Why might Dr O'Reilly want to sell 30 per cent of the Independent?
The news that Tony O'Reilly may be willing to sell 30 per cent of the Independent newspaper seems utterly astounding. It has
enjoyed a considerable succes d'estime by going tabloid. From being a catch-up sort of newspaper which did not excel in any particular area, it has become a trendsetter. First the Times followed suit and produced its own tabloid version. Then the Guardian announced that once it has acquired new presses it will transform itself into a so-called Berliner — i.e,, the same shape as Le Monde. The rejigged management at the Daily Telegraph will have to make up its mind whether or not to produce a tabloid edition. Nor is this tabloid craze confined to Britain. In several other countries, including Dr O'Reilly's own homeland, Ireland, broadsheets have been turning tabloid, or intend to do so.
The Independent has not simply changed the way quality newspapers look. As a result of going tabloid it has increased its circulation by some 20 per cent. In a market that has been steadily declining, and in which the Independent itself was an increasingly sickly player, this is a spectacular achievement. Renewed success has brought some extra editorial vigour, though I am not over-fond of the hectoring front pages with their selective lists of statistics. But no one could any longer say that the Independent is an alsoran. Whether the plaudits should go to the paper's editor, Simon Kelner, or to its chief executive, Ivan Fallon — my guess is more to the former than to the latter — the Independent has transformed the national press, influenced the international press and restored its own fortunes.
All the more shocking that at the moment of triumph, Dr O'Reilly should reportedly be considering selling a 30 per cent stake in the newspaper. According to a source in the Times, the money is being sought so that the Independent can undertake a major marketing campaign. This is very difficult to believe. To sell a large minority shareholding for such a purpose would be financial lunacy. It is not as though Dr O'Reilly's company is down to its last penny — far from it. In any case, everyone knows that money spent on marketing often produces precious few returns. It would not make sense to sell off the family silver for this reason. No, there has to be another explanation. Dr O'Reilly, who is 68, has not been in the best of health, and it may be that he does not want to face the task of reviving the financial fortunes of the Independent without a strong partner who can offer expertise and economies of scale. For, despite its soaring circulation, the newspaper is still losing money; estimates range around £10 million a year. Associated Newspapers (publishers of the Daily Mail) and Trinity Mirror have reportedly been approached, and the German newspaper group Axel Springer is suggested by some as a possible partner for Dr O'Reilly.
But why would another publisher want 29.9 per cent of a newspaper controlled by Dr O'Reilly? Unless there were a chance of advancing towards control, there would be no point at all. As it happens, Dr O'Reilly began with a 29.9 per cent stake in the Independent, and was able eventually to buy the majority stake held by Mirror Group Newspapers (as it then was), as well as smaller holdings owned by a Spanish group and an Italian group. No sensible publisher would want to buy 29.9 per cent of the Independent unless there were some prospect of ending up owning the whole shooting match. There is no evidence that Dr O'Reilly is prepared to offer such an assurance.
The Independent's problem — for Dr O'Reilly as well as for any prospective buyer acquiring a stake — is that it is still losing so much money. My guess is that with its existing cost base it would have to sell well over 300,000 — in other words, add a further 20 per cent to its daily sale — before getting anywhere near break even. Such an increase in circulation does not seem very likely unless Mr Reiner has another spectacular trick up his sleeve. Of course, I happen to believe that it is possible to produce a quality title at a fraction of the Independent's cost base, but this does not appear to be a view shared by its current management.
Dr O'Reilly once wanted to own the Independent more than he wanted to do anything else on this earth. For many years he has borne its losses gamely. Something now has changed. There is no evidence that he is on the verge of disposing of the paper, but reports that he is prepared to sell a 30 per cent stake in his once beloved Independent suggest that he, or his company, cannot go on running it as they have for ever.
The editor of this magazine has his feuds, as everyone does, and from time to time he tries to draw me into them. Naturally I
always resist, which he takes in good humour. So when he told me a story involving the journalist Tom Baldwin, with whom he has had the occasional spat, I did not feel inclined to take it very seriously. But several inquiries have caused me to change my mind.
At a party last week at the Highcliff hotel in Bournemouth given by Lord Hesketh, Tom Baldwin, who is deputy political editor of the Times, was seen removing a bottle of champagne, with which he left the room. In response to a series of questions from The Spectator, Mr Baldwin, to his credit, has confirmed that the incident took place. I should mention that I have never met Mr Baldwin, or even spoken to him on the telephone.
Should one take it seriously? One could argue in Mr Baldwin's defence that had he stayed at the party he could have drunk the champagne (Pol Roger) anyway. It is hardly the grossest sort of theft. Moreover, he may have been slightly tipsy, and in no position to weigh the merits of what he was doing. It is also uncertain whether the bottle was full or half empty. If the latter, he may have felt that he was in effect finishing a drink he had already started. He may have also reflected that Lord Hesketh is enormously rich, and would hardly mourn the loss of a little Pol Roger.
So I thought to myself, this is a trifling matter, not worthy of inclusion in this column. And then I considered what would have happened if a politician — say a member of the shadow Cabinet — had been caught doing what Mr Baldwin did. Newspapers would have mentioned it, probably including Mr Baldwin's, and some might have got quite worked up. Journalists should not expect politicians to observe higher standards of behaviour than they do themselves.
T n last Sunday's episode of Bremner, Bird 1 and Fortune, the Newsnight presenter Kirsty Wark interviewed Rory Bremner amusingly playing Michael Howard. At one stage the lights went out, and when they came on the spoof Mr Howard had blood on his lips, and Kirsty a gash on her neck. Some BBC insiders have reportedly grumbled that Ms Wark is earning money by appearing on Mr Bremner's show. Surely the point is that she undermines her reputation as a serious interviewer. What will we think when she next confronts Mr Howard on Newsnight?
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