Andrew Gowers: 'Sorry, Mr Glover, there's only room for one of us... and it's the FT'

UK circulation of the Pink Un is falling. It lost £32m last year, but Tim Webb finds the editor in expansive mood
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The Independent Online

Andrew Gowers, the editor of The Financial Times, has a telescope mounted on a tripod on the sixth floor of the newspaper's base overlooking the Thames. With one swivel you can look directly over the road into the office of media regulator Ofcom's chief executive Stephen Carter. The joke doing the rounds at 1 Southwark Bridge is that the FT will be the first to find out who has bought The Daily Telegraph. BSkyB chief executive James Murdoch, who popped into the FT's headquarters for lunch last week, couldn't resist a peek, says Gowers. It brings new meaning to Gowers' praise for Ofcom's transparency. Maybe Carter should start closing his curtains.

Andrew Gowers, the editor of The Financial Times, has a telescope mounted on a tripod on the sixth floor of the newspaper's base overlooking the Thames. With one swivel you can look directly over the road into the office of media regulator Ofcom's chief executive Stephen Carter. The joke doing the rounds at 1 Southwark Bridge is that the FT will be the first to find out who has bought The Daily Telegraph. BSkyB chief executive James Murdoch, who popped into the FT's headquarters for lunch last week, couldn't resist a peek, says Gowers. It brings new meaning to Gowers' praise for Ofcom's transparency. Maybe Carter should start closing his curtains.

In truth, Gowers doesn't have much time to play with his telescope. The Financial Times, which this weekend celebrates the 25th anniversary of its first European edition, is now a global operation spanning three continents. Such empire building doesn't come cheap. The newspaper, owned by publishing group Pearson, lost £32m last year because of the advertising recession and a £10m relaunch. In 2002, Gowers' first full year in charge, it lost £23m. The editor doesn't seem perturbed about guzzling Pearson's cash. "You have to look at the big picture. There's no point in being short-termist."

The UK newspaper market is in genuine decline for "the Pink Un". Full-price sales of the FT in the UK and Ireland (which strip out bulk sales to hotels, airlines and so forth) in January were 103,000, according to the Audit Bureau of Circulations. That's a 10 per cent decline on the previous year, more than twice the rate of decline experienced by its nearest competitors in the UK, The Daily Telegraph and The Times.

But the FT's reach goes far beyond the UK. Gowers describes the FT as a three-legged animal. In 1999, it launched a US edition, and a year later it embarked on a joint venture with the German media group Bertelsmann to publish FT Deutschland. In September it began publishing an Asian edition. With sales of around 30,000, it is "the baby new leg", he says. Total sales figures last year are much healthier than the UK sales at just under 450,000 (see graph, facing page). Gowers insists he will not stand by and watch UK sales decline but concedes: "Competition from our peers in the UK is one part of the picture for me."

He is not too worried about Stephen Glover, one would-be competitor, who wants to launch a new upmarket daily newspaper in the UK. Glover has been touting City investors for £15m to launch the Le Monde-style paper. "It's ambitious," says Gowers. "But I find the proposition that you can get something off the ground for that amount of money implausible." He added: "There is already a newspaper in that mould - The Financial Times. There isn't room for another."

The internet is another battleground. The FT poured an estimated £150m into launching ft.com and Pearson wants a return on its investment. Last year, the FT began charging readers between £70 and £200 a year subscription for some of its online content. It now has around 70,000 subscribers but, because it has been rolled into the newspaper operation, there is no way of telling if it is profitable. The distinction between online and print is not important, Gowers says: "In a sense I do not care whether readers read the paper online or in print."

No longer seen as an expensive add-on, ft.com is an integral part of the FT's operations. "When a story breaks, the first thing we do is ask ourselves what we will do on the web." Before the internet era, the FT was revered as the bible for City workers, chronicling the previous day's events. "Now, there is no such thing as a newspaper of record," he says. Moving with the times, the newspaper provides more exclusive stories and analysis. "We think, 'How do we add value for readers the next day who are paying £1 for the newspaper?'"

One of the FT's biggest competitors is the US-based The Wall Street Journal, owned by Dow Jones. It is still smarting from the FT's move into its backyard, given that the FT sells just under 140,000 copies in the United States, an 8 per cent increase on last year. The Wall Street Journal's European edition sells fewer than 20,000 in the UK. As well as having FT Deutschland, the title is also the majority owner of Les Echos in France and the Spanish daily Expansion.

Gowers does not want to FT-brand Les Echos and Expansion, because he feels the brands are strong enough. Forming joint ventures to break into new markets is consistent with the FT's strategy. But analysts say it remains to be seen how far they can penetrate the US and Asia market without a similar partner. There is also the danger that, by trying to appeal to readers in such diverse markets, the FT might dilute its unique brand. Gowers argues that its core market is made up of decision-makers in business and politics.

Pearson's publishing and education businesses are much more profitable than the FT. It has prompted speculation that its chief executive Dame Marjorie Scardino would be prepared to sell the newspaper. Her stock answer has always been that it would be sold "over my dead body", but she has been less vociferous of late. Gowers insists he has never needed assurances about the FT's future from Scardino. "Every conversation I have had with Marjorie Scardino over the years, she has said the same." Motioning to his phone, he adds in all seriousness: "Call her now if you like, and she'll say it again."

He has strong views on newspaper ownership. He is not a fan of the way Daily Express owner Richard Desmond, or Rupert Murdoch, have managed their papers. "I always prefer it if people own newspapers and run them as a business. You tell me why Rupert Murdoch has run The Times at a loss for all these years. There must be a balance." There has been speculation recently that Murdoch would like to buy the FT. Gowers says Murdoch probably wouldn't employ him anyway because Murdoch might find his views on Europe "dangerous".

Gowers would not welcome Desmond as the owner of The Daily Telegraph either. "I do not find Richard Desmond an appetising prospect. The Daily Star and Daily Express are not quality newspapers."

He has little sympathy either for Andrew Gilligan, the former BBC reporter whose story about the Government's dossier on weapons of mass destruction in Iraq led to the Hutton inquiry. "There was so much crap written about the Gilligan story. The story was wrong in a very fundamental way. We need investigative reporting but we must do it well. We don't need the freedom to bandy around half-truths and rumours."

The Financial Times has had its fair share of scrutiny from the powers that be. The Financial Services Authority helped win a High Court ruling last year to force the FT, among others, to hand over leaked documents which detailed a possible bid by Belgian brewing giant Interbrew for London listed rival South African Breweries. The FSA had argued that the resulting stories distorted the share prices of the two companies. Gowers says that the regulator should not waste so much time pursuing the media. "I was asked on a radio programme after the court order if I had packed my pyjamas and toothpaste just in case. It was not very serious. But there are bigger fish to fry and worse abuses going on."

The editor did not have the easiest start upon taking up his appointment in 2001. It was a big surprise when Robert Thomson, who had been heading up the US operation and who now edits The Times, was passed over for the job. Gowers was also criticised by some because his background is in foreign rather than financial news. He insists that he has taught himself anything he didn't already know, and that working abroad was an equally valuable experience. "I have no doubt that whoever succeeds me will have worked abroad."

He isn't planning on going anywhere. Gowers hopes to last as long as his predecessors, who have enjoyed roughly 10-year reigns. "I am having such a ball here I am not thinking of anything else," he says. He has survived what he calls the worst advertising recession ever. And sales overseas - the FT's future - are growing. So, watch out Stephen Carter: Gowers and his telescope might be around for a while yet.

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