The press
Mirror up for grabs
Paul Johnson
The decision by Reed International, the paper firm, to have a public float for Mirror Group Newspapers, is ominous news in the long term for Fleet Street's overpaid and often underemployed workers. It is not exactly comforting for the Labour Party either. The International Publishing Corporation, which includes the Mirror Group, was a huge publishing con- glomerate built up by Cecil King. It has never had a single controlling interest. After King was ousted, it was acquired by Reed in a sort of reverse takeover, Reed paying £115 million. It was a sign of the times that a paper firm should buy its principal customer, rather than vice versa. Now, Presumably, the arrangement no longer makes sound commercial sense. MGN, like most Fleet Street groups, provides a poor return on capital. It made a profit of only £8.1 million last year, against £26.5 million for 1PC magazines, provincial newspapers and other publishing operations. Profits on MGN may be up this year, since its six newspapers are all doing well at present; in addition MGN expects to get about £78 million when it goes public next year. That Puts a value on the company of some £112 million, a little less than Reed paid for IPC in 1970. So Reed is getting rid of it while the going is good.
Floating, of course, is all the rage in Fleet Street at present, helped by the huge pro- fits, present and to come, of Reuter's finan- cial services. Trafalgar House successfully floated the old Beaverbrook group, plus Morgan-Grampian, and old Express hands Who took advantage of the opportunity to acquire shares are now sitting pretty: they opened at 23p and today are worth about 130p. But once a newspaper group is floated and owned by a multiplicity of shareholders, including institutional in- vestors, it is under inevitable pressure to generate profits in relation to its resources. Cashing in on Reuters is a once-and-for-all bonanza; after that golden goose is killed, Papers will have to pay appropriate dividends, otherwise the shares fall, If the MGN float goes well and is follow- ed (as rumoured and denied) by S. Pearson floating its Financial Times, a new epoch Will dawn in Fleet Street: the post- Proprietorial era. Hitherto, the existence of men or groups who own newspapers for historical, political, peerage-earning or Other non-commercial reasons has pro- tected Fleet Street from the normal chill winds of trade. As a result it employs far too many people, both journalists and mechanical staffs, at very high wages. Times are changing anyway as Fleet Street begins to shift its printing operations out of its own congested bowels, to the Docks and elsewhere, thus removing one of the factors which keep wage rates artificially high. But the need to generate realistic profits will put still more pressure on wages and above all on manning. The Mirror group is a case in point. How come, shareholders will ask, six healthy newspapers (including the modern and efficient Scottish Sunday Mail and Dai- ly Record) can produce £8 million profit when Murdoch's Sun alone raked in £22 million? The answer is that there is a lot of fat on MGN. It will have to go. With Mur- doch slimming down the Times-Sunday Times as hard as he can, and the Express group under similar pressures, Fleet Street might at last undergo the productivity revolution which technology offers and which most of the rest of British industry, thanks to Mrs Thatcher, now takes for granted.
What of the political consequences? The Mirror group has always loyally backed Labour. It did so even during the Foot regime, though halfheartedly, and con- tinues to do so, its latest service being the detonation of the Parkinson explosion. Both Reed and MGN seem to want this link to continue, but of course nothing is certain once the company is floated. The risk for Labour is that MGN under its new, profit- oriented ownership may slide into the SDP camp, with its 'social market economy' philosophy. If the Mirror is to remain Labour's trusty supporter, the company will need strong leadership from someone who combines 'personal loyalty to the party with a proven ability to run a huge publishing business successfully and, above all, to secure significant gains in product- ivity. Granted such requirements, the finger points to Robert Maxwell. Like him or not, he has turned round the British Printing Corporation by precisely the kind of ration- alisation the Mirror group needs. For the sake of the Mirror, a paper I respect, I hope it gets a powerful chairman like Maxwell. The group has never been the same since King went, and it is I believe a law of nature that Fleet Street needs such figures: pro- prietors, with all their faults, are the best people to run our papers.
Needless to say, if the Mirror papers cease to back Labour, there will be a tremendous row. Even as things stand, the Labour party is paranoid about Fleet Street. In all the recent excitement it has almost escaped notice that, at the Brightcn Labour conference, a motion was passed overwhelmingly (meaning it is now official party policy) and against the advice of the National Executive, pledging a future Labour government to impose a system of censorship and public ownership on the media. The motion orders the party to go
ahead with setting up a new Labour daily newspaper. This in itself means nothing, since neither the party nor the unions has the money to do so, and the chances of such a paper coming out, let alone succeeding, are I should say nil. The motion also includ- ed a right-of-reply clause, for which there is a reasonable case.
The really sinister elements in the new Labour policy, however, are the censorship and control provisions. First, Labour would give statutory powers of punishment to a, 'reformed' Press Council packed with union and 'community' members. The same 'reform' would be applied to member- ship of the IBA and BBC governors. Se- cond, public money would be used to set up a National Media Enterprise Agency to finance and print papers all over the coun- try, presumably on the lines of Ken Liv- ingstone's Labour Herald. Radio and TV stations would be set up by similar means. Third, existing national newspapers would be taken over by journalist-printworker cooperatives, and run by trade union officials. Fourth, during elections, political censorship would be imposed to ensure 'equal' time, space etc, and opinion polls would be banned. There is no doubt whatever that implementation of this policy would end freedom of the press in this country and introduce a totalitarian system of control. I can't see the Mirror Group, however owned, supporting that kind of thing.
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