The story we couldn't cover: Ian Jack, the editor of the 'Independent on Sunday', on the battle for the 'Observer'

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The Independent Online
THIS newspaper owes its readers an explanation. Last week we deprived you of a story - widely and wildly reported in other newspapers - that matters to anyone concerned with the British press, and in doing so did ourselves no good. The story concerned our company, Newspaper Publishing plc, and its negotiations with Lonrho, which owns the Observer, with a view to acquiring that newspaper. Last week the deal fell through. On Thursday morning, Lonrho announced it would accept a rival offer from the Guardian. In the meantime, in the face of silence from Newspaper Publishing and the daily Independent, the public view grew that we intended to buy the Observer only to close it, and that we were moist- lipped (and inexplicably rich) predators motivated solely by profit - that we didn't give a toss for the Observer as an institution, its editorial traditions, its readers and its staff.

A remarkable own-goal, given that this perception is very far from the truth. So how did we come to score it? The answer lies in the fact that the many roles played by a newspaper in national life - social, cultural, political, traditional - are all underpinned by their organisation as a business and stand or fall by their commercial success. Business and journalism have different roles and play by different rules. Businesses, especially when they are conducting delicate negotiations about their future, need to keep some things secret. Journalism, at its cutting edge, needs to break secrets. We kept quiet because the talks between Newspaper Publishing and Lonrho were still taking place, and would stop if we broke the confidentiality of the negotiators, as was explained on Thursday in a statement issued by Andreas Whittam Smith, chief executive of Newspaper Publishing and editor of the daily Independent.

These negotiations began because - business again - the Observer was losing many millions of pounds every year. The losses had been sustained by Lonrho and its chief executive, Tiny Rowland, partly because the paper was a useful vehicle for Mr Rowland's views and campaigns, most famously against the Fayed brothers who had won control of House of Fraser stores against his opposition. But last year Lonrho decided that it could not afford this expensive luxury and some months ago approached Newspaper Publishing as a potential buyer. And so the talks began.

Why should we have been interested? For two reasons, business and journalism, which in this instance cannot be separated. To take business first: the market in quality Sunday newspapers is dominated by the Sunday Times, which is owned by Rupert Murdoch's media conglomerate and has a great deal of money behind its success and its ceaseless struggle to be even more dominant. Profit begets promotion (posters, television commercials) begets circulation begets advertising revenue begets profit. It is, from the outside, a very difficult circle to break, as its rivals know only too well. Andrew Neil, the editor of the Sunday Times, described the situation in an appropriately Scottish metaphor last week. It would now be a battle, Mr Neil declared with his usual modesty, between Brechin City and Raith Rovers (that is the Independent on Sunday and the Observer, in no particular order) to see who should play Glasgow Rangers (the Sunday Times) in the cup final.

Well, we have always been Raith Rovers fans ourselves. They have played some very attractive football and unlike Rangers, whose supporters tend to be as aggressively partisan as Mr Neil's newspaper, they carry no sectarian baggage. Many in Scotland do not care for Rangers. Many Sunday newspaper readers do not care for the Sunday Times. It seemed to Newspaper Publishing, a relatively small company whose revenue comes entirely from two newspapers, that one way to break the Sunday Times' dominance was to achieve a union between ourselves and the Observer, to enhance our profits and our journalism.

Did we intend to kill the Observer? No, that would have made no sense, which brings us to the journalistic argument. Our silence last week helped to perpetuate two untruths. One, that the Observer was 'the only quality liberal Sunday newspaper'. Two, that the Observer's staff and traditions would be thrown overboard. In fact, very little separates the tone and attitudes of this newspaper and the Observer, or rather the Observer as it was long ago, before Lonrho owned it. We are committed to the journalism of ideas, of independent voices, sceptical of establishments, to the left of the centre.

A union would have helped to give this philosophy the power it needs and deserves in a country where conservatism, in all its forms, too often lacks a genuine challenge. But such a union could only have been successfully achieved with the help of many Observer staff. The planning of the new newspaper - and it was never more than embryonic - always included space for between 30 and 40 Observer journalists and the hope that they, with other staff, would be persuaded to come.

It won't happen. The Guardian has won the Observer and, in terms of the preservation of newspaper titles and identities, that is undoubtedly good. But jobs will be lost under that arrangement, too. The Guardian cannot afford losses on the Observer's scale. Staffs will be integrated and costs shared, just as they would have been under our proposal. The days of the indulgent proprietor are over and so are his subsidies. But that, in the cause of independent journalism unwilling to bend to rich men's whims, can only be for the better.

And the Independent on Sunday? We think it is a good newspaper. The awards and the reputation and circulation it has gathered recently suggest others share that view. However, being critical Raith Rovers fans, we also know that it has the potential to be an even better newspaper. We promise to be, and we shall be. As it happens, Raith Rovers have won promotion this season to the Scottish Premier Division.