The Media Column: 'Desmond will find that there's no alternative to editorial investment'

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The Independent Online

The irrepressible Richard Desmond, proprietor of the Express group, is wearing a smile as broad as the range of top-shelf magazines on which his empire is built. Company accounts record a 25 per cent increase in operating profits. Annual circulation figures are up at the Daily Express (2.5 per cent) and the Daily Star (9.78 per cent). Desmond has rewarded himself with a £12m salary increase, boosting his personal remuneration to £21m (£629,000 basic, plus a bonus of £20,354,000). His newspapers have even bucked the gravitational pull of war that has done so much to dent the sales of rivals. It seems that the man whom polite society deems unsuitable to control anything more influential than titillation for the sad, actually knows his onions.

The irrepressible Richard Desmond, proprietor of the Express group, is wearing a smile as broad as the range of top-shelf magazines on which his empire is built. Company accounts record a 25 per cent increase in operating profits. Annual circulation figures are up at the Daily Express (2.5 per cent) and the Daily Star (9.78 per cent). Desmond has rewarded himself with a £12m salary increase, boosting his personal remuneration to £21m (£629,000 basic, plus a bonus of £20,354,000). His newspapers have even bucked the gravitational pull of war that has done so much to dent the sales of rivals. It seems that the man whom polite society deems unsuitable to control anything more influential than titillation for the sad, actually knows his onions.

Does he really? The core facts are indisputable. Express group profits have not been generated by porn and pap alone. Granted, Desmond's adult entertainment channel Fantasy TV did return a £3m increase in profitability (up from £14m to £17m). Celebrity titles such as OK! brought in an additional £2m. But the pornographic titles, which he would like to sell to boost his claim to be a serious media magnate, experienced no advance in profitability. The biggest single contribution to Richard Desmond's enhanced wealth came from the newspaper division, made up of daily and Sunday editions of the Express and Daily Star. It poured in £33m of profits, £7m more than in the previous year.

In February, during a rare speech to the Jewish educational charity World ORT, Desmond declared, "I'm not a man to accept second place." If wealth generation is the primary objective of newspaper publishing, then he is entitled to believe that he is on the way to achieving his ambition. But in the same speech Desmond made it clear that profit is not his only motive. He revealed that, on the day he took possession of the Express titles, Downing Street called to invite him in for a chat. Richard Desmond said that he was not interested in politics. According to his account, Tony Blair replied, "You will be," and Desmond concluded that, on reflection, he is "interested in things being well run as opposed to badly run".

On that criterion, his new profits offer few grounds for celebration. In the long term, newspapers thrive through good times and bad only if they receive substantial editorial investment. Desmond's arch-rivals, Associated Newspapers, have proved the efficacy of that approach over decades, not over one set of annual accounts. Establishing a firm niche in the market is not something that can be achieved overnight. It requires consistent editorial excellence and matching certainty about identity and role.

Richard Desmond is light years away from achieving that. His newspaper profits are not the product of marginally increased sales. Nor has he earned market-defying receipts from advertising. His approach has been more that of a classic corporate raider. Desmond has stripped £40m worth of costs at his newspapers by sacking staff and ruthlessly controlling even trivial spending. The Express newsroom is a desert compared to those of his principle rivals. He has spent heavily on promotion, but the question for 2003/2004 will be whether core editorial content is good enough to maintain sales when one-off savings from redundancies and other cost-cutting measures have been exhausted.

I doubt it. Newspaper history is full of examples of temporary circulation boosts built on aggressive promotion and pricing. Desmond has used both, but he has not built newspapers that stand scrutiny from an editorial perspective. Perusal of last week's run of the Daily Express illustrates the point.

The naked nastiness of headlines such as "Britain facing asylum anarchy" (Thursday 8 May, left) over a story that almost gloated over warnings of "an upsurge of racial violence"; and the crude populism of "Police: give us guns now" (Saturday 10 May) was poor cover for depleted features, trite commentary and an obsession with celebrity that does not even attempt to identify lateral themes or elements of significance.

It is not just The Sun that does these things better. The Daily Mail does them infinitely better, as do broadsheet titles, to which many Express readers have conventionally regarded their newspaper as a legitimate alternative. Richard Desmond's experience of bottom-feeding might spell long-term success for the Daily and Sunday Star. But with their editorial budgets pared to the bone, the Express titles may soon look very vulnerable indeed. The trouble with one-off savings is that they are one-off. No matter how hard a proprietor promotes, there is no enduring alternative to editorial investment.

timlckhrst@aol.com

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