THE THREAT FROM EDDIE SHAH

The Press:

Paul Johnson welcomes a

new shock to Fleet Street

TWO THINGS strike me about the new ABC figures for the six months from October 1984 to March 1985. The first is the continued progress of the Guardian and the Times. Against a 1983-4 figure of 466,186 copies sold, the Guardian raised its average to 485,391 in the corresponding period 1984-5, a gain of nearly 20,000. This March, for the first time, it crossed the half-million barrier with average sales of 500,552. That is a magnificent achieve- ment. The Times did even better. At 467,763 its sales over the last six months were 90,000 up over the same period in 1983-4 (376,932), and in March it averaged 496,283, only 4,000 short of the half- million and the Guardian. So we will shortly have two more qualities regularly selling over half a million copies each.

The third, the Daily Telegraph, sold in March an average of 1,230,127 copies. That, as it happens, is 33,000 copies more than the Times, the Guardian's and the Financial Times put together. But the Telegraph's sales have been sliding slowly for a long time, while the Guardian's and the Times's have been shooting up; and the days of overwhelming domination of the quality field by the Telegraph are over. That is one reason why its chairman and editor-in-chief, Lord Hartwell, is building a new high-technology printing plant down on the Isle of Dogs in the Thames, with a complementary plant in Manchester. It is going to cost over £100 million, and a further £38 million will be spent in buying redundant printworkers out of their jobs. To finance this heavy expenditure, the company is enlarging its equity capital by 40 per cent, selling 21,500,000 preferred ordinary shares at 140p a share. These will be privately placed, as they say, so the paper is not going public, and the family will retain control of it.

Are they a good buy? I would say they are, for in my view the Telegraph is still the best and most solid property in Fleet Street. But it depends what view you take of the medium-term future of Fleet Street, which is both uncertain and exciting. If we take another view of those ABC figures, we see that in the Sunday field the News of the World, with its new and highly-

successful tabloid format, has done bril- liantly — at 4,750,346 it is up nearly

640,000 over its 1983-4 figure, and at the present rate of progress may well cross the five-million barrier this year. Naturally, it is making a handsome profit. However, the other big success story among the Sundays, the Mail on Sunday, while raising it sales to an average of 1,621,170 in March this year (its chief rival, the Sunday Expess, dropped 209,385 over the year, to an October-March average of 2,479,190), could not manage to make a profit at all; made, in fact, a substantial loss.

Something wrong here? Of course there is. And that is where Mr Eddie Shah comes in. Shah is a great, enterprising and courageous man, as he showed when he wiped the floor with the NGA at Warring- ton. His projected new daily, due next spring, will for the first time introduce the new technology, in all its plenitude, to the national scene. In the first place, it will be a seven-day-a-week publication, with no nonsense about separate daily and Sunday staffs, with all the overlapping and jealousies thereby engendered. Secondly, it will be full-colour, with a strong extra appeal to young people (not regular news- paper readers at all, in many cases) and advertisers: The editorial will be in Lon- don, but in Westminster, not Fleet Street, an important change; journalists will type (and correct) their copy directly into a computerised setting system, thus eliminat- ing the composing stage and the NGA workers, the highest paid in Fleet Street, altogether. Completed pages will then be sent to five (eventually more) printing centres, strategically sited near motorways, and distributed by fleets of vans. This will have the immense advantage of eliminating British Rail and its newspaper trains com- pletely. Shah intends, of course, to employ non-union labour. Until now, the ability of the print unions to pexsuade the NUR and Aslef to halt trains has been a powerful weapon in their armoury. It is one Shah need not fear.

The savings in costs Shah will obtain by running a modern operation like this are staggering. He will employ only 500 people to produce the papers, as opposed to about 2,000 for a comparable Fleet Street opera- tion. His print workers' wages may well be better than union rates, but of course they will be on provincial scales, and he will have none of the extras imposed by Fleet Street monopoly unions, or the hassle of endless disputes and stoppages. I calculate that his printing costs will be less than one fifth of comparable costs in Fleet Street, and his editorial costs will be much lower too — less than half, probably. Hence he should break even selling only 250,000 copies, and if he sells a million he will be coining money and at the same time have ample to reinvest in editorial and promo- tion. His black-and-white full-page ads, at £3,500, will be about 20 per cent of similar Fleet Street rates, and the big attraction, a page of full colour at £8,500, compares with £40,000 in Fleet Street. The selling price, 17p for a 40-page tabloid, is also cheap, especially since 16 pages will be in colour.

Disclosure of what Shah intends to do is sending all kinds of tremors up and down Fleet Street and in union HQs. As Shah will be creating brand-new jobs (up to 800 altogether), the unions ought, in theory, to welcome his enterprise. But of course they rill do everything in their considerable power to stop him. Of £20 million he has so

far raised, £8 million is being organised by

the Hungarian International Bank. Brenda Dean, the new boss of Sogat, has already written to this bank asking that its support 'be withdrawn'. The Fleet Street newspap- er owners are terrified for two reasons.

First they calculate that Shah's breach of the closed shop arrangements for national

newspapers will have a knock-on effect the

moment his paper appears, and bring the whole of Fleet Street to a standstill.

Secondly, they have a hunch that Shah may well succeed. If that happens, all their costs are going to look totally uncompetitive, and they will have to introduce the new technology and de-manning in a hurry, with unforeseeable consequences. I cannot wait to see it happen, and wish Shah all the luck in the world.