Viscount Rothermere: The Lord of Middle England
In his first-ever interview, Jonathan Harmsworth, chairman of the Daily Mail and General Trust, talks to Raymond Snoddy about Desmond, Dacre, and deal-making. And why the Tories can't take his support for granted
Monday 27 September 2004
The building may be new, but the office of the chairman exudes continuity. His heavy brass-bound desk is the desk of Lord Northcliffe, who founded the Daily Mail more than a century ago, and a portrait of Northcliffe, who eventually went mad, looks down on proceedings.
As the fourth Viscount Rothermere launches into the first extensive interview he has ever given, the only sound is the ticking of an ancient clock. It was six years ago this month that Jonathan Harmsworth was catapulted into the chairmanship of the Daily Mail and General Trust (DMGT), after the sudden death of his father. Before he had turned 30, Lord Rothermere had become one of the richest men in Britain, worth an estimated £800m; the youngest chairman of a FTSE 100 company; and the custodian of the Daily Mail, one of the most distinctive media institutions in the UK, loved and hated in equal measure.
"It was incredibly difficult. I feel I have grown into it, and get more confident as I go along, but it was tough," Rothermere says. Like his father, he is a tall man with a quiet voice and an easy laugh. The only time he appears ill at ease is when he has to pose for the photographs. "I am getting better, but I wouldn't say I've got the hang of it," the DMGT chairman admits, before laughing uproariously.
What he certainly has got is a strong sense of what the Daily Mail is for and who its core audience is, and therefore where it should stand in the political spectrum. In words that are almost an echo of his father, Rothermere says that the Daily Mail supports the middle class of the country. "It supports what is right for its readership and for the people of Middle Britain. That's its core, and that's what it believes in. Those middle-class values are the values of the Daily Mail."
Those values, notes Rothermere (a family man with four children), include the belief that the heart of any decent society is the family unit and that it is better for children to be brought up by a man and a woman.
Politically, although the Mail has always been a Conservative newspaper - usually stridently so - it is clear that those values could transcend traditional party loyalties. If the values of Middle England changed, the Daily Mail would follow the market and would have to change with them.
"The Conservatives do not have a God-given right to expect the loyalty of the Daily Mail. The Daily Mail supports the middle class of this country, and if the middle class of this country is better supported by another political party, and feels that way, then I am sure that Paul [Dacre, the editor-in-chief] would make the corresponding decision," he says.
As if to underline the complexity of matters, Rothermere expresses his admiration for Tony and Cherie Blair. "I enjoy the company of Tony and Cherie and respect them tremendously as individuals for what they have accomplished with their lives. They are remarkable people, as are other members of the Government." He also admires the Blairs' "professionalism" because they do not allow the Mail's consistent attacks on them to affect "our personal relationship".
"My views are not necessarily the views of the newspaper, and we have a relationship outside it. Do I think they are overjoyed [by the attacks]? No, I don't. But I think they realise that I don't edit the newspaper and that I allow Paul to do that, and they respect the decision I have made," Rothermere explains.
He also admires the Conservative leader Michael Howard - "a very considerable politician" - but the Mail owner does not rate his performance as leader particularly highly. "I don't think he is doing as good a job as many people hoped he would at this stage, but I think there is a long time to run and he may come through," Rothermere says. He adds that it would be a good thing for the country to have an effective opposition. "I think he [Howard] has to work on his communication skills with the public."
Despite holding such forthright views, Rothermere insists that he has never become involved in setting the political agenda of his papers, or in trying to second-guess Paul Dacre.
Some proprietors, such as Rupert Murdoch, the chairman of News Corporation, ring their editors on an almost daily basis. Richard Desmond of the Daily Express always wants to know what the front-page splash is going to be, and Lord Black, the former owner of The Daily Telegraph, would exercise pressure by writing dissenting missives to the letters columns of the newspaper.
Rothermere, who worked as a sub-editor and reporter on the Sunday Mail in Scotland (a page-three lead was his best effort) in preparation for his "destiny", does none of these things. "I have chosen to follow the business path and that doesn't give me a right, because I control the shares, to second-guess my editors. I have to have faith in their ability to make the right decisions. I don't believe I have ever intervened. I don't think there is any evidence at all on it," says Rothermere, who dresses in sombre business suits and restrained ties.
Of course, there are always limits. If Dacre suddenly decided to start supporting Arthur Scargill - an unlikely thought - his boss says it would be time to have the editor of the Daily Mail committed.
Rothermere pays tribute to Dacre as a "brilliant" editor and speaks of the "brilliant" relationship he has with his leading editorial influence. But he is the first to admit that the relationship is neither the same, nor as close, as that between Dacre's predecessor, Sir David English, and his father. Sir David died a few weeks before his proprietor in what was a double blow for the organisation.
"It was a unique relationship, in any sense of the word. They were like twins, basically very close brothers talking twice or three times a day and seeing each other socially. They died close to each other, and I don't think that was necessarily by coincidence. I don't have a relationship like that with anybody, unfortunately. I wish I did, but I don't," Rothermere says.
