AND ANOTHER THING
Whales waiting for feeding time in the Independent's sea of troubles
PAUL JOHNSON
The future of the Independent, not indeed as a newspaper — that is assured but as a self-controlled publishing business, is uncertain, to put it mildly, and it may be that by the time you read this, or shortly afterwards, the minnow will have been swallowed by one of the whales. I used to joke that if the Independent had to gouge more cash out of its European backers, La Repubblica and El Pais, it would have to change its name to the Continental. But sal- vation does not seem to lie that way, since money is short on the Continent these days, and the Italian and the Spanish angels are more inclined to dilute their holdings than enlarge them. The business needs a capital injection of £20 million pretty quickly and by far the most likely provider at present is Lord Rothermere and his Associated Newspapers. I doubt if Rothermere will put in much money without securing effective control of the venture.
So what went wrong? That is not really a fair question. The launching of the Inde- pendent by three venturesome journalists, Andreas Whittam Smith, Stephen Glover and Matthew Symonds, who risked even their family homes, is by any standards one of the bravest gambles in the history of British journalism, and for a time at least among the most successful. I doubt if there has ever been a new national newspaper which established its character — and a strikingly high-quality and mature charac- ter too — quite so quickly. It became an institution, the daily notice-board of the Chattering Classes, almost overnight. If it had a strain of holier-than-thou which some found humbugging, that too was an essential part of its character. The Chatter- ing Classes are holier than thou.
Nor did the founders make any strategic mistake, so far as I can see. The launching of the Independent on Sunday was not an act of hubris. It was a logical and indeed inevitable step once the daily was going strong. And, whatever you may say about Whittam Smith's ruthlessness in seeing off competition from the Sunday Correspon- dent — it was brutal to the point of sheer cruelty — it did not lack business acumen. To be sure, he made an error of judgment in trying, once the business was established, to combine the roles of editor-in-chief and chief executive, as I warned him at the time. But it is easy to see why, with his slen- der personal stake in the equity, he felt he needed to concentrate power. Most of the mistakes made in management and editori- al, and the devastating blow to the paper's morale when Whittam Smith fell out first with one, then the other, of his co-founders — on both occasions over trivialities occurred after the experiment ran into trouble.
No; the misfortunes of the Independent spring from more fundamental causes, which have nothing to do with Whittam Smith's direction. The paper's parabola proves that, in the post-Wapping age, when closed-shop unions no longer pose insuper- able obstacles to management initiatives, it is possible to create an entirely new quality newspaper in Britain. But it also proves that, without enormous financial resources, it is not possible to carry it through a whole trade cycle. Whittam Smith was unlucky in that his business has fallen foul of the most prolonged recession for half a century. It is the general economic climate which has done for the paper's independence. Natu- rally, once money became tight and the sense of security ebbed, mistakes followed thick and fast — the falling out of the founders, editorial chopping and changing, failures of nerve, cuts and more cuts, even lowering the quality of the newsprint. Both papers now show the fatal signs of cash shortage and low morale. But all this is par for the course.
One of the founders has already left and written an angry book. A second is rumoured to be about to lose his seat on the board. Whittam Smith's own survival is obviously in peril. So once again events `Huge collections of galaxies are receding from the earth's location at a rapid rate. Wouldn't you?' confirm old Roy Thomson's view: `Aw, if ya want to know who runs a newspaper ya have to ask, "Who owns the equity?"' The survival of Lord Stevens as the man who runs Express Newspapers would seem to dispute this maxim, though even he may now have to seek refuge in the brawny arms of Tony O'Reilly, who controls a little Irish newspaper empire of his own. But Stevens is a financial conjuror in the way Whittam Smith can never hope to be. The latter has never had more than a tiny stake in the business, and a newspaper boss who doesn't control the equity is only as solid as his last circulation figures. Sales of the daily and Independent on Sunday have dropped by about 12 per cent in the past year.
There are alternatives to the Rothermere acquisition of the firm, but I think his own- ership is the most likely to secure both the survival of the Independent and, paradoxical as it may seem, the preservation of its edi- torial character. I have had dealings with Associated Newspapers for many years now, and have come to the conclusion that Rothermere is the most underrated of the major proprietors, as well as being the last of the traditional breed since the downfall of Lord Hartwell.
Rothermere keeps a pretty low profile, but his watch on his business is beady-eyed and he knows the industry thoroughly. What I like about him is that he has the patience and courage to play for the long term. He poured money and resolution into the Mail on Sunday long after most ven- turesome entrepreneurs would have called it a day and cut their losses, and he was rewarded by seeing it become a resounding commercial success. If he takes on the Independent, he cannot be expected to pay much money for it, so Whittam Smith and Co must accept that their holdings are faery gold. On the other hand, Rothermere can be relied on to ensure that the Indepen- dent gets adequate working capital to guar- antee its future beyond peradventure, and if my job were at risk that is the option I should prefer. Nor is Rothermere likely to do anything to the paper's character which will make it unacceptable to the Chattering Classes, because he knows that is where its constituency lies. The survival of the Inde- pendent on Sunday is another matter. I do not entirely rule it out, but if Rothermere risks running it in tandem with the Mail on Sunday, he'll be a braver man than I am, Gunga Din.
Previous page
