Could they be sitting at the Herald’s top table?: (l-r)Only a fortnight ago a “For Sale” sign swung from the Sunday Herald’s masthead as SMG announced the sale of the title and its stable partners the Herald and Evening Times. When the deadline for indicative offers closes today there is likely to be a cluster of keen bidders vying to take over the titles.
Expected suitors Johnston Press, Scotsman Newspapers, Gannet (Newsquest), The Guardian Media Group, Trinity Mirror, Independent News and Media and Daily Mail and General Trust are all expected to be there. However, a bid by many of these parties may be complicated due to legislation laid out by the Fair Trading Act 1973, which was designed to prevent newspaper groups holding a monopoly on advertising and circulation. And, despite the new legislation that is currently being discussed to go into the new Communications Bill, the competition rules will still apply to this sale.
Andrew Flanagan, chief executive of SMG, has said that his three priorities in the three-month sale process are “price, speed and cleanness of transaction”. This means that he favours a sale that is unlikely to ruffle the feathers of the competition authorities.
It is thought, for the newspapers’ stability, that Flanagan would prefer a sale to a newspaper group rather than a financial buyer. But, if it is “speed” that Flanagan is after, or “price” that he craves and if the “cleanness of the transaction” is a bargaining point, then a venture capital firm – such as Candover, 3i, KKR or Cinven – would be the quickest and easiest route for both buyer and seller.
However, this route might be uncomfortable for the newspapers as it could mean that a further sale to a future owner may not be far off.
But still, as the book opens on who will be favourite to snap up the immodestly priced titles, it is the venture capitalists that are odds-on favourites to be successful in the bid.
Candover, one of the potential cash bidders, was reported last week to be building a local management team for the bid, with Ernest Petrie, the backer of the management buyout of the Wee County Press, and Chris Oakley, former MD of Regional Independent Newspapers, considered favourites to front the Candover bid. Meanwhile, rival 3i group is thought to be linking up with David Montgomery, former chief executive of the Mirror Group, in his third attempt at becoming a newspaper owner.
As the chase to the deadline looks to be hotting up, it got The Drum to thinking. Who would be the dream team in any bid to purchase the newspaper? Whose skills could it not go without? Whose silver-tongue would be too slick to refuse? Who would be on a Fantasy management team in a bid for the Herald?
So, we put that question to the Scottish media industry and conducted a straw poll to find out who are the individuals who this time next year could be heading the Herald.
A chairman needs to be a highly respected figure with gravitas and vast experience. In our poll one name came to the fore – Bert Hardy. The former chairman of the Barclay Brothers’ Press Holdings left North Bridge building in 1999, due to illness. But in September 2000 he returned to the media when he joined Accord Holdings as non-executive director. At the age of 74 he currently sits on the board of the Evening Standard and the Newspaper Marketing Association and has experience ranging from deputy chairman of Channel 4 to CEO of Associated Newspapers.
It would be shortsighted for anyone not to consider SMG’s current chief executive of publishing, Des Hudson, to continue in this position. A qualified solicitor, Hudson joined SMG as MD of publishing in 1998 after 11 years working in the financial sector, starting at Yorkshire Building Society in 1987. In 1992 he joined Britannia Building Society and by 1996 was managing director of Britannia Life. During his time in charge of SMG’s publishing interests he has launched the Sunday Herald, installed Mark Douglas-Home as the editor of the Herald, to great effect, revamped the Evening Times under editor Charles McGhee and also added specialist titles such as Boxing News and Classical Record Collector to SMG’s stable of magazine titles.
However, despite Hudson’s success, if a venture capital firm takes over they would have to consider putting their own man in charge. If that venture capital firm was Candover then Chris Oakley, former chief executive of Regional Independent Media, would no doubt be the man they want running the show. Oakley took over as chief executive at RIM in 1998 at the behest of Candover shortly after the VC had financed an MBO from United News & Media. Oakley was part of the management team that floated the Birmingham Post and Mail and later sold it to the Mirror Group, which renamed it Midland Independent Newspapers. It was at this point Oakley met Daily Record MD Mark Hollinshead.
Oakley remained part of the Candover set-up after the recent sale of the RIM titles earlier this year, a deal that netted the group more than £560m.
