independent titles, along with MGN's ragbag of other interests, would share reporters, saving money on staff and even on news agencies - at one point, we were told we would no longer even have the Press Association feed. In order to train the required paragons of journalistic versatility, Montgomery created an Academy of Excellence. Irony does not come naturally to him.

In truth, it was all a crude reprojection of Rupert Murdoch's shadow: like Murdoch, he wanted to be in every kind of television and newspaper. But without Murdoch's instinct for newspapers, there was no internal engine of growth, and the Mirror Group papers became his cash cow. The result was an editorial abattoir, where nothing came out alive.

That the City believed him reveals much about the City. Even when the launch of Live TV turned into civil war between rival executives. As editors came and went and market share fell. Even as it became obvious that Montgomery's decision to throw cash and editorial sycophancy at New Labour would not win him a better regulatory deal - vital if his pounds 63m investment in Scottish TV was to pay off. Piers Morgan, editor of The Mirror, told me at the Labour Party conference last year: "I've got my head further up this Government's arse than any editor in history." These were the performance objectives of the Montgomery years, but even here, Murdoch got further faster by giving Tony Blair The Sun.

It was only when Montgomery paid a fancy pounds 297m for Midland Independent Newspapers last year that City fund managers started to act, demanding to impose a chairman. Montgomery has spent over pounds 400m on acquisitions, but the whole company is today valued at less than three times that figure. Relative to the FT All-Share, Mirror shares are back where they started six years ago.

If anyone doubted the emerging disaster scenario, it was confirmed by Montgomery himself as he dumped his own shares in the Mirror and started reversing course. The Independent titles have been sold for next to nothing; Midland Independent is apparently on the block; and Kelvin MacKenzie has been switched from loss-making Live TV to be, in effect, editor-in-chief of The Mirror. Chequebook in hand, he has improved the paper - though not yet its sale.

This film noir version of the Full Monty really has been quite a show. He took the group of newspapers abused in the Maxwell years and made them worse. When he bought he bought badly. And he destroyed value in the company, in spite of operating in the most sustained economic upturn in the British economy since the Sixties. Does Belfast really have to take him back?

The author was Editor of `The Independent' from 1994-95 and will become Professor of Journalism at Cardiff University in October.

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