Rivals joke that the internet has rendered it pretty, pink and pointless. It sold just 92,599 full-price copies a day in Britain and Ireland last month. But staff at the Financial Times should have slight grounds for optimism this week.
As its owner, Pearson, prepares to release half-yearly trading results tomorrow, City expectations are high. The FT crawled back into the black in February for the first time since 2002 with a modest £2m pre-tax profit. Analysts believe the momentum has been sustained since then.
But instead of celebrating at the paper's south London HQ, many staff are downcast after a demand from the new editor, Lionel Barber, for 51 newsroom redundancies. Volunteers are being sought, but in an email to staff, Mr Barber said compulsory redundancies would be imposed if enough do not step forward.
This has plunged the FT back into a mood of crisis, which began last November when Barber's predecessor, Andrew Gowers, was ousted. Gowers had presided over four years of declining circulation and losses that saw operating margins tumble from 27 per cent in 2000, the year before he took over, to 1 per cent last year.
Pearson's corporate machinations have not calmed nerves. In May, its chief executive, Dame Marjorie Scardino, underlined the urgent need for change by appointing the group chief financial officer, Rona Fairhead, to run the Financial Times Group. Her big test will be to meet the demand of the chairman, Glen Moreno, that the newspaper return to "serious profitability".
So far, the 44-year-old mother of three has kept a low profile. But she has a reputation for having a cool head in a crisis.
Some media analysts doubt whether achieving big profits is possible. The FT's daily sales have declined from a peak of 500,000 in 2002 to 440,000 this year. It lost £32m in 2003 and £9m in 2004 before returning to the black in 2005. Circulation within Britain has plummeted. Ten years ago, the UK and Ireland edition accounted for two-thirds of the FT's total sales. Now that is down to a third.
In a rapidly changing financial world, journalists imbued with the FT's "square mile" mindset are accused of focusing on profits and accounts rather than breaking news. They struggled to cover huge financial scandals such as Enron. Dame Marjorie admitted this in 2002, confessing that "the business press - and I include the FT in this - has not worked hard enough to ferret out these stories. We could have done a lot more digging."
And while the FT failed to dig up these stories for a new readership, expanded business sections in quality newspapers - many run by former FT staffers - have eroded its existing market. "The FT imagines that it is still the bible for City professionals," says one executive, "but it is hard to sustain that role when all the other titles have hired prophets of their own."
Another says: "The advertising slogan used to be 'No FT, No comment'. Now it might as well be 'No FT, No problem'."
"The FT's readership is changing faster than the newspaper," says Murray Chick, the chief executive of Brand Aid. "Traditional use of the paper has been overtaken by electronic media and, at the same time, the new business elite is different from the one that existed in 1986 or 1996. They work in smaller firms. They are much less formal and much less tied to big organisations. The FT has to find a new market. I'm not quite sure they know what that market is."
Pearson executives insist they do know. The company's ambition is to turn the FT into an international brand, so replicating the success of The Economist, in which it has a 50 per cent stake: the weekly news magazine sells more than a million copies worldwide but only 150,000 in Britain.
This is why Lionel Barber was appointed editor. His experience includes stints in Washington and Brussels. Pearson expects him to build the sale of FT editions in America, Asia and Europe. It explains the redundancies, too. "In the past 10 years we have launched new overseas editions and FT.Com," says an FT spokesman. "You can only keep bolting things on for so long. We have to remove duplication and modernise procedures."
That means uniting the newspaper and website news desks and creating a production system that integrates print and online publishing. "Our plans will help us to create an editorial organisation fully equipped to meet the challenges of the digital age," says Barber. "We will shape the news operation into one of the most advanced multi-media newsrooms in the world."
Recent figures suggest it might be working. July ABC's saw FT sales up by 3.43 per cent, year on year, to 440,958 copies. Eighty-thousand paying subscribers have signed up to FT.Com since 2002. At its annual meeting in April, Pearson said advertising revenue increased by 13 per cent in the first months of this year. "Half our advertising is booked to run worldwide," says a spokesman. "Advertising accounts for 75 per cent of FT revenue. If we were solely dependent on the UK, life might have been difficult in recent years. But our strategy is global. The FT unites an audience of senior business leaders around the world."
Lawson Muncaster, the chief executive of the upstart London financial freesheet City AM, is sceptical. "News transcends national barriers, but it is still interpreted on a local basis. A deal that looks good in London does not always get the same reception in Hong Kong. It is dangerous to assume that a London-centric view resonates globally. Any newspaper that tries to satisfy everyone becomes sterile."
The performance of America's financial newspaper, The Wall Street Journal, offers an intriguing parallel. The WSJ sells 1.8 million copies a day in the US. Since launching in Europe in 1983, its reputation for incisive financial investigation has won admirers - but its readership lags far behind the European circulation of the FT.