Another former national newspaper executive in the hunt for the Herald is former Mirror Group chief executive David Montgomery. After leaving the Mirror Group in 1998, when the Group merged with Trinity, Montgomery has since failed in his bid to buy Express Newspapers and the Belfast Newsletter, both with investment firm 3i’s funding. Now it is reported that he has linked up again with 3i to spearhead their bid for the titles. Montgomery is familiar with the Herald, as he sat on the board of the Herald’s former owner in which the Mirror Group was an investor during the 90s. During his time at the Mirror Montgomery picked up a reputation as a merciless cost-cutter, so his arrival at Renfield Street would no doubt cause concern for editorial and sales staff.
The list of names that were mentioned in regard to the managing director’s position was headed by Liam Kane. Perhaps mentioned more out of devilment, Kane has said that he does not intend to bid for the titles himself, but whether he could be part of a future management team is indeed a possibility.
Kane’s presence in Scottish publishing is legendary, not always for the right reasons. He was part of the MBO team which saw Outram sell the Herald then he moved to The Mirror Group as managing director. He left early in 1998 after a run-in with the chief executive over the replacement of Record editor Terry Quinn. He has been out of newspapers since.
An outside bet in the eyes of a number of media insiders for the job of chief executive is Scottish & Universal Newspapers’ managing director Alex Cargill. Renowned as a “solid operator” and “capable of doing the job” Cargill has been in newspapers since 1973, when he joined the Lennox Herald as advertising manager. From there he progressed to commercial manager and then to general manager. He took over as S&UN’s managing director in November 1998 when the company’s four regions, each under a different MD, were scrapped.
During his time in charge at S&UN he has developed a strong management team around him, who all know second best is not good enough for him. A staunchly loyal man, whether he would leave S&UN is another question entirely, but maybe the offer of such a position could be too tempting to turn down.
Another contender for the managing director’s seat could be Ailsa Crossley, formerly the deputy managing director at the Scotsman Publications. In fact, it is being speculated that Crossley is already part of a team bidding for the titles, possibly the 3i bid with Montgomery. Appointed by Scotsman managing director Steven Walker, when he took the MD’s reins in 1999, Crossley’s role was to manage the editorial offices and monitor costs. Things have certainly changed since her departure in 2001, but with a raft of management experience at the Daily Record and as the general manager at the Independent Crossley could well be up for a high-profile return to the newspaper industry.
Some of the names linked to this position obviously include SMG’s group finance director George Watt and The Scotsman Publications’ Gordon Affleck. Neil Stirling, husband of Ailsa Crossley and a former finance director with Highland Distillers, could be in the frame if she is part of the 3i bid team. He currently has no position. Watt took over at SMG after the departure of Gary Hughes, who left to join EMAP in September 2000. He has been with SMG since 1998 after a career in accountancy and time spent in the USA. He was previously group finance controller and treasurer at SMG and previously worked with KPMG audit and assurance service in the UK and USA.
After the role of managing director, the post of commercial director is amongst the most important hands-on roles at any newspaper group, particularly in these times when maximising revenue streams is the name of the game.
Earlier this year saw the shock decision by SMG executives to make former commercial director of publishing Shaun Bowron redundant. He has since taken over as group managing director at Real Radio and looks to be doing well in the role. But, with a strong newspaper heritage, and perhaps something to prove to the Scottish industry, he could look to resume the commercial director’s role and finish what he began.
Another name mentioned in our straw poll was that of Jim Chisholm, who held the same position at the Daily Record and Sunday Mail, until he left to join Bonnier and launch Scotland’s business daily Business am. Chisholm is a newspaper man at heart and has vast experience gained at titles such as the Newcastle Chronicle and through his involvement with the World Association of Newspapers. During his time at the Daily Record and Sunday Mail Chisholm was instrumental in the development of Trinity Mirror’s magazine business with the addition of Scottish Business Insider and First Press Publishing.
News International’s Elaine Ward-Fincham could be a contender for the commercial director’s post. She was at the Sunday Scot when it launched, but on its demise moved to The Forge shopping centre in a marketing capacity. Then she was appointed by the Daily Record in the sales and marketing department before making her move to News International Scotland, where she oversees the advertising and sales for the Scottish Sun, The Times, News of the World and Sunday Times Scotland.
News International’s general manager, Colin MacLatchie, topped the poll to be appointed circulation director. However, David Dixon, SMG’s current circulation director, also received a number of votes for being open and honest. MacLatchie was formerly circulation director at the Daily Record, but left to become a freelance circulation consultant. He joined News International around five years ago and has spearheaded the circulation war with his old employer the Daily Record.