What he says he does have is a great working relationship with Dacre, and the two men meet and talk at least once a week. "Paul comes to see me whenever he needs to talk to me. There is no set time. I certainly don't talk to Paul as much as my father talked to David English. I think Paul would find that intrusive."
There is no doubt that the DMGT chairman is respectful of the boundary between his role and that of his editor. He refuses to discuss, for instance, exactly where his views differ from those of the Daily Mail, although there is a suspicion that they might be more liberal than some of his paper's opinions. To discuss his views, he believes, would be to bring unnecessary tension and pressure to his relationship with the editor, creating the sense of the owner always looking over the editor's shoulder.
Does he think Dacre would pay much attention if he were to spell out his views? "No, I don't. But I would just think it would be unfair to put my views into the public arena, so he might feel uncomfortable about it."
What is certainly clear is that Rothermere remains very grateful for the level of support he received in the weeks after his father's death from Dacre and the DMGT chief executive Charles Sinclair - and indeed from his wife Claudia, who by all accounts is a formidable business influence.
He's particularly grateful to his editor-in-chief. "I don't know what I would have done without Paul, frankly," he admits. "Suddenly his chairman dies and this kid, this 29-year-old, inherits the business. Rather than get in a tizz and throw his toys out the pram, he actually sits down and talks me through it and listens to what we have got to say, and we reach an arrangement. That says an awful lot for him."
Now, as he surveys the media scene with his more experienced eye, the 35-year-old DMGT chairman is: disappointed that he lost the battle for The Daily Telegraph to the Barclay brothers; determined to expand in radio; surprisingly complimentary about his pugnacious rival Richard Desmond; and confident that the circulation decline at the London Evening Standard can be reversed.
When The Daily Telegraph came on the market, Rothermere and his team decided from the outset that they would have to go for it - even though they knew that the Barclays, as private businessmen, could bid more than a publicly quoted company. "There was a line we felt we should not cross, and we crossed it and would not go any further," says Rothermere, who doesn't say where his line was drawn. The Barclays paid £665m for the business, and the DMGT line is unlikely to have been more than £650m.
The DMGT chairman says he noted with amusement stories in The Times, probably inspired by Murdoch, that DMGT was the highest bidder and was about to win the prize. If the intention was to spook DMGT shareholders with the spectre of the company about to make too high a bid, there was no noticeable effect.
"I think they [News Corp] were terrified of us owning the Telegraph. They have a unique position in the UK media, and a unique political leverage, and they were worried that we would be a countervailing force to that leverage, and that scared them. The story in no way affected our decision. We had already decided what our top price would be before that story came out," Rothermere insists.
He says DMGT would not have changed the format of The Daily Telegraph. "I would not have turned it tabloid. It was the wrong thing for the Telegraph in its market. The Telegraph is not the Daily Mail," he says. "If the Barclays turn the Telegraph tabloid and come at the Daily Mail, then they would have paid a very large premium for the country's third-largest middle-market newspaper."
Since the Telegraph sale, Murdoch MacLennan, the managing director of Associated Newspapers - who drew up DMGT's business plan for the Telegraph - has been hired by the Barclays. Within 48 hours, he was replaced by Kevin Beatty, an internal promotion that demonstrates the strength in depth at Associated.
Rothermere's position on Desmond - who regularly uses the columns of the Daily Express to attack the Mail and all its works - is more surprising. He regards him as a formidable competitor who is doing a good job. "I think Richard Desmond is a very clever man. I don't believe he ever does anything emotionally. I think there is always a reason for him doing it. His attacks on us and the Daily Mail are purely in order to garner support from among our many enemies," says Rothermere, whose papers have nonetheless done extensive digging on the business background of Desmond.
If there ever was a truce on personal attacks between the two sides, there certainly isn't one now. In fact, the Daily Mail chairman suggests that under a stringent application of the public-interest test that excluded the pornography publisher David Sullivan from owning the Bristol Evening Post, Desmond's ownership of the Express titles might have been blocked. "He would not have been allowed to own it because it was inconsistent with the decision on the Bristol Evening Post."
The Mail owner believes that the Government took a "more relaxed view" of the ownership issue, and that Desmond's donation to the Labour Party and his initial support for New Labour had played a part. "I'm sure that was a factor. I wonder if they feel good about it now that he's switched to the Tories," Rothermere says with a smile.
He also claims to be completely sanguine about Desmond's plans to launch a free daily in London to try to divert some of the all-important classified advertising from the Evening Standard. "I think it's a great idea. I think he should go ahead and do it, because I think the more competition in the market the better," says Rothermere, whose father disinterred the London Evening News as a successful "spoiler" designed to sink Robert Maxwell's London Daily News.
