Maxwell, The Outsider

by Tom Bower

  Initially, Maxwell's brief was that the newspaper operation would be a 'greenfield site', excluding not only the print unions but also the Mirror Group's management. His edict irritated the group's incumbents, especially his senior executives. 'Their constant criticism of us poisoned relations,' recalls one executive, 'and it got worse.' Gillespie became another casualty of compartmentalisation and of the confusion which surrounds many of Maxwell's ventures. The London Daily News was owned by Mirror Group Newspapers (MGN), which ultimately is owned by Pergamon. Gillespie was the publisher of the new paper and was therefore employed by MGN. Its printing was entrusted by MGN to BNPC, of which Gillespie was chief executive. But although Gillespie was simultaneously employed by MGN and BNPC and both companies were housed in the same building and were ultimately owned by the same man, Gillespie discovered that the relationship between the public and private companies was obscure, especially regarding the terms of the contract between MGN and BNPC. His efforts to establish the price BNPC would charge MGN for printing were unsuccessful and his requests to Maxwell were never comprehensively answered. Their relationship became strained, especially as the precise problems of managing a twenty-four-hour newspaper became apparent.

  Maxwell had embraced the notion of such a newspaper without understanding that the term was a misnomer. Its theoretical attraction was the guarantee that the newspaper would be on sale early in the morning, before the Standard, with a large section containing classified advertisements for cars, homes and jobs, and that the same advertisements but with different editorial copy would also be read in the evening. To achieve that required fast printing, efficient distribution throughout London, and a sales force to attract the advertising. Maxwell, in Gillespie's view, was impatient with the implementation of that detail. As the telephone calls about all his other interests cascaded into his office, he brusquely swept aside Gillespie's queries and explanations. To his irritated executives, it seemed that he liked the architect's colourful sketches but did not understand that to fit the complex jigsaw neatly together needed meticulous calculations. 'The unseen foundations were left in the air because they bored him,' says one of the newspaper's founders.' Since he refused to delegate and was rarely accessible, we never made decisions until it was too late.' Anxiety, about the delays and about Maxwell's indecision, grew. 'Gillespie was blamed for everything,' recalls an eyewitness, 'although it was Maxwell who was constantly changing his mind, possibly because he couldn't remember what he had previously decided. When he began to reverse his 'greenfield' policy by ordering Gillespie to consult Mirror executives ['We have all the expertise here,' said Maxwell], that threw everybody.' Gillespie reluctantly agreed to the changes, but on one issue, the title of the newspaper, he was unyielding.

  The market research agency had tested four possible titles: The Londoner, London Newsday, Newsday London and the London Daily News. Although the latter had been the working title, the researchers' reported that The Londoner evoked the most favourable reaction. Linklater insisted upon the London Daily News and was supported by Maxwell. Their choice might have been less controversial if Gillespie had not heard that Rothermere's managers were informally asking the Standard delivery drivers how much extra they would require for handling a second newspaper. To Gillespie that could only mean that Rothermere was considering the relaunch of his defunct Evening News, which would be a perfect spoiler against Maxwell. 'It was going to be a dirty war,' said Bert Hardy, one of Rothermere's senior executives, 'and we were going to meet Maxwell at every stage.'

  On Saturday 22 November 1986, Maxwell had summoned yet another all-day conference at Headington Hall to discuss the newspaper's progress. Although all the editorial and commercial executives were summoned for 10 a.m., they expected to wait as usual for at least two hours before Maxwell appeared. True to form, he was delayed arriving from Heathrow airport but on this occasion, before entering his home, he encountered Gillespie waiting in the drive. The Irishman, whose attitude was by then quite jaded, issued an ultimatum that unless the proprietor reconsidered the newspaper's title, he would resign. Maxwell was unmoved and Gillespie departed.

  Maxwell was unruffled when he greeted his remaining executives. 'I'll take over Gillespie's job,' he announced, and thereafter became more accessible. 'My problem now is that I can't get away from him long enough to shape the paper,' Linklater told his colleagues. Constant meetings were not a substitute for strategy and throughout those weeks what struck those incarcerated on the ninth floor was Maxwell's delight in his image as the skilled entrepreneur. 'Maxwell believes in the art of brutal buying,' observed one seasoned negotiator. 'A deal struck at the last minute, he thought, was sure to be the most profitable.' Deadline deals have their attractions for buying and selling, but they posed problems if hundreds of staff needed to be trained in the use of a computer system, if five editions of a newspaper were to be printed in five different locations every day and distributed throughout London, and if the paper needed a battleplan to fight for a place in a competitive and declining market place. Creating new consumer demand requires a peculiar intellectual skill which was not evident as the revised launch date of 10 February 1987 approached. Joe Haines probably understood Maxwell's nonchalance on such critical questions better than most: 'He has a touching faith in the printed word. He's one of the last men in the world who really believes in the power of the press.' Like many Haines misjudged Maxwell. The newspaper was just his latest toy.

