Evening Standard: Analysis - Daily Mirror in decline
By David Rowan
IT is crunch time for the Daily Mirror. Having lost 10 per cent of its circulation in the past year, the biggest drop for any national daily, the paper's future within the Trinity Mirror group is this week looking more uncertain than ever. With editorial morale at a low, and another damaging price war in sight, City analysts are warning that Sly Bailey's promised "turnaround" strategy appears to be failing.
Is Bailey, as Trinity Mirror's chief executive, shrewdly trimming costs in order to offload Mirror Group Newspapers for the optimum price? Or, as disillusioned Mirror insiders are suggesting, does the former IPC magazine boss simply fail to understand newspapers?
The numbers tell a dismaying story of decline. In the year to December, the Daily Mirror's circulation dropped to a historic low of 1.7 million, a loss of 200,000 copies. The Sun lost fewer than three per cent of its sales, to finish the year at 3.2 million, albeit a quarter of those at cut-price.
Part of the Mirror's loss may be attributable to revulsion at the faked pictures of British soldiers "abusing" Iraqi prisoners, which cost Piers Morgan his editorship. Yet the falls have only accelerated since Richard Wallace took over in June - and now his 35p paper faces competition from a 15p Daily Star and a 20p or 30p Sun.
"Time is running out," warns Simon Baker, media analyst at SG Securities. "There's an enormous task ahead if Bailey is to deliver on the promised turnaround of the national papers' decline. The circulation falls we're seeing now are going to increase the pressure on the company to act, whether by breaking up Trinity Mirror, or some other strategy. Do they sell the nationals? Do they try again to reposition the Mirror for its umpteenth rebirth?"
Among editorial staff, a consensus is growing that management has abandoned any interest in making the Mirror succeed, and is now simply seeking to reduce costs for an inevitable sale of the three national titles - the Daily and Sunday Mirror and the People. This would leave Trinity Mirror to focus on its highly profitable regional papers.
Mirror journalists who spoke to the Standard on condition of anonymity questioned Bailey's commitment to the "seriously good popular journalism" which she promised to invest in after Morgan was removed. At the time, the paper lost specialist reporters, not to be replaced, as well as its colour magazines, M and The Look, and Morgan's imported columnists such as Christopher Hitchens and Jonathan Freedland. In their place, the Mirror boosted its celebrity coverage, launching a magazine based on the 3am spread. Now even that has closed.
"The paper's dying," according to one experienced Mirror journalist. "Morale in the newsroom has collapsed. They need to do something pretty quickly. There's so much damage being done that the paper might never recover." Bailey's only strategy, the journalist claims, is "simply to run it into the ground and sell it. They're just waiting for someone to come in at the right price. Sly Bailey's sole purpose in life is to show growth to her shareholders, and to do that in a declining market means hack-and-slash. She hasn't the faintest idea what the paper is meant to be. The result is to produce a worse version of The Sun and charging 5p more for it."
Trinity Mirror declined to offer a response from Bailey or any other executive.
A former senior editor at the Mirror, in regular touch with its journalists, says that Richard Wallace should not shoulder the blame. "Richard's a nice bloke, but these problems are greater than any individual can solve and he probably realises it too," the former staffer says. "Nobody knows what the paper is about any more."
Although popular, Wallace was an unexpected choice as editor. A day before his appointment, insiders understood that Phil Hall, the former Hello! editor, would be given the job. But a major complication was the role of Ellis Watson, the former Sun marketing boss who, as the newly promoted MD, would be the national papers' editorial as well as commercial supremo. Now that he had ultimate editorial power, journalists complained, he was using his "market-research dossier" to decide which stories to run.
"You've heard of papers edited by committee - well, now it's effectively edited by market research via a bloke with no experience of editing," the former senior editor says. "He'll decide if, say, an Ian Huntley story should be pulled because last time round a Huntley front page sold three per cent fewer copies than usual." Trinity Mirror's press office points out that Wallace still makes the editorial decisions.