Could the same thing happen again? "We are making our own plans for London regardless of whether he [Desmond] does it or not. They're secret, but we certainly aim to expand our existing business in London." Rothermere blames the sharp fall in the circulation of the Standard on such external factors as the introduction of the road congestion charge to central London, and insists that he is "extremely happy" with the job that his editor Veronica Wadley is doing.
Casting his eye over the top end of the national newspaper market, Rothermere says that he likes The Times at the moment, but thinks that The Guardian is facing problems because of the considerable delay in moving to a new medium-sized format. "The question I would be asking if I was The Guardian now is: how many copies am I losing to The Independent, and is that going to continue or will it plateau, and can I afford to wait until the new Berliner size comes on," Rothermere says.
DMGT's London expansion will almost certainly include an increased presence in radio. The group owns just under 30 per cent of GWR, the radio group that owns Classic FM. It will end up with a 15 per cent stake of the enlarged radio group following the expected merger of GWR and Capital.
Although the Daily Mail holds a special place in the affections of Rothermere and his family, and the medium of newspapers (including nearly 100 local and regional titles in Northcliffe Newspapers) remains core, the emphasis in recent years has been on creating a more broadly based media business. Apart from newspapers (including the involvement in the Metro free daily, which now distributes around a million copies a day), the group's interests range from radio, exhibitions and teletext to professional information and training and new internet businesses.
Earlier this month, DMGT reported "a good trading performance" for the full year, with improved contributions from its newer businesses and organic growth from all divisions. Revenues for the year could top £2bn.
Rothermere believes that the strength of the company flows from the fact that it is a family business which is able to take a long-term view of its investments. The continuity is protected by a share structure that gives the family 88 per cent of the voting shares, compared to about 27 per cent of non-voting shares.
He believes there will be little pressure from the City to change that structure as long as the company continues to perform and he does not abuse his position. "I do not have any intention of doing that. We have a ban on corporate jets, and we try to encourage our executives to go club or economy rather than first class, unless long-haul flights are involved," he says.
Lord Rothermere's aim now is to expand the business in all its chosen areas so that he in turn will have something larger and more competitive to hand over to the next generation.
First, there is the big challenge of steering the company through the transition to a world of online broadband communications and connectivity - something he believes is the biggest challenge society faces, after terrorism. "It's going to affect every single business in some way, and the ongoing challenge for this organisation is to see how it can embrace this new technology," says the DMGT chairman.
But the boy who loved newspapers from an early age remains optimistic about the industry, despite the march of online communications. "I still think newspapers are great businesses, I really do. They are wonderful businesses: they are hugely cash-generative, the most fun media without any doubt, and people love them and feel strongly about them. And they have a great future."
LIFE OF A PUBLISHING DYNASTY: THE NORTHCLIFFE STORY
Alfred Harmsworth, subsequently Lord Northcliffe, obtained his first newspaper, the Evening News. Together with his brother Harold Sidney Harmsworth, the first Viscount Rothermere, Lord Northcliffe was to build the most successful journalism empire in British history.
The Daily Mail was founded on 4 May. The newspaper, intended to have a broad appeal, was to become the flagship of the company for more than a century and earn the Ireland-born Alfred Harmsworth the reputation of "the father of modern journalism". A Sunday edition of the Daily Mail was launched in 1899, but closed after six issues following objections from religious groups.
This was the year Associated Newspapers was founded. At that stage, the group included the Daily Mirror, which began life in 1903 as a newspaper for women and was sold by Associated to Cecil King in 1947.
The Times (now part of Rupert Murdoch's News Corporation) was added to Harmsworth's stable, where it joined such titles as The Observer (now part of the Guardian Media Group) and the Weekly Dispatch. By this time the flagship Mail had expanded overseas to include a Continental Daily Mail. During the First World War, Northcliffe embarked on an attack on the policies of Lord Kitchener, a campaign that led to more than a million lost sales.
Lord Northcliffe died. In his will, he specified that all his 6,000 employees should get a bonus equivalent to three months' pay.
The second Viscount Rothermere, Esmond Cecil Harmsworth, became chairman of the Association of Newsprint Proprietors, a position he held until 1961. He added to the group the Sunday Pictorial, The Star, The News Chronicle and the Daily Sketch, all of which have since ceased publication.
The third Viscount, Vere Harold Esmond Harmsworth, became chair of Associated. The second Viscount Rothermere died in 1978.
The Mail on Sunday was launched. In 1987, Vere Harmsworth took complete ownership of the London Evening Standard, which had become the only evening paper in the capital after the Evening News closed in 1980. After 100 years in Fleet Street, in 1988 the group left for new premises in Kensington.
After his father's death, Jonathan Harold Esmond Vere Harmsworth, the fourth Viscount Rothermere, took the reins of the Daily Mail and General Trust, the holding company that owns Associated Newspapers, the Northcliffe group of regional papers, and broadcasting and new media interests. A year later saw the London launch of Metro, a free tabloid news digest, which was later extended to other major British cities.
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