  By mid-January another of Maxwell's commercial innovations had been discarded. Experts were required to 'paste up' the newspaper pages and Maxwell ordained that redundant members of the NGA in the Mirror Group should be hired. His 'greenfield site' ideal was further contaminated. But the potential advertisers liked the 'dummies' of the new paper and for the journalists working a regular sixteen-hour day the omens still seemed promising.

  Maureen Smith, one of London's more successful new band of hypists, was hired by Maxwell to organise a spectacular launch. Not unnaturally, since her new client thought big and regularly dispensed sums of money which resembled telephone numbers, she proposed a programme to match his ambitions. By chance, Smith discovered that the Albert Hall, which is normally booked for at least two years in advance, was free on the day prior to the launch. She found little difficulty in convincing Maxwell that the building would be an ideal venue for an unforgettable twenty-four-hour party to mirror the newspaper's novelty. Oysters and Guinness would be served to the newspaper's vendors in the morning, followed by a fashion show for the glitterati at lunchtime, a children's party in the afternoon, Tout Londres would be invited for a gala celebration in the evening and the 'young things' could dance through the night to receive the first edition in the morning. It would cost a quarter of a million pounds.

  Everything had been prepared when quite by chance, ten days before the party, Smith heard that the launch had once more been cancelled. The reason was that the NGA 'pasters' had still not signed a contract, but cynics joked that Maxwell just wanted an excuse to avoid paying a fortune for a party. In reality, his newspaper was beset by an avalanche of problems. He had still not contracted for the printing, the distribution was still not settled and the new computer system for setting the pages was still troublesome. By the third and final launch date, 24 February, little had improved and the essential launch party was quickly improvised.

  The organiser was Harvey Goldsmith: 'You want the biggest party London has ever seen? You've got it. You want VIPs? You've got them. You want a spectacular? Leave it to me.' The venue was the circulation department on the Mirror building's first floor which was gutted and reconstructed to resemble a fashionable nightclub. The centrepiece was an ice sculpture resembling the London Daily News masthead. Beneath stood a vast cake with the chef ready to inscribe in icing a facsimile of the first front page when it was agreed. Once again Tout Londres was invited, but the handful of celebrities who did come left before the appearance of the first edition, which had missed its deadlines. Among those who re
mained was a delegation from the Telegraph group of newspapers. Over the previous five months, Maxwell had been negotiating to print his afternoon editions on the Telegraph's new computer-fed printing presses in the converted London docks, but each time a contract was near to signature Maxwell began renegotiating. 'He always wanted more than his pound of flesh,' says one of those angered by his brinkmanship. By the night of the launch, there was a real possibility that the following afternoon's edition would not be printed. At the party, Maxwell was located by the delegation in a booth occupied by a fortune teller. 'Not the right place to discuss business,' he said jovially as he led his anxious guests to another part of the room where at last he signed. Most of the revellers around them were the worse for drink when, two hours after the deadline, the trumpets of four Life Guards heralded the birth. As the Guards slowly marched towards the centre of the room, the proprietor, clearly impatient with their melodramatic progress, gruffly pushed them aside and made his way to the dais, followed by an embarrassed-looking editor. As he made his speech, the Telegraph team hurried away, concerned about the need to hire and train the operators who would print the newspaper the following day and in the months ahead.

  No Londoner was unaware of the arrival. Maureen Smith's team had persuaded every television and radio producer that Maxwell's exclusive appearance on their show was a once-and-for-all privilege which only the foolhardy could forsake. Every chat show from breakfast time to the epilogue featured the smiling proprietor and occasionally his editor. Even to the casual viewer, they propounded different messages and cast different images. Those who did not watch or listen were not spared exposure to the announcement because every double-decker bus was covered with the slogan 'For the city which never sleeps, the paper that never stops'. Every publicity gimmick was tried and exploited with the exception of an irreverent proposal from somewhere in the Daily Mirror to launch a 'Win a Peerage' competition. The idea was understandably suffocated before it rose to the ninth floor for approval. Maxwell unveiled an unusual touch: '2,000 of the prettiest models will be walking around London looking for people holding the Standard and politely offer to exchange them for our paper. We'll then send them back to Bert Hardy.' Rothermere's agent was unmoved by the parvenu's tactics: 'No city in the world can support more than one evening paper and Maxwell will lose.' Twenty-five million pounds had been spent for Londoners to have the choice they had gradually rejected for twenty years, and to Maxwell's exclusive surprise their choice was trebled. As Gillespie had predicted, Rothermere, with a delicate preparation which Maxwell could only envy, launched his spoiler on the same day. The Evening News was reborn amid massive publicity, at lOp as opposed to the News's 20p, and the Standard's street vendors loyally agreed not to handle Maxwell's product. Rothermere's Standard, which had been substantially improved in the previous months, launched a 'Win a House' competition but majestically remained aloof. Those who could find the new London Daily News read a professional if rather worthy paper, which offered neither a substantial section of classified ads nor a good competition. In the streets, there was bemusement, but in the Mirror building there was panic.

