Stephen Glover: £40m sale of family silver may not go far at ‘The Guardian’
Monday 21 December 2009
The Guardian may now be housed in fancy offices near Kings Cross, complete with their own theatre, but its spiritual home is Manchester. There, some hundred years after it was founded in 1821, the paper joined forces with the Manchester Evening News. The usually loss-making Guardian was for years subsidised by the profitable afternoon newspaper.
The news that Guardian Media Group (GMG) is thinking of selling the Manchester Evening News is therefore significant. This is not some recently acquired bauble that can be carelessly cast off. The significance is all the greater if The Daily Telegraph, which broke the story, is correct in suggesting that the Manchester title might fetch less than £40m, though it was supposedly worth £200m several years ago. Like all regional newspapers it has suffered from the advertising contraction, and sales have fallen. The days when it could subsidise The Guardian have long passed, and I doubt whether it is making any money.
GMG’s apparent willingness to flog off what was once thought of as the family silver suggests its management has woken up to the weakness of its position. Here is a company which by its own (possibly unwise) recent admission is losing £100,000 a day on The Guardian and The Observer, which we might round up to £40m a year. In such circumstances it has to consider selling anything.
Unfortunately, other assets are looking peaky. GMG also owns a stable of unprofitable regional papers, and half of Trader Media Group, publisher of Auto Trader, a once highly lucrative but now slowly declining asset. In 2008 GMG bought Emap, the business-to business publisher, with Apax for £1bn. Last week debt-laden Emap warned of “significant doubt” that it can continue as a going concern if economic conditions worsen and renegotiations fail with its lenders. Earlier this year Apax wrote the value of its investment in Emap to zero, though GMG has not followed suit.
GMG’s non-newspaper assets are far from buoyant, and £40m or so from the sale of the Manchester Evening News won’t go far. The long-term future of The Guardian and The Observer can only be assured if there are more substantial cuts to their costs than have so far been contemplated. In recent years cost control broke down as staff numbers ballooned, swanky new offices were acquired, and some £100m was spent on unnecessary new presses.
Will they ever wake up? There are still over 800 journalists, and as many commercial staff, on both papers and their website. The Guardian behaves as though it is The New York Times when it is, in fact, a newspaper selling just over 300,000 copies a day with an expensive website that may have attracted some notoriety in North America but is far from paying its way. Redundancies planned at the moment do not begin to address the scale of the problem.
GMG’s management has some good business brains, yet it seems incapable of applying tough business logic to its national newspapers, probably because of the power of the Scott Trust, the ultimate owner, and the enormous influence of the editor-in-chief, Alan Rusbridger. If editors are allowed to hold too much sway over the business side of newspapers, you may end up with no business at all. With that thought, I wish everyone a happy Christmas.
Named and shamed – but not identified with the ‘Telegraph’
One little-noticed aspect of The Daily Telegraph’s tireless coverage of MPs’ expenses scams is that it has involved two of its own former journalists. This seems quite a high hit rate.
Julie Kirkbride, the Tory MP for Bromsgrove, worked on the political staff of The Daily Telegraph from 1992 to 1996. Last May she informed her constituents that she would be stepping down at the next election after the paper had revealed that she and her MP husband had claimed on their Parliamentary expenses for both of their homes.
Last Friday the Telegraph splashed with a story that Sion Simon, a junior minister, had paid more than £40,000 in expenses to his sister towards the rental of a home in London. The paper quoted Mr Simon as saying he had “inadvertently broken the rules” and would repay £21,000.
What the story did not mention – and surely should have – was that Mr Simon wrote a column for The Daily Telegraph from 1997 until 2001, and was until recently an associate editor of its sister publication, The Spectator.
I suppose the lesson is that the Telegraph no longer protects its own.
Tiger and the libel laws that have too many teeth
A couple of weeks ago I wondered whether, had Tiger Woods been British, he would have applied to our courts to suppress stories about his sex life that have appeared in the media. I spoke too soon.
Mr Woods has won an injunction banning the English media from publishing new details about his personal life after instructing the London firm Schillings. The judge who granted this injunction was our old friend and supporter of a free Press, Mr Justice Eady.
What was odd about the injunction is that it referred to nude pictures of Tiger Woods which his lawyers say may not exist. In other words, it is possible to obtain an injunction in respect of publication which may be purely theoretical. I suppose any of us, if we had the money, might pop along to Mr Justice Eady to seek a kind of belt-and-braces injunction covering every eventuality.
Mr Woods could not have obtained this injunction in America. If only his lawyers had been a bit quicker on their feet, they might have been able to prevent publication of more or less the entire story in this country. We are the world centre for libel tourism.
Mr Justice Eady has also presided over a case involving the oil-trading company Trafigura and the BBC. Last Friday BBC2’s Newsnight began with an unusually abject apology which wholly retracted allegations made in an earlier programme linking Trafigura’s gasoline waste in the Ivory Coast with deaths and long-term injuries.
Some believe that the Corporation capitulated too soon. According to John Kampfner, the chief executive of Index, “the BBC has once again buckled in the face of authority or wealthy corporate interests . . . This is a black day for British journalism and, once more, strengthens our resolve to reform our unjust libel laws”. But will anyone?
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