The Telegraph staff are breathing a sigh of relief but the Barclays are no softies
o it's over. The Barclay brothers have bought the Telegraph Group, including The Spectator which is what we all thought they had done five months ago. Now only a last-ditch legal challenge by Conrad Black can scupper the deal, and that is thought quite unlikely to succeed. In financial terms, at least, the Daily Telegraph is the jewel the Barclays have sought, and accounts for almost all of the £665 million they have paid. Sir Frederick and Sir David Barclay have acquired the highest-selling quality newspaper in Europe and one of the most profitable, and they have paid more than anyone ever has for a title. For them it must be a dream realised to have captured one of the great newspapers in the world — not to mention The Spectator, probably the most distinguished magazine in the galaxy.
Down at Canary Wharf almost everyone is breathing a sigh of relief. Once DMGT dropped out last week — its venture-capital partners balked at the escalating price — there were fears that 3i might triumph. David Montgomery, the former chief executive of Mirror Group Newspapers, and the man heading 3i's bid. had identified greater cost savings than anyone else, and was longing to apply his scalpel. In the event the Barclays could pay more. It is assumed that they will be less draconian, but people would be unwise to conclude that there will be no cuts. Every bidder for the Telegraph Group has identified savings, and the Barclays are no softies. They have paid a great deal for a company that is making less than £50 million a year and, although they have no shareholders breathing down their necks, they will want to make their capital work for them, But my guess is that they will take their time and not make any hasty decisions.
Will they make good proprietors? Many of their former employees say that they have been model owners at the European (which they bought, and finally closed, after spending tens of millions of pounds), the Business and the Scotsman. They do not interfere in a dayto-day sense, or thrust their political views down the throats of their editors. They are also in for the long term, unlike the venture-capital bidders who would have sold on the Telegraph Group after making a quick turn. It is true that Sir David and Sir Frederick are 69, and rather old to be acquiring major newspapers, but Aidan Barclay, Sir David's son, is spoken of as an able person, and may well emerge as the chief executive of the Telegraph Group. The Barclays therefore have quite a lot to recommend themselves as proprietors of the Daily Telegraph, It should be added that they are instinctively in tune with the paper's political views. But before I am accused of sucking up to the probable new proprietors of this magazine, lei me point out a snag. The Barclays may be brilliant businessmen but they are relatively novice publishers. Not only that. They have not had much success with any newspaper venture with which they have been associated. They could not make the European work (perhaps no one could) and, after a promising start, the Business has rather fizzled out. Their stewardship of the Scotsman has been no more than moderately successful. As newspaper publishers they have been playing towards the bottom of the second division, and suddenly find themselves in charge of one of the leaders of the premier league.
It might be argued that the Daily Telegraph is a perfectly oiled machine which largely runs itself. There used to be some truth in that. But the paper has been gradually losing circulation for many years. Its management has to make up its mind whether or not to go tabloid. (I would say, definitely not). It is just possible that Rupert Murdoch will try to scare the Barclays witless by starting another coverprice war. Many difficult decisions and hard choices loom. The Barclays will find themselves surrounded on one side by a group of snake-oil salesmen who will say that the Daily Telegraph will only arrest its gradual sales decline by attracting more young readers, and on the other by a group who will argue that it must attend much more to its older core readership. The Barclays are evidently very smart; but they are not experienced publishers, and one must wonder how well they will fare in these distinctly choppy waters.
Of course. they could simply rely on the existing management, many of whom are perfectly good. But new blood is surely need
ed, and in any case incoming proprietors invariably wish to insert their own people into the upper echelons of management. Whom have the Barclays got? I have mentioned Aidan, but he is not a newspaperman by background. The man who runs their existing publishing interests is Andrew Neil, who also has several other day jobs, and likes to pop off to his house in Valbonne in the south of France whenever he can. The Telegraph Group's management is so alarmed by the prospect of the abrasive and somewhat trigger-happy Mr Neil riding into Canary Wharf that they have sought assurances that he will not be involved. It is certainly true that Mr Neil has been kept out of negotiations for the Telegraph Group, which is very odd, considering that he is the Barclays' senior newspaper manager. Might they have finally tired of him? If he were denied any role at the Daily Telegraph, it would be a bitter blow, not to say insult, to him. And whom could the Barclays then turn to`? On the other hand, his record as an executive is not one that could inspire anyone with boundless confidence. Moreover, he is a metropolitan figure who is scarcely on the same wavelength as the Daily Telegraph's Middle England readers. The Barclays have a problem with Mr Neil on board, and they have a problem without him.
We should just consider the possibility that Conrad Black might still scupper the deal. He remains the controlling shareholder of Hollinger International, which intends to sell the Telegraph Group to the Barclays. As things stand, Lord Black is unable by law to prevent the sale, but he may return to a certain Judge Strine in Delaware in an attempt to assert his rights. My reading is that Lord Black has long ago given up hope of being able to retain control of the Telegraph Group, and that he is probably resigned to a sale. At the same time Hollinger International is threatening to sue him to kingdom come, and relieve of him of hundreds of millions of pounds. There is probably a trade-off. Lord Black may not oppose the sale if Hollinger International agrees not to take him to the cleaners.
Let us assume that the Barclays have won. Whatever my reservations about their track record as newspaper publishers, let us wish them well. What a prize for them to have gained, and what a jewel for Lord Black to have thrown away! But we should not imagine that the path ahead is adorned with roses and scented with jasmine. It will be long, and it may be quite stony.
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