No Sassenachs please, we're Scottish

The media north of the border is a small club that will get clubbier if Scottish TV takes over two Glasgow papers. But at least that would keep them out of English hands, says Andrew Jaspan

Most of the players in Scotland's exclusive and at times fractious media village have at one time or another worked for each others' companies. Gus Macdonald, who runs Scottish Television, once worked for the Scotsman before moving to Granada, while Liam Kane, who runs Caledonian (publisher of the Herald and Glasgow Evening Times) once worked for News International, where he became chums with David Montgomery, who runs Mirror Group and its Scottish flagship, the Daily Record. The man who runs News International in Scotland, with its tartanised Scottish Sun, used to run the Daily Record. And so it goes on.

Lost? Well, unless you understand the dramatis personae you miss the real fun going on. What concerns some fearful folk is that Scottish Television's pounds 120m bid made last Thursday for Caledonian would result in the west of Scotland and Glasgow being dominated by one multimedia company. Should the bid go through, and there is little doubt that it will be cleared, then Scottish Television will own Glasgow's daily, evening and freesheet newspapers and a number of magazines and electronic publishing ventures - becoming easily the UK's biggest regional concentration of media power.

All well and good, at least say some in Scotland. But then into the frame steps David Montgomery, the Irish chief executive of Mirror Group, and some fainthearts reach for their salts. Montgomery, through the Mirror Group, runs the Scottish Daily Record and Sunday Mail, and his company has a 20 per cent holding in Scottish Television, where he sits on the board.

Before joining the Mirror Group and STV, Montgomery was on the board of Caledonian and remains friends with Liam Kane, its chief executive. All three, Macdonald, Montgomery and Kane, share the multimedia vision in which many backroom functions are shared - printing, advertising, circulation and accounting functions, databases and pictures. However, the titles retain separate editorial control and "brands" in the market. This is how the Independent, 46 per cent owned by the Mirror Group, operates, and the approach is increasingly in use in the rest of Fleet Street.

When Kane led the management buy-out team that bought the Herald and its sister titles in 1992 for pounds 96m from Tiny Rowland's Lonrho, great fanfare was made over the titles returning to Scottish and independent ownership. However, the past four years have been difficult ones for the stand-alone company, as it had to come to terms with reducing costs, the trebling of newsprint prices and the newspaper price war. The Herald (at 48p, Britain's most expensive daily newspaper besides the FT) has been remarkably resilient, seeing sales drop a little at the height of the price war but now stabilised at more than 110,000.

But the biggest problem facing the MBO team was that no matter how hard they pedalled the bike they couldn't get out of their hole - namely, working for the banks through servicing their pounds 66m debt. The merchant bank Robert Fleming & Co, who with 57 per cent of the equity remains in effect the owner of the papers, has wanted to sell out for some time but realised that it had to wait for market conditions to improve. The bankers had also indicated that they would prefer to sit out for a Scottish buyer.

In April this year, Caledonian announced that they would float the company and began preparing a "pathfinder" prospectus. STV's Macdonald decided on a twin-track approach, based on either mounting an all-out bid for Caledonian or buying into the company. On that basis, Caledonian granted STV access to the books.

Last week, Caledonian changed tack and opted to suspend its flotation and instead seek an agreed takeover by STV. One of the reasons may have been that it found City institutions sceptical of regional newspaper flotations after the lacklustre performance of Birmingham's Midland newspapers and the heavy call on funds made recently by Trinity (to buy up most of Thomson Regional Newspapers) and Johnston Press (to buy up Emap's regionals).

From Caledonian's perspective, many people also favoured retaining some control over what happened to the papers by selling to a Scottish company instead of throwing their fate into the winds of the marketplace. There remains one fly in the ointment, and that is Trinity, which through its merchant bank Barings has announced that they too would like to bid for Caledonian. In the case of Trinity, the swallowing up of Caledonian would lead to many of its functions and, of course, ownership moving south to Liverpool.

Would a dominant STV be bad for Scotland? To answer this, it is important to understand that the distinct and separate nature of the Scottish press has been eroded over the past few years as the English titles have looked avariciously across the border to boost sales. Rupert Murdoch's News International titles, chiefly through the Sun and Sunday Times, are heavily editionalising, while the Daily Mail nearly two years ago cut its cover price to 20p and has seen sales double to almost 100,000. The Daily Express followed.

This competition hit Scotland's main daily newspapers, the Scotsman, the Herald and the Daily Record, although Aberdeen's Press and Journal (now owned by the Daily Mail group) remains largely unaffected and now boasts Scotland's largest daily sale. As a result, the future of the Scotsman and the Herald as stand-alone newspaper groups looks increasingly threatened.

Over the years, one of the chief gripes in Scotland has been how so many of its companies have been taken over only to see their headquarters move south. As part of Scottish Television, Caledonian would remain owned and managed in Scotland and would help to create a strong media group with a distinctive Scottish voice.

