Stephen Glover On The Press

Piers Morgan should be brought to task over the City Slickers case
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The Independent Online

None of us should feel much pity for either of them. They have brought disgrace on their trade. But it seems incredible that Piers Morgan, their editor at the time (the offences were committed between August 1999 and February 2000), should have escaped scot-free. At the very least he appears to have failed in his duty as an editor and employer in not controlling these wild young men. He has previously claimed he told Mr Hipwell that it was unacceptable to buy shares the Slickers were tipping, but no warning was ever put in writing by him. It is difficult to disagree with a statement in a plea document filed with the court by Mr Bhoyrul's lawyers that their client "was deprived of the moral leadership which would have prevented these events."

Mr Morgan, though, was guilty of more than failing in his duty of care. He himself bought shares in a company called Viglen, which was tipped by the City Slickers. He later said that he had purchased them not knowing that they were to be recommended the following day. Some may find this claim very difficult to accept. However, his employers at Trinity Mirror - notably the company's chairman, Sir Victor Blank - chose to go along with Mr Morgan's version of events, and no action was taken against him. The Press Complaints Commission (PCC), while censoring Mr Morgan, was not so critical that Trinity Mirror felt obliged to get rid of him.

It is possible that, following the trial of Mr Hipwell, the Department of Trade will wish to re-open its file on Mr Morgan. It emerged that, unbeknownst to the PCC when it wrote its report, Mr Morgan spent more than the £20,000 that had been mentioned when he bought shares in Viglen. He had also used funds in a PEP on the same day to invest a further £35,000 in Viglen, while his wife acquired £20,000 of shares. Overall the Morgans had a holding of £67,000, not £20,000 as had been stated. The court also heard evidence from Nigel Hewer, press advisor to Sir Alan Sugar (who ran and part-owned Viglen), that Mr Morgan had asked him to lie about the timing of a critical telephone call between himself and Mr Bhoyrul on the day the Viglen story was being prepared. Mr Hewer said that he had been persuaded to say that the call had taken place "late in the afternoon."

Some people may say that these new disclosures hardly matter now that Mr Morgan is no longer editor of the Daily Mirror. But with Mr Hipwell and Mr Bhoyrul having been made to walk the plank, it would not be fair if Mr Morgan were allowed to ignore new allegations against him. Moreover, he remains an important figure in public life, having recently bought Press Gazette, the journalists' trade magazine, with Matthew Freud, the PR man, as his senior partner.

Mr Freud is, in his own way, almost as controversial a character as Mr Morgan, partly because of his lucrative PR dealings with the tabloid press, and partly because he is married to Elisabeth, daughter of Rupert Murdoch. The most recent accounts of BSkyB, which is controlled by Mr Murdoch, record that it paid Mr Freud's company £1 million in the previous year, while Elisabeth Murdoch's TV production company received £4 million. This hardly makes Mr Freud, as the larger shareholder in Press Gazette, a disinterested party so far as Mr Murdoch's newspaper titles are concerned.

As I mentioned a couple of weeks ago, Press Gazette has become much livelier since Messrs Freud and Morgan bought it in June. Whether they can keep up the extra expenditure on what is only a small circulation magazine may be doubted. A more serious issue for me is their fitness as proprietors. Tellingly, the current issue of the magazine gives scant coverage to the outcome of the City Slickers trial, and does not suggest that Mr Morgan may have new questions to answer. Meanwhile, there are two or three newspapers which still have to decide whether they want to take part in next March's press awards which are organized by Press Gazette, with this year's event having been more drunken and rowdy than usual.

As things stand, Mr Freud and Mr Morgan certainly do not convince me that they are appropriate owners of Press Gazette, and I can't see why sensible newspapers would wish to associate themselves with an awards ceremony overseen by two such men.

Numbers game still doesn't make the Berliner a winner

A great personage on The Guardian wrote to me last week following my piece about the newspaper's comparatively modest circulation increase since it adopted the Berliner format. He did not challenge my suggestion that it had only put on between 30,000 and 35,000 copies a day since its relaunch three months ago, but he thought that my piece and its headline had been rather unfair.

On the headline, he may have been right. It suggested that The Guardian has acquired 30,000 new readers, whereas it has of course attracted 30,000 new buyers, therefore possibly three times as many new readers.

In particular, my correspondent reminded me that, alone among the so-called qualities, The Guardian can now offer colour advertising on every page. The Daily Telegraph is spending between £100m and £150m on new colour presses and does not predicate any circulation increases. His point was that I had questioned the £80m-plus cost of the new Berliner presses on circulation grounds alone, without considering the extra revenue that will accrue from all-colour display advertising.

This is true. There is clearly an advertising bonus for The Guardian in having new colour presses, but if that were the only advantage, the paper's management could scarcely justify spending more than £100m (including some marketing costs). The Telegraph Group may be spending a similar amount to achieve all-colour advertising, but it has a much higher circulation, and therefore many more papers to print. If The Guardian had simply wanted all-colour advertising, it would not have had to spend more than £100m.

The truth is that the switch to a Berliner format was largely explained by the newspaper's management in editorial terms. It might reasonably be argued that the twin bonus of a modest increase in circulation growth and extra advertising revenue justifies the expenditure on the new Berliner presses. But if the rise in sales were to dwindle over the coming months, as certainly seems possible, it would become much more difficult to defend the acquisition of costly new presses.

My strong suspicion is that there is some soul-searching at The Guardian. In fact, there is actual proof of this. Last week, Sir Bob Phillis, chief executive of Guardian Media Group, was quoted as saying in a newspaper interview: "If you look purely at a rational business decision, you might not have made the move to Berliner quite as soon as we did." Coming from a chief executive, this is an unusually candid admission. At the very least, he appears to be saying that the switch in format has not been a runaway success.

Were The Guardian part of a publicly-quoted company, I imagine that the shareholders might have a few questions to ask Sir Bob, and that his job might even be at risk. Fortunately for him, he has to answer only to the Scott Trust.

scmgox@aol.com

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