The press
Waiting for Santa
Paul Johnson
There are signs that Fleet Street may be entering a new period of major upsets, with titles and groups changing hands and mergers — and the new fashion of 'demergers' — looming. The reason could be not so much a feeling of desperation (there are always, of course, ample grounds for that in Fleet Steet) as a new bullishness. Christmas is near and that is part of it. But the feeling is that the recession is at last coming to an end, and that in any case the Tory Government must do a bit of gentle reflation in 1982. Even as it is, advertising is holding up remarkably well right across the media. Young & Rubican's media bulletin, Time and Space, reports that for the third quarter of 1981, the independent television companies increased revenue by a massive 25 per cent over last year. It was 36 per cent higher during September and October has established a new monthly record. Fleet Street is doing nicely too, and the argument goes that if money can be made even in the doldrums, what will it be like when the economy begins to expand again?
The mood is helped by complicated changes in the law both of employment and of company structures which will have the net effect of strengthening the hand of management against unreasonable unions. The mistake the press bosses have learnt to avoid is the folly of the Thomson Group during the long Times dispute, when one union was able to deprive the firm of production and revenue month after month, while management had to pay the wages of everyone else and the whole of the parent company's resources were in the pool. That will not happen again. As Rupert Murdoch's brisk handling of the Sunday Times machine-minders indicated this autumn, unions will be told increasingly that they risk striking themselves and their colleagues not only out of a job but out of redundancy payments.
Fleet Street, like other managements, would like Norman Tebbit's proposed union bill to include a clause enabling them to stop paying wages all round immediately a strike by one section of the labour force disrupts production. Newspapers are particularly vulnerable to this abuse, and a change in the law would help managements to stand up to the worst kind of blackmail. In the long run it could bring wages down to reasonable levels. Linotype men now earn between 000 and £600 a week, sometimes more, and Fleet Street earnings generally are more than £100 a week above the national average. No industry in the country needs a shift in the balance of legal power from unions to management more than Fleet Street, especially in the introduction of new technology and sensible manning-levels.
Even if Tebbit does not give managements the extra clause they want, Fleet Street will benefit from sections of the new proposals which allow employers to discriminate between trouble-making hardline strikers and the rest, and to sue for damages in the event of disruption arising from inter-union disputes. Important, too, are the changes in the 1981 Finance Act which make it easier to construct separate companies. A newspaper group can now be detached from its parent and made wholly dependent on its own earning capacity, reserves and assets (if any). Unions are then faced with the immediate prospect of liquidation with no pay-off if they press their demands beyond what the company can reasonably afford. Such a separate company is more viable because it can pursue a realistic wages and manning policy. Those who want to enter the newspaper field are more likely to buy it, so its value rises.
That, I imagine, is part of the thinking behind the Trafalgar House plan to 'demerge' its Express Newspaper group, which led to the abrupt departure of Jocelyn Stevens last week. As a separate company the group is more likely to prosper. Its chances are by no means bad. The merger of the Evening Standard and the News has not produced much of a paper, but it has at least staunched the appalling drain of running them separately.
Next year, of course, the group has to sustain the shock of competition from the new Mail on Sunday, aimed chiefly at the Sunday Express. But there is room for both, in my view, and the effect of competition will be to make the latter a better paper (the New Standard is a sad instance of what happens when there is none). All the same, it is going to take a lot of investment, and I can see the case for a takeover. A tidy new separate company will be far more saleable, either to the old enemy, Lord Rothermere, or the new one, Mr Stevens, or somebodY else.
That somebody else could be 'Tiny' Rowland, whose newspaper ambitions, suspect, are by no means satisfied. If he acquired a group, of course, his control of the Observer would become a public issue again, involving the Government and the Monopolies Commission, and that may explain the curious story in last Saturday's Guardian claiming that he might be selling it. There is, in short, a lot of speculation and rumour in the newspaper world at present. The impulse seems to be that there Is an interesting time coming in Fleet Street, and the moment to grab a piece of it is now.
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