There has been speculation that STV and the Mirror Group might want to rationalise the whole media scene in Glasgow by moving the Caledonian newspaper staff into the Daily Record building at Anderston Quay and printing the titles at the Mirror Group's new Cardonald plant. That would allow Caledonian's Albion Street building and presses to be sold, and provide obvious cost savings. Even so, I am told that STV is not considering this option, since it feels that although there can be some strategic alliances between all the papers, the Herald and Evening Times ought to remain as stand-alones and separate from the Record.

With the fire-power of STV, the Herald would get regular promotional access to the Scotsman's heartlands in the east and challenge it in a way it has been unable to do for more than 200 years. The Scotsman group would be forced to forge strategic alliances of its own to counter such a heavyweight domination of the market. But through the Barclay brothers' aggressive and expansionist new management, the papers ought to prove sufficiently robust to any such challenge. They have also launched a price war by cutting the cost of Scotland on Sunday to 50p, and it is expected that they will do the same with the Scotsman in an attempt to push its sale of about 80,000 above 100,000. Their only real fear is that the new STV/Caledonian group might try to launch a Sunday based on the west of Scotland to compete with SoS.

And is this proposed merger likely to go through? Yes, given that Labour, the SNP and the Tories in Scotland have given the takeover the green light. The only danger down the line is that this new media grouping may prove irresistible to a beady-eyed predator. But then Gus Macdonald is a canny fighter who saw off cross-border raiders last time his TV licence came up for renewal and was able to get away with regaining his franchise for only pounds 2,000, allowing him to build up a pile of cash. Now is the time to use it, and indulge in his dream of building a media empire strong enough to force any Sassenach colonisers to think again.

The writer is former editor of the 'Times in Scotland', 'Scotland on Sunday', the 'Scotsman' and, most recently, the 'Observer'.

News
Netherlands' goalkeeper Tim Krul fails to make a save from Costa Rica's midfielder Celso Borges during a penalty shoot-out in the quarter-final between Netherlands and Costa Rica during the 2014 FIFA World Cup
newsGoalkeepers suffer from 'gambler’s fallacy' during shoot-outs
Arts and Entertainment
Sydney and Melbourne are locked in a row over giant milk crates
artCultural relations between Sydney and Melbourne soured by row over milk crate art instillation
News
A scene from the video shows students mock rioting
newsEnd-of-year leaver's YouTube film features playground gun massacre
News
Two giraffes pictured on Garsfontein Road, Centurion, South Africa.
i100
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
Travel
travel
News
Kenny Ireland, pictured in 2010.
peopleBenidorm, actor was just 68
Arts and Entertainment
Adèle Exarchopoulos and Léa Seydoux play teeneage lovers in the French erotic drama 'Blue Is The Warmest Colour' - The survey found four times as many women admitting to same-sex experiences than 20 years ago
arts + entsBlue Is The Warmest Colour, Bojack Horseman and Hobbit on the way
News
i100
Arts and Entertainment
arts + ents
News
people
News
Morrissey pictured in 2013
people
News
i100
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
News
i100This Instagram photo does not prove Russian army is in Ukraine
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Data Analytics Manager

competitive: Progressive Recruitment: My client who are a leading organisation...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Data Scientist

competitive: Progressive Recruitment: A data analytics are currently looking t...

Insight Analyst Vacancy - Leading Marketing Agency

competitive: Progressive Recruitment: A leading marketing agency have won a fe...

Day In a Page

Dress the Gaza situation up all you like, but the truth hurts

Robert Fisk on Gaza conflict

Dress the situation up all you like, but the truth hurts
Save the tiger: Tiger, tiger burning less brightly as numbers plummet

Tiger, tiger burning less brightly

When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
5 News's Andy Bell retraces his grandfather's steps on the First World War battlefields

In grandfather's footsteps

5 News's political editor Andy Bell only knows his grandfather from the compelling diary he kept during WWI. But when he returned to the killing fields where Edwin Vaughan suffered so much, his ancestor came to life
Lifestyle guru Martha Stewart reveals she has flying robot ... to take photos of her farm

Martha Stewart has flying robot

The lifestyle guru used the drone to get a bird's eye view her 153-acre farm in Bedford, New York
Former Labour minister Meg Hillier has demanded 'pootling lanes' for women cyclists

Do women cyclists need 'pootling lanes'?

Simon Usborne (who's more of a hurtler) explains why winning the space race is key to happy riding
A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

A tale of two presidents

George W Bush downs his paintbrush to pen father’s life story
Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover

The dining car makes a comeback

Restaurateur Mitch Tonks has given the Great Western Pullman dining car a makeover
Gallery rage: How are institutions tackling the discomfort of overcrowding this summer?

Gallery rage

How are institutions tackling the discomfort of overcrowding this summer?
Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players

Eye on the prize

Louis van Gaal has £500,000 video surveillance system installed to monitor Manchester United players
Women's rugby: Tamara Taylor adds fuel to the ire in quest to land World Cup

Women's rugby

Tamara Taylor adds fuel to the ire in quest to land World Cup
Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices