World at his feet: the maverick who's bought Le Monde
As a teen he made a fortune from sex lines and peep shows; now he's running France's legendary newpaper
Thursday 01 July 2010
Imagine a fortysomething, self-made billionaire who wears jeans and resembles the road manager of an ageing rock group. Imagine a visionary, some would say ruthless, business tycoon who supports radical left-wing causes. Imagine a chieftain of the internet age who has just saved from bankruptcy one of the most distinctive, and until recently most unreconstructed, icons of the "old" print media.
Imagine a man whose business interests have ranged from sex shops, to internet innovation, to the rights to the greatest of karaoke classics, "My Way". Imagine a billionaire whose idea of fun is to climb down manholes and explore, with a group of friends, the forbidden quarries and catacombs below the Paris sewers and Metro.
To find anyone who resembles the 42-year-old Xavier Niel, you would probably have to go to northern California and scour the catacombs of Silicon Valley. Even there, you would be lucky to find someone who has defied so many traditions and confused so many genres.
Some people have described him as the "French Bill Gates". That does not begin to define Mr Niel's contradictions and oddities. But it does point to his breathtaking achievement in building, from nothing, an innovative business empire in a country so supposedly tradition-bound and anti-business as France.
This week Mr Niel bought "the world". He was one of three disparate French business figures who made a successful joint bid to take over Le Monde, the most prestigious newspaper in the French language.
Outside France, much has been made – understandably – of the fact that Mr Niel founded his fortune, while still a teenager, on pre-internet sex lines and peep-shows. "Porn baron buys austerely pompous newspaper" was too good a line to miss.
Mr Niel – pronounced "knee-ell" – is no longer a porn baron. In any case, he made his real fortune by spotting the importance of the internet before anyone else in France. It is also true to say that Le Monde is no longer as pompously austere as it once was (to the dismay of some of its readers).
All the same, the €100m (£82m) takeover, which is to be completed by September, is fascinating. Alongside the former fashion impresario Pierre Bergé and the merchant banker Matthieu Pigasse, Mr Niel has promised to invest in Le Monde as a "public good".
The triumvirate has promised to give the newspaper complete editorial freedom; they have even promised to give the journalists a veto on developments and senior appointments that they dislike.
President Nicolas Sarkozy, who has brushed with Mr Niel in the past, attempted to block the take-over. When he summoned Le Monde's editor in chief, Eric Fottorino, to the Elysée Palace last month, the president referred to Mr Niel as "the peep show man".
He recalled that the billionaire had spent a month in jail in 2004, accused of providing "pimping" services at one of his sex shops (a charge later proved to be baseless). Mr Sarkozy also referred to the fact that Mr Niel had been fined in 2006 after admitting to embezzling €200,000 from the same sex shop.
(This was more of a clumsy oversight than a criminal action, Mr Niel's friends insist. The sum involved was, they say, relatively trivial to a man estimated to be worth €2.4bn.)
Mr Sarkozy's intervention was, predictably, counter-productive. It boosted the subsequent vote by Le Monde's staff in favour of the bid by Mr Niel and his associates to a Third World score of over 90 per cent. The final vote by the newspaper's management board on Monday was much closer, partly because of the president's influence, partly because the radical and maverick Mr Niel is deeply distrusted by a large part of the French political and business establishment.
This may have been the real reason for the President's intervention. Mr Niel has a long history of enmity with the big, traditional communications groups in France with which Mr Sarkozy has many links. The Elysée also feared that a Niel-led consortium would transform the already centre-left Le Monde into a viciously anti-Sarkozy vehicle at the 2012 presidential election.
The fears were almost certainly without foundation. An overtly partisan Le Monde would lose all credibility. Nonetheless, the president is said to have been disturbed that Mr Niel lends financial support to two radical, left-leaning, investigative websites, which have uncovered several embarrassing government secrets in recent years.
