POOR PROSPECTS FOR POSH PAPERS
The press: Paul Johnson
surveys the chilly outlook for quality nationals
AP 1 ER the big profits and the heady expansion of the post-Wapping revolution years, gloom has settled over the national newspaper scene. Circulations, on the whole, are holding up but there is an advertising famine, rates are being cut, profits are falling, jobs are going, and expenses, so dear to the journalist's heart, are being narrowly scrutinised, even de- nied. Two nationals, Today and the Inde- pendent on Sunday, are in serious danger of being sold or disappearing. Journalists, never the best judges of their own in- terests, have been forming up and earning stern rebukes from stony-faced bosses. At the Guardian there has been much trouble over a pay freeze. At the Telegraph the editor-in-chief, Max Hastings, responded to a disruptive chapel meeting last month by sending a disgusted memo to staff: 'Any other company in Britain today, in the midst of recession, would find it almost literally unbelievable that a significant minority of employees would down tools and inflict damage upon their own product in the face of job losses which amount to barely 3 per cent of the editorial staff.'
In fact the Telegraph group (along with the Financial Times) is in a better position than the other qualities to come through bad times unscathed. True, for the first quarter of 1991, pre-tax profits fell from £10.9 million to £7.9 million. But this follows two outstandingly good years and, for 1991, even a worst-case projection should not bring the profit total below £30 million. The truth is that with a stable circulation at just below 1,100,000, and an efficient management, the Daily Tele- graph, at 40p, is a natural money-spinner.
In any case, journalists, on the Tele- graph or indeed anywhere else, have rarely been in a weaker position to resist manage- ment economies. The NUJ is divided and impotent, discredited by left-wing lunacies and financial scandals. The Institute of Journalists does not carry much weight. Many journalists no longer belong to a union. The abler and more ambitious like the notion, favoured by most manage- ments, of individual contracts, that is salaries determined by performance rather than by collective negotiations. National
newspapers' journalists are, in my opinion, now well paid and have good working conditions on the whole. They would be well advised to forget about a trade union, an outmoded institution doomed to dis- appear, and create a proper professional association, which would earn the respect of managements and so exert more influ- ence over their decisions.
In the meantime journalists, and man- agements for that matter, will have to get through the recession as best they can. The Guardian appears to have made a sharp recovery, pulling 20,000 or more ahead of the Times and Independent, which are not much above the 400,000 mark. Its rivals claim it is buying readers, especially stu- dents, and it is believed to be losing money at the rate of between £20 million and £30 million a year. But then the Guardian belongs to a wealthy group which can sustain losses. And if it is buying readers it is also winning them by editorial quality. Its news coverage is markedly better than the Independent's, and it is a more enjoy- able, above all wittier, read.
The Times' losses are not much below the Guardian's, probably about £20 million a year. It too can claim an appreciable improvement, in editorial authority, under Simon Jenkins, and in theory it belongs to the strongest newspaper group in Britain, with the Sun, News of the World and Sunday Times all market-leaders and high- ly profitable. The difficulty is that this group, in itself, is part of a wider empire which is heavily overborrowed and must milk its profit-spinners to stay alive. Rupert Murdoch, that Napoleon of fast action and snap decisions, is no longer his own master. Like a third world country in pawn to the IMF, he cannot do many things without asking his bankers first, and there are other things he must do, such as disposing of assets, to conform with their timetable. Moreover, he is selling in a buyer's market. He is negotiating to part with many of his American magazines for $650 million. He says he is open to offers for his British magazines such as Car, Supercar and New Woman. There are persistent rumours that he will have to sell the loss-making Times too (and he will certainly have to do something drastic about Today). But these are circulated by rivals. In my view things will have to get decisively worse for Murdoch to part with the source of such status. In the long term his satellite network, now swallowing money, should make huge profits, and it may be that in the second half of the 1990s the Murdoch empire will be stronger than ever. But in the meantime the Times has to see the rival Guardian pulling ahead while it absorbs a price rise and 10 per cent budget cuts.
Its consolation is that the Independent is in worse trouble. Its circulation, for the first time, is showing signs of stagnating or even dipping. It is still in profit but what it earns cannot cover losses on its Sunday partner. Six months ago Andreas Whittam Smith bought time (and lost some inde- pendence) by getting El Pais of Spain and La Repubblica of Italy to supply £21.5 million of working capital. Now Whittam Smith is again, like Murdoch, under press- ure from his bankers. When the Indepen- dent on Sunday was launched early in 1990, Whittam Smith was grudgingly admired by some, and condemned by others, for the ruthlessness with which he had spiked the guns of the new Sunday Correspondent, which fell a victim in due course. But what the fight between the two newcomers obscured was the harsh truth that there is profitable room not for five quality Sun- days, or even four, but for three. Indeed some would argue that three is one too many for profits all round. The recession has rammed these facts home and left the Independent on Sunday, which has failed to overtake either the Observer or the Sunday Telegraph, looking vulnerable. To kill or sell the paper would be the first real setback in what, for Whittam Smith, has been an astonishing career as a newspaper entrepreneur. But that fell sergeant, the banker, is strict in his arrest.
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