So what went wrong? Bill Hagerty, former deputy editor of the Mirror and now editor of the British Journalism Review, dates the decline to David Montgomery's time running the Mirror Group after Robert Maxwell's death. The cost-cutting and redundancies "destroyed a lot of the paper's ethos", Hagerty claims. By the time the current management took over, journalists such as Paul Foot and Alastair Campbell had left. Cost-cutting, meanwhile, had become the norm. The only way to rescue the paper, Hagerty believes, is bigger editorial investment.
Trinity Mirror's response to its critics is to demand patience, claiming that the "true circulation picture" will emerge in the summer. It also points out that year-on-year comparisons are misleading, as far less money was spent on marketing in the more recent circulation period. "The metric we use to judge success is market share," a spokeswoman says. "And though the whole market is declining, the Daily Mirror's market share, at around 19.5 per cent, has not changed in the past six months." Under Wallace, the spokeswoman adds, "already the paper's brighter, more consistent, more balanced". The company insists there are "categorically no plans whatsoever to sell the national titles".
Still, the vultures are circling. Before Christmas, there were reports of a planned £2 billion offer for Trinity Mirror by CVC Capital, a private finance house. CVC firmly denied the bid, and some observers suspected the suggestion owed more to Trinity Mirror's internal needs: it coincided with a falling share price, which it served to boost.
But other prospective purchasers are rumoured. Axel Springer, the German media giant, is one name doing the rounds - that would certainly be payback for Morgan's "Achtung Surrender!" front page before England's Euro 96 clash with Germany. Springer has been looking to enter the British market, and failed in its bid for the Telegraph. Sources in the company, however, are playing down any interest.
Yet selling off the Mirror Group would not be an easy solution for Bailey. Its price would be artificially high because the national papers are bound in with the more attractive regional-newspaper business. And no venture capitalist wants to pay over the odds.
In the meantime, despite circulation challenges, its national papers continue to make a comfortable and rising profit for Trinity Mirror. And journalists, the company likes to point out, fail to understand that newspapers are not cultural icons to be protected, but hard-headed businesses.
(Evening Standard, January 19 2005)
IT is crunch time for the Daily Mirror. Having lost 10 per cent of its circulation in the past year, the biggest drop for any national daily, the paper's future within the Trinity Mirror group is this week looking more uncertain than ever. With editorial morale at a low, and another damaging price war in sight, City analysts are warning that Sly Bailey's promised "turnaround" strategy appears to be failing.
Is Bailey, as Trinity Mirror's chief executive, shrewdly trimming costs in order to offload Mirror Group Newspapers for the optimum price? Or, as disillusioned Mirror insiders are suggesting, does the former IPC magazine boss simply fail to understand newspapers?
The numbers tell a dismaying story of decline. In the year to December, the Daily Mirror's circulation dropped to a historic low of 1.7 million, a loss of 200,000 copies. The Sun lost fewer than three per cent of its sales, to finish the year at 3.2 million, albeit a quarter of those at cut-price.
Part of the Mirror's loss may be attributable to revulsion at the faked pictures of British soldiers "abusing" Iraqi prisoners, which cost Piers Morgan his editorship. Yet the falls have only accelerated since Richard Wallace took over in June - and now his 35p paper faces competition from a 15p Daily Star and a 20p or 30p Sun.
"Time is running out," warns Simon Baker, media analyst at SG Securities. "There's an enormous task ahead if Bailey is to deliver on the promised turnaround of the national papers' decline. The circulation falls we're seeing now are going to increase the pressure on the company to act, whether by breaking up Trinity Mirror, or some other strategy. Do they sell the nationals? Do they try again to reposition the Mirror for its umpteenth rebirth?"
Among editorial staff, a consensus is growing that management has abandoned any interest in making the Mirror succeed, and is now simply seeking to reduce costs for an inevitable sale of the three national titles - the Daily and Sunday Mirror and the People. This would leave Trinity Mirror to focus on its highly profitable regional papers.