At one point Mr Niel was also a board member of the shadowy Reséau Voltaire, a left-libertarian, anti-American group run by Thierry Meyssan, one of the world's most vociferous 9/11 conspiracy theorists. Mr Niel no longer belongs to Mr Meyssan's group but once said that he feels "close to him intellectually".
So who exactly is Xavier Niel? And what does he really want to do with the excellent, if loss-making, Le Monde?
He was born on 25 August 1967 in the dull, industrial suburb of Créteil, just east of Paris. His parents were from the middling, administrative classes with no connections with the political and business elite (which is usually, but not always, a barrier to all advancement in France.) The young Niel did not go to university. He did not need to. He began his entrepreneurial career at the age of 16, developing applications for big media groups of the "Minitel", a dial-up precursor of the internet developed by the French telephone service France Telecom, which was then owned by the state.
At the age of 19, he entered the world of the "Minitel Rose", which brought sex chatter, or contacts, onto the dial-up screens attached to the telephone in almost every French home. The young Niel's service was called 3615 DUCUL (literally "3615 arse").
He rapidly branched out into other, more sobre Minitel services (while also investing in peep shows and sex shops). Crucially, unlike many French businessmen, Mr Niel was not blinded by the success of Minitel to the importance of its infinitely more advanced, global rival, the internet. In 1993, his company, Iliad, started the first French internet access service, WorldNet, which he sold seven years later for €40m.
His greatest innovation, in 2002, was the Freebox, which offered broadband, telephone and cable television packages for €29.99 a month. The established competition was stunned and forced to trail behind. Iliad (trading as Alice or Free) now has 5,000 employees and is worth €3.7bn. Two thirds of the shares are owned by Mr Niel.
Late last year, he brought off another great coup (in the face of opposition from Mr Sarkozy) when he won the contract to create a fourth French mobile telephone service from 2012. He also plans to invest over €1bn in extending his own fibre optic cables into French homes, to rival France Telecom. He predicts that he will cut average French domestic phone bills, fixed and mobile, by half.
Mr Niel and his wife send their two children to a state school. He shares an open-plan office at Free, bombarding colleagues with emails even if they are a few desks away. He is legendarily shy but insists on meeting a different, invited group of 30 Free users – "Freenautes" – every week. Unlike other French self-made billionaires, such as Bernard Arnault (LVMH) or Francois Pinault (Gucci, Printemps), Mr Niel has no political or celebrity friends. He does not go to society dinners. He goes instead, once a week, with his "underground" explorer friends, or "cataphiles", to technically illegal parties in the Paris catacombs.
Jéremie Berrebi, a friend and business associate, says that Mr Niel is the prototype for a new 21st-century kind of business tycoon (new, at least, to France). He is a determined and shrewd business operator but is not interested, per se, in wealth or power. "He is a very likeable man and available to help you, beyond all reason, when you need him," said Mr Berrebi.
At his trial for embezzlement in 2006, defence lawyers representing Mr Niel's business associates in the sex-shop world painted a rather different portrait. They suggested that Mr Niel had cut loose his partners – including a man who had backed him in his early years – to save his own skin. "I would not like to go down a pot-hole with him," one lawyer told the court. "He might cut my rope."
Xavier Niel insists that, despite becoming a billionaire, his desire is to serve the public. His wealth and left-wing opinions are not, therefore, a contradiction, he says. "Making war on monopolies, pissing off [the establishment], is fun," he says.
Mr Niel is a generous contributor to charity. "In life, you need a house and a car. After that, you have a choice," he once said. "You can spend your money on art works and sit down and look at them. Or you can use your money to help people."
An obvious question arises. Is Mr Niel's investment in Le Monde a product of his sharp business mind? Has he spotted that the newspaper's successful website, now partly spun-off to a separate company, is a potential gold mine of French language "content" for his internet and mobile phone empire? Or is his investment in serious journalism – as the consortium's statement suggests – merely a charitable investment in the "public good"?
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