To be king of the fourth estate

Mathew Horsman and David Hellier on the men who would be Murdoch
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The Independent Online
Who would want to buy a national newspaper these days? Newsprint prices have gone through the roof, a price war has slashed profits, and overall readership is stagnating, despite gains by Rupert Murdoch's (cut- rate) titles.

One should never underestimate the appeal of being a press baron, however. Outsized egos grow addicted to the influence they think they wield - and running a national title is one of the surest ways, on past form, to win that elusive knighthood.

Not that all the men profiled here need or want one. Sir Andrew Lloyd Webber has his already for services to the British theatre. Mohamed al- Fayed has probably resigned himself to doing without: he is not popular with this government, nor does he have many supporters among Labour.

But ego alone does not tell the whole story. There are, indeed, two huge commercial advantages to owning newspapers: the cash they generate (useful to expand into other media farther down the road) and the powerful libraries of copyright material they create daily. The cash from News International's five national titles helped Murdoch to finance his huge global empire, for example. And both the Telegraph and the Times have shown how their material can be repackaged for electronic resale - on the Internet, for instance.

When all is said and done it must be the idea more than the commercial aspect that appeals. Newspaper proprietors get to bestride editorial offices, hiring and firing editors at will. They sup with prime ministers and with royalty. A sunset industry it might be, but many a happy ending has been marked by a ride into the hills, the sun setting majestically beyond.

TONY O'REILLY

Tony O'Reilly is already a press baron if you look at the holdings of Independent Newspapers, his main media vehicle. He dominates the Irish press and has recently expanded in New Zealand and South Africa. Altogether, the group owns or manages pounds 1bn-worth of newspaper titles.

More to the point, the man known as the Bean King for his control of Heinz, the US-based food company, has managed to buy part of a national newspaper in Britain, the Independent, following a no-holds-barred fight between the Mirror Group and his Irish Independent Newspapers. But close colleagues believe he is still keen to own a UK national paper over which he could exercise direct control. Before joining the battle for the Independent, he took a hard look at the Express (thought to have been for sale for years, if the price was right). He did not like the per-copy production costs, which he calculated to have been roughly twice what the Mirror Group managed.

One rumour has it that Dr O'Reilly could be enticed into bidding for the Express group if he thought he could use a few of the Mirror's cost- cutting tactics. Working alongside the Mirror at Newspaper Publishing, publishers of the Independent and the Independent on Sunday, he has had a close look at how costs can be slashed.

But a partnership is not out of the question, provided he emerged as the senior player. Sir Andrew could be one; so could the Mirror Group. Newspaper Publishing has even been suggested by some industry observers as the perfect acquisition vehicle for taking over the Express. It has plenty of tax losses to line up against the Express group's declining but still reasonably robust profits.

ANDREW LLOYD WEBBER

Sir Andrew Lloyd Webber has money, ambition and talent. So why does he want to buy a national newspaper?

The answer: probably a mixture of strategy and ego. Sir Andrew, who last week confirmed an interest in the Express group, wants to create an integrated media company anchored by the cash flow from Cats, Phantom of the Opera, Sunset Boulevard etc. So much for the strategy. But he is also attracted by the influence attending any national newspaper proprietor, following in the footsteps of Beaverbrook, Black, Murdoch and many others lesser and greater.

Sir Andrew's Really Useful Company, owned 30 per cent by the music and entertainment group PolyGram, generates pounds 110m a year in revenues, and profits of nearly half that amount. Intriguingly, there are signs that PolyGram would countenance a lower dividend in future to provide the company with more funds to invest.

Sir Andrew has said he would be willing to put up pounds 100m toward the pounds 300m price tag that the Express group's Lord Stevens is likely to demand. With a few partners - perhaps Tony O'Reilly - the titles could be his.

So far, Sir Andrew's diversification has been ownership of theatres (three in London, one each in Switzerland and Germany). His company also promises seven film productions in the next five years. To date only one project, an animated version of Cats, has gone beyond the planning stage.

Not everyone believes Sir Andrew is serious. It is known, however, that he lunched recently with Dr O'Reilly.

MOHAMED AL-FAYED

Mohamed al-Fayed, the controversial owner of Harrods, is determined to own a piece of the UK media sector. His advisers are scouring opportunities in newspapers, television and multimedia.

Following the failure to buy Today earlier this year, the national mid- market tabloid published by News International, Mr al-Fayed and his key media adviser, Alan Frame, former executive editor of the Daily Express, have extended their search - most recently unsuccessfully angling to buy London News Radio, now part of the Reuters stable. But the newspaper market remains the prime target, though Mr al-Fayed and Mr Frame are believed to be concerned about the lack of quality titles for sale.

The attractions of the Express Newspaper Group, long rumoured to be for sale, are discounted by Mr al-Fayed and Mr Frame. The two apparently believe the investment required to revive the ailing titles would make such a purchase unattractive.

Insiders deny Mr al-Fayed is seeking a platform for "crusading" journalism. Plans for Today would have seen a "radical but reasoned" newspaper in the mould of USA Today, a tabloid characterised by extensive use of graphics, plenty of sports coverage and "factoids". The al-Fayed camp still believes "political interference" scuppered the Today deal, a charge made again when the London News Radio talks broke down.

BARCLAY BROTHERS

As two of the most reclusive businessmen in Britain, David and Frederick Barclay make most unlikely newspaper owners. They surprised the UK media industry when they rescued the European newspaper from receivership nearly four years ago and, more recently, surprised it again by declaring their interest in the Scotsman titles, which they are in the process of buying.

When the pair clinch a deal - as they did last month when they bought the Ritz hotel from Trafalgar House group for pounds 70m - there is none of the fanfare usually associated with a large City transaction. No press conference, no press lunch, not even a statement from the brothers' London offices of Ellerman Investments, whose main business is shipping and property. Instead, a friend of the Barclays told the Independent that buying the Ritz had been a 30-year ambition. He said they felt that as their businesses were privately owned, they had no need for publicity, or to explain deals to outside shareholders. But their secretiveness has raised suspicions among some journalists, who feel the brothers may have something to hide.

The pair are not slow to go to their lawyers when the press comes knocking. A recent BBC television programme by John Sweeney, and his accompanying article in the Observer, brought complaints, and BBC sources say the two tried to stop the programme. They showed their own media-buying ambitions when they appointed Bert Hardy, former managing director of Associated Newsapers, to the European payroll. Mr Hardy was in charge of negotiating the Scotsman deal. The brothers are not bidding for the Express, but no doubt they harbour more media ambitions.

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