Stephen Glover: Murdoch gambles on the ultimate insider
Monday 29 June 2009
Rebekah Wade – or Rebekah Brooks, as she now mostly calls herself following her recent marriage to Charlie – very much wanted to be chief executive of News International. Rupert Murdoch, the 78-year-old controlling shareholder of the parent company News Corp, is evidently besotted with her. Rebekah has got what she craved.
But her appointment is a huge punt. The 41-year-old newspaper diva is clever and well-connected, but such qualities do not of themselves make a good top newspaper manager. Her experience of the business side of newspapers is practically nil, and a part-time course in management at the London School of Economics hardly prepares her to be chief executive of the largest national newspaper group in Britain.
In normal times Mrs Brooks could perhaps learn on the job. These are not normal times. News International has at least its fair share of serious problems. It is not making profits. In the year to 29 June 2008 The Times and Sunday Times lost £55.1m. Over the same period The Sun and the News of the World – traditionally the company's money spinners – made only £51.3m, while the freesheet London Paper lost nearly £13m. These figures will have worsened over the past 12 months.
Rebekah Brooks has problems on two fronts. On the one hand, The Sun and, to an even greater degree, the News of the World are in the throes of a long-term circulation decline, which predates the current contraction. During her six-and-a-half year stint as editor of The Sun, the paper mislaid average daily sales of some 600,000 to just under three million copies. It is scant comfort that it slightly increased its market share.
On the other hand, News International faces the same grim advertising outlook as everyone else. Steve Balmer, chief executive of Microsoft, predicted last week that when the recession is over broadcasters and newspaper publishers will discover they have a smaller share of the advertising market, and digital a larger one. He calls it a 'reset'. As an internet man, he has an axe to grind, and let's hope he's wrong. If he isn't, the implications for large publishers such as News International are dire.
Such challenges would tax the ingenuity of the most brilliant and experienced newspaper person in the world. In fact, they obviously do, because Rupert Murdoch doesn't seem to have any solutions, other than to talk vaguely and unconvincingly about British papers getting some revenue from the net by charging for access. I doubt there are many other brainwaves for generating new income.
Rebekah Brooks must therefore undertake interminable rounds of cost-cutting in all of News International's activities. This may be a great shock to her, as well as a test. It is one thing for an editor to agree to a few journalists being made redundant, quite another for a chief executive to take out a magnifying glass and peer at every area of expenditure. The only journalist-turned-executive I know of who has thrived on such a process is David Montgomery. For someone such as Mrs Brooks, who has declared her belief in newspapers and the future of journalism, it may be a debilitating experience.
There are, however, a couple of areas where she can get stuck in without doing journalism any damage. The online operation at The Times and Sunday Times is overstaffed. She should also take a close look at the loss-making London Paper. Last year there were talks between James Murdoch, Rebekah's new boss and executive chairman of News International, and Associated Newspapers, which owns a rival freesheet, London Lite, also loss- making. It makes no sense for both publishers to struggle on with these two titles, and they should agree to a merger.
After that, the options begin to get tougher for Mrs Brooks. She wanted the money (I'd say about a million and a half pounds a year to start with) and the power and the glory, but she, and Rupert Murdoch, may end up by wondering why she exchanged them for The Sun.
Why BBC expenses are more outrageous than those of MPs
Kelvin MacKenzie, the former editor of The Sun, was in an unusually benign mood on BBC1's Question Time last Thursday. He asserted that the BBC expenses, just released, were unobjectionable. In fact, many of them would not be allowed in a profitable private company.
I can't believe Kelvin would have ever charged £2,000 on flowers, as did Jana Bennett, the BBC's former director of television, including £100 for a congratulatory bouquet for Jonathan Ross as he considered signing his £18m contract. (I'd say a wreath would have been more in order.) I'm pretty sure he would have never dared submit expenses for £1,624.48 for two days' hire of a driver and a car in Las Vegas, as did someone called Erik Huggers.
Remember these BBC executives are much better paid than any MP (nearly 50 earned more than the Prime Minister's annual £194,250 salary), and yet many made claims they should have met themselves: a £99 bottle of champagne from Mark Thompson, the director general, as an 80th birthday present for Bruce Forsyth; two iPods for Ashley Highfield, the former director of new media, paid £466,000 a year; a £14.99 "QPR history book" for Mark Byford, the deputy director general, annual salary £459,000 a year.
The story goes on: hair styling; a teapot; parties held in executives' houses and paid for by the licence payer; a teddy bear; a pair of cufflinks; endless lavish lunches and dinners whose benefit to the BBC is not at all apparent; staggeringly expensive stays in luxury hotels by executives when serviceable mid-range hotels were available. These claims are in some ways more outrageous than those of MPs.
So I don't agree with those who say they are beside the point. They illuminate the self-indulgence and carelessness of BBC executives who have been living high on the hog at the expense of licence payers. Far too many of them are also being paid whopping salaries. It is nonsense to argue, as the BBC does, that they receive the market rate. The rest of the broadcasting industry is a mess, and in no position to pay such salaries. How many of these countless executives could command equal amounts in any other walk of life? Practically none.
Mark Thompson tried last week to win plaudits for openness, though the BBC had been driven to disclose these details as a result of Freedom of Information requests and newspaper pressure. The most shocking aspect of the affair is that much information has, in that new, mealy-mouthed word, been "redacted". Mr Thompson still won't tell us what BBC presenters and stars are paid, or the expenses they claim – information that really would shiver our timbers. Until he does, the battle for greater openness and accountability at the BBC will go on.
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