Another potential bidder for this post is another former Daily Record and Sunday Mail circulation director, Steve MacLaughlin. MacLaughlin started his career in marketing and promotions at Radio Clyde, but worked his way through the company to the position of marketing director.
From there he joined the Daily Record and Sunday Mail and worked his way up to circulation director. During his time there he ran the most successful promotion ever at the Record with the Disney promotion. He left the Record to become managing director of Scottish Radio Holding’s Score Press division and was set to become managing director of Score Outdoor, but left the company to work with ad agency Coltas.
Gordon Santana over at the Scotsman Publications was another name that media commentators said could be part of a management team at the Herald. Santana joined the Scotsman from John Menzies in 2001. He joined the Scotsman at a difficult time, with circulation falling in face of increased competition and falling ad revenue, which meant that the Scotsman price cutting strategy had to be abandoned earlier than anticipated. Despite that, Santana has looked at ways to maximise circulation through readers’ offers and added value.
According to a number of media commentators, the new owners of the three titles may not have to look very far to find the right man for the job.
Ewan Colville, marketing director of SMG’s s1, was mentioned by a number of people, primarily for the way he has built the s1 internet brand over the last two years with a relatively small budget. Prior to working at SMG, Colville worked at Tennent’s and, were he to take on the marketing director’s role at the newspapers, he would be expected to shake the titles up a bit.
Likewise, another current figure at SMG who could be lined up for the role could be Malcolm MacMillan, who is currently client sales director at SMG TV Sales. MacMillan was previously marketing director within the newspaper division and is another much respected figure much like his former boss Shaun Bowron.
Another potential candidate for the marketing director’s role, according to our straw poll, could be Nicola Young, assistant MD at the Birmingham Post. Young has experience gained at the Daily Record and Sunday Mail and also spent a period at the Scotsman before returning to Trinity Mirror.
SMG already has a plethora of experienced senior advertising sales directors, managers and executives and the advertising director’s position is perhaps likely to create the biggest stir of them all. SMG’s current sales top dogs, sales director Paul Genassi and general ad manager Moira Reid both merited mention in the poll and are both respected by the media-buying sector.
However, the name at the top of the list for this position is Steven Tait, former commercial director at the Scotsman Publications. Tait’s resignation from the Scotsman Publications, and consequent departure from the newspaper industry altogether, in 2001, came as a surprise to most. He began his career at the Scotsman before moving to News International. He rejoined The Scotsman Publications in 1998 when Steven Walker took over as advertising director.
During his time at the Scotsman Publications he moved on to become advertising director, after Walker’s promotion to MD, and then on to commercial director and assistant managing director, a role which enabled him to spread his wings and look at other titles in the Scotsman’s stable, perhaps most notably the Sunday Business, which Tait did a lot of strategic work on. His departure came after a number of disagreements in direction, primarily with publisher Andrew Neil, and Tait left newspapers. He took up a role in business development at ad agency 1576, but that proved fruitless when the agency hit tough times, and he left to set up his own business in Edinburgh. Tait is perhaps ripe for a high-profile return.
Another could be the Daily Record and Sunday Mail’s recently appointed commercial director John Leslie. Leslie joined the Daily Record following the departure of former ad director Pat Moore. Leslie is vastly experienced after spending time at another huge regional newspaper title, the Belfast Telegraph. Prior to this Leslie spent 20 years at Caledonian Publishing on the Herald.
Business am’s MD and editor John Penman appears to be the favourite amongst Scottish media folk to take the mantle of editorial director, though few could doubt the credentials of SMG’s current crop of editors Andrew Jaspan, Mark Douglas Home and Charles McGhee.
Penman was previously deputy editor at the Daily Record and moved with Jim Chisholm to launch Business am. He has since taken on the additional role of managing director and appears to run a happy yet results-driven ship.
Other names put into the fray include two former Scotsman editors Tim Luckhurst and Alan Ruddoch, though whether either would want to get back into such a position is questionable. Another candidate, and one who might take on even more credence if Bert Hardy were to re-enter the fray, is former Sunday Express editor Sue Douglas. Douglas was in charge of editorial direction at the Scotsman prior to the appointment of John McGurk, but left the company in May 2001.