Despite relaunching as a compact newspaper in October 2005, the WSJ Europe struggles to appeal both to Americans abroad and native Europeans. "There is news we are all interested in," says analyst Paul Gooden of ABN Amro, "but most corporate news is European or national."
If Lionel Barber is to survive longer than his predecessor, the FT's reputation for authority and accuracy must transcend such parochialism. Gooden would not bet against success. "Advertising revenue and circulation are both headed in the right direction and the FT is expected to make a big contribution to Pearson's profits."
The fear among FT journalists is that their title is being slimmed down in preparation for sale. It has many potential buyers, including Rupert Murdoch, who has hinted that it could become a stablemate for The Times. Pearson shareholders have long criticised the logic of a group that is the world's largest educational publisher, the owner of Penguin books and the publisher of the FT. One shareholder, Axa Investment Management, warned earlier this year that the FT "takes up a lot of management time relative to its value to the group," and urged Pearson to consider selling.
Gooden predicts this won't happen. "It is not the right time to consider selling it." An FT spokesman was even firmer. "Are we restructuring to cut costs for a sale? Categorically not." But so far, too few volunteers have come forward to avoid those compulsory redundancies.
It has been a rollercoaster year for the FT's British rivals. The Barclay brothers brought their loss making Sunday newspaper, the Business, to an end this month. Founded in 1996 to fill the gap between the FT's Saturday and Monday editions, it won City respect under the editorship of Jeff Randall but never became profitable. It has recently been accumulating losses at the rate of £3m a year. The last newspaper edition will be published on 1 October, after which The Business will reappear as a weekly magazine, published on Thursdays and designed to compete with Forbes, Fortune and BusinessWeek. It is likely to run to 72 pages and be priced at £2.25. Publisher Press Holdings aims for an initial circulation of 50,000.
At the other end of the spectrum, executives at the free London title City AM claim they will be able to distribute 100,000 copies a day by the end of the year and hope to surpass the full-price circulation of the FT. City AM was launched in September 2005 by former Metro International executives Jens Torpe and Lawson Muncaster. Its audited distribution, in May 2006, was 82,549 copies. Recent online research found that its average reader is 36 years old and earns £77,000.
The Wall Street Journal Europe
The US financial giant launched in Europe in 1983 and converted to a compact format last October in a bid to increase its appeal to European readers. It remains a niche product in the European market and is outsold by the FT.
The Daily Mail has been particularly sharp to the Education Secretary, Alan Johnson, for loose comments he made about family values. After a minor slip such as "The modern family is not always a married family" and his suggestion that marriage is "not for everyone", Johnson finds himself under the sort of barrage last seen at the Battle of Jutland. What can have inspired this? Could it be that Mail editor Paul Dacre is doing some useful work for his friend Gordon Brown, who sees Johnson as perhaps the only real threat to his securing the leadership of the Labour Party?
A fine winer
Adam Boulton, the portly political editor of Sky News, once said of politicians: "I do to a certain extent separate myself from them. I am not a great winer and diner." So how wonderful to see the bar bill after his wedding to the PM's former gatekeeper, Anji Hunter, last weekend. £35,000 was spent on the champagne reception to quench the thirst of his guests. One shudders to think what constitutes being "a great winer and diner" in Boulton's book.
Late lunch lament
Disaster for Kensington Place. Now that the Evening Standard has changed its deadlines so journalists won't be free for lunch until 2pm, their local eaterie may find a few empty tables. "It's the end of an era," says one rotund Standardite. But it will keep the expenses claims down.
Some don't like it hot
Over at Westminster, lobby hacks are already feeling fairly miffed at having their offices in the Press Gallery requisitioned by the powers-that-be while the Commons roof is being fixed. But in the long, dry summer, there have also been complaints about sweltering temperatures and lack of refreshments. After 5pm - canteen closing time at recess - all that's available is a slow dripping tap, which draws long queues of sweaty hacks. "It makes travelling on the Tube in this weather seem like luxury," says one.
Moggy seeks new home
The fun is over at The Spectator. Humble toilers in the magazine's Doughty Street home have clicked that when they finally move to their plush new St James's Park offices in February, their dreaded chief executive Andrew Neil really will have his beady eye on them. "I've heard he is going to have a desk in our offices," says one fearful soul. "At the moment, we have a ping-pong table in the back garden and an office cat. I can't see that lasting with Andrew about."
The BBC has hardly had an easy ride from this government. But it will have shuddered this week as John McDonnell, backbench challenger for Tony Blair's crown, laid down an Early Day Motion condemning the BBC's plan to take ads on its international websites. McDonnell complains "that the use of adverts threatens to fundamentally undermine public service broadcasting... and will damage the BBC's reputation as an impartial news provider." Now we know where he stands, it just remains for Brown to declare his hand.Reuse content