A few weeks ago I noted that The Times is losing a stupendous amount of money. According to little-noticed recent figures, The Times and the Sunday Times lost £46.9m in 2005. As the Sunday Times is assumed to be comfortably profitable, this suggests that The Times itself may have lost more than £60m last year.
Several people have suggested to me that these figures are not to be taken entirely seriously. There may be some imaginative accounting at work. Even so, it is difficult to believe that the losses are entirely confected.
If The Times is unprofitable, it is certainly not the only quality title to be so. It is no secret that The Independent loses a significant amount. The figures for The Guardian are difficult to disinter as its sister paper, The Observer, loses a bucketload, but I would be surprised if, in current advertising conditions, the daily paper was doing much better than breaking even. Factor in their recent £100m investment on new presses, and The Guardian and Observer are losing a great deal of money, though in practice this will be written off by the Scott Trust.
Excepting the Financial Times, which recently declared a tiny profit of £2 million for 2005 after several years of losses, The Daily Telegraph is the only quality newspaper making money; but not as much as its new owners must have hoped. When the Telegraph group was sold in 2004, its bankers predicted profits of £47.9m for 2004. In the event, the figure was £31.5m for that year, down from £35.7m in 2003. This for a group which made nearly £70m in 2000.
What is the Telegraph Group making now? It is a fair bet that the figure is less than it was for 2004. (Figures for 2005 have not yet been filed). If the presence of "house advertisements" is any guide (as many as five large ones on most days last week) The Daily Telegraph is feeling the pinch of the recession in display advertising as keenly as any title. The paper has a relatively heavy dependence on classified advertising, which is suffering even more than display. If it is making £25m a year, such an amount would hardly justify the price of £650m that the Barclay brothers' paid two years ago.
All in all, the financial predicament of the quality titles is not very cheering. Only one out of five is making a half-decent profit, and even that is declining. Fortunately for readers (and employees) there are owners who are prepared to bear the losses.
Newspaper owners and managements cannot, however, accept losses in perpetuity. In view the phenomenal growth of the internet as a rival medium, newspaper advertising is hardly likely to offer any real growth in revenue. What about circulation? Here the original villain of the piece is Rupert Murdoch, who slashed the cover price of the loss-making Times in 1993, subsidising the enormous cost out of other, profitable operations.
It is primarily because of him that quality newspapers are at least a third cheaper than in comparable countries such as Germany and Italy, both of which have several strong quality titles. People say that the newspaper price-war is over, but its effects linger on. No title dares to increase its cover price much for fear that The Times, which remains the cheapest of the so-called qualities, will capitalise. So where do we go? Unless there is a price realignment, we will see more and more of the cost-cutting that has recently been going on at The Daily Telegraph. Not all cost-cutting is bad (I marvelled the other day that one paper had three not-especially-good writers at a Test match) and journalists are wrong to think that it is. In the end, though, it is bound to affect quality. So it is in the interests of both journalists and readers that newspapers should be able to charge more.
There's too much bias on behalf of the boys in blue
Whatever mistakes they may make, the police can always count on the unquestioning support of The Sun and the News of the World.
On 4 June, the day after the botched raid on a house in Forest Gate, London, The Sun was certain that "a chemical bomb held by Islamic terrorists is primed to go off". Senior officers were quoted prophesying an "imminent" attack. The piece strongly implied that the chemicals were associated with the raid on the house and the arrest of the two Kalam brothers, though it conceded that "initial searches had failed to find the device".
Next day, the News of the World confided to its readers that "the cops were confronted by the brothers, who were trying to run down the steps, and a scuffle broke out. This is understood to have climaxed with 20-year old Abdul Koyair making a grab for a police firearm, which already had its safety alarm off."
On 6 June, the police were telling The Sun a different story. The gun might have gone off because a policeman with thick gloves had inadvertently pressed the trigger. But the next day, just in case we were tempted to believe that the brothers were innocent victims, the paper informed us that "the elder brother of two suspected terrorists seized in a 'poison bomb' raid took part in a hate-filled anti-West demo."
Even after the brothers' disturbing press conference, The Sun was ready with another accusation, supplied by the boys in blue: Adbul Kahar and Abdul Koyair had £38,000 in cash at their home.
As in the case of the murdered Brazilian, Jean Charles de Menezes, the police have shown a disquieting tendency to change their story as events unfold. Might it be a good idea if next time The Sun and the News of the World waited a little longer before uncritically repeating the police's line?