Mirror journalists who spoke to the Standard on condition of anonymity questioned Bailey's commitment to the "seriously good popular journalism" which she promised to invest in after Morgan was removed. At the time, the paper lost specialist reporters, not to be replaced, as well as its colour magazines, M and The Look, and Morgan's imported columnists such as Christopher Hitchens and Jonathan Freedland. In their place, the Mirror boosted its celebrity coverage, launching a magazine based on the 3am spread. Now even that has closed.
"The paper's dying," according to one experienced Mirror journalist. "Morale in the newsroom has collapsed. They need to do something pretty quickly. There's so much damage being done that the paper might never recover." Bailey's only strategy, the journalist claims, is "simply to run it into the ground and sell it. They're just waiting for someone to come in at the right price. Sly Bailey's sole purpose in life is to show growth to her shareholders, and to do that in a declining market means hack-and-slash. She hasn't the faintest idea what the paper is meant to be. The result is to produce a worse version of The Sun and charging 5p more for it."
Trinity Mirror declined to offer a response from Bailey or any other executive.
A former senior editor at the Mirror, in regular touch with its journalists, says that Richard Wallace should not shoulder the blame. "Richard's a nice bloke, but these problems are greater than any individual can solve and he probably realises it too," the former staffer says. "Nobody knows what the paper is about any more."
Although popular, Wallace was an unexpected choice as editor. A day before his appointment, insiders understood that Phil Hall, the former Hello! editor, would be given the job. But a major complication was the role of Ellis Watson, the former Sun marketing boss who, as the newly promoted MD, would be the national papers' editorial as well as commercial supremo. Now that he had ultimate editorial power, journalists complained, he was using his "market-research dossier" to decide which stories to run.
"You've heard of papers edited by committee - well, now it's effectively edited by market research via a bloke with no experience of editing," the former senior editor says. "He'll decide if, say, an Ian Huntley story should be pulled because last time round a Huntley front page sold three per cent fewer copies than usual." Trinity Mirror's press office points out that Wallace still makes the editorial decisions.
So what went wrong? Bill Hagerty, former deputy editor of the Mirror and now editor of the British Journalism Review, dates the decline to David Montgomery's time running the Mirror Group after Robert Maxwell's death. The cost-cutting and redundancies "destroyed a lot of the paper's ethos", Hagerty claims. By the time the current management took over, journalists such as Paul Foot and Alastair Campbell had left. Cost-cutting, meanwhile, had become the norm. The only way to rescue the paper, Hagerty believes, is bigger editorial investment.
Trinity Mirror's response to its critics is to demand patience, claiming that the "true circulation picture" will emerge in the summer. It also points out that year-on-year comparisons are misleading, as far less money was spent on marketing in the more recent circulation period. "The metric we use to judge success is market share," a spokeswoman says. "And though the whole market is declining, the Daily Mirror's market share, at around 19.5 per cent, has not changed in the past six months." Under Wallace, the spokeswoman adds, "already the paper's brighter, more consistent, more balanced". The company insists there are "categorically no plans whatsoever to sell the national titles".
Still, the vultures are circling. Before Christmas, there were reports of a planned £2 billion offer for Trinity Mirror by CVC Capital, a private finance house. CVC firmly denied the bid, and some observers suspected the suggestion owed more to Trinity Mirror's internal needs: it coincided with a falling share price, which it served to boost.
But other prospective purchasers are rumoured. Axel Springer, the German media giant, is one name doing the rounds - that would certainly be payback for Morgan's "Achtung Surrender!" front page before England's Euro 96 clash with Germany. Springer has been looking to enter the British market, and failed in its bid for the Telegraph. Sources in the company, however, are playing down any interest.
Yet selling off the Mirror Group would not be an easy solution for Bailey. Its price would be artificially high because the national papers are bound in with the more attractive regional-newspaper business. And no venture capitalist wants to pay over the odds.
In the meantime, despite circulation challenges, its national papers continue to make a comfortable and rising profit for Trinity Mirror. And journalists, the company likes to point out, fail to understand that newspapers are not cultural icons to be protected, but hard-headed businesses.
(Evening Standard, January 19 2005)
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