  Maxwell's much vaunted notion of contracting out the printing had proved to be disastrous. Deadlines which were missed in the editorial office meant that the papers were late off the presses and arrived in central London too late to beat the Standard. Some of the Newsflow van drivers had collected their loads and, after carefully locking their vehicles, had headed for breakfast. No one had explained to the newly recruited employees that speed of delivery was essential. Even those few street vendors who would accept the papers were, like the newsagents and the readers, confused by the idea of a twenty-four-hour newspaper. How could the reader in the evening know that he was not buying the morning edition? How could the casual buyer distinguish between the London Daily News and the Evening News when even Maxwell, in television interviews, said, ‘I am very proud to have launched the Evening News.’ Rothermere's spoiler was causing havoc and piles of discarded copies of the London Daily News littered the streets and were piled high in the newsagents. The first day's circulation of 400,000 began plummeting.

  'We need more WOBs,' shouted Maxwell as he marched through the editorial offices one evening, suggesting remedies to improve sales. White headlines on black backgrounds was the latest advice he had heard from Mirror executives on how to improve the News's design. On his return journey, he called them 'BLOBs', but everyone knew that he meant 'WOBs' - he just has a problem of enunciating names correctly. Later he wanted the masthead bigger and bigger still, and then smaller but the headlines increased. 'We need more subheads,' he boomed, when he meant crossheads, 'to break up the pages.' Then later he suggested changing the colour of the paper to distinguish between editions and after discarding that idea warmed to the notion that the stories should be in 'bite-size chunks'. The 'McNugget idea', as it was dubbed, was another ruse to relieve the paper's dense feel by shortening the articles and using more pictures. But nothing seemed to halt the inexorable decline in sales. The substance was of a middle-class newspaper which described itself as 'independent' but urged its readers to vote Labour during the General Election trying to appeal to London's right-wing electorate without a sufficient dose of dazzling magic. During those first weeks, it was not necessarily a fatal condition but it needed careful corrective surgery. Linklater and his senior staff were soon immersed in constant meetings.

  Editorial changes were relatively easy to accomplish but the accumulated commercial handicaps were unmanageable. Bad distribution and late printing were still unresolved nightmares. There was an increasing gap where classified ads should have appeared. The massive publicity machine had fallen silent because no one had conceived a second stage for the launch strategy. The paper was losing half a million pounds every week. To rectify all those misjudgements required thought, time and discussion. Impulsively, soon after the launch, Maxwell had banged the table. 'I'm going to slash the price to 10p.' The universal reaction had been amazement. Every sinew of the professionals tensed as the arguments against were recited. The London Daily News would be competing with the Evening News instead of the Standard; the advertisers favoured an upmarket paper while the Evening News was so downmarket as to cause even the Sun editors to blush; the newsagents would not earn enough; and the loss of revenue would be excessive. Maxwell was unmoved. His grandfather's deals in Carpo-Ruthenia and his own deals in the late 1940s had all been won on undercutting the competitor. His chafing experience at the Scottish Daily News and the Mirror on the same issue had not altered his views. The price was cut, but in retaliation, the Evening News price was reduced to 5p and everyone was confused except Lord Rothermere. Sales of the London Daily News fell faster and further while the Standard's increased. One further attempt to halt the haemorrhage by purchasing the Today newspaper and its presses from Tiny

  Rowland failed when Murdoch once again pipped his old competitor at the post. Maxwell's attempt to buy the loss-making tabloid confirmed that his repeated flourishes about BNPC's rosy future in supplying contract printing facilities for other national newspapers were illusory. By July, the economics were firmly against continuing the London Daily News, although the price was once again 20p. The newspaper was barely selling 100,000 copies and was firmly in a rut.

  On 18 July Linklater presented to Maxwell his survival plan - a thick volume which had taken two weeks to compile. Linklater, who was admired by his staff, nervously awaited Maxwell's reaction. The wall-to-wall meetings had taken a heavy toll and some of those surrounding Maxwell had barely hidden their ill-will. Five days later, he summoned Linklater for the denouement. Using his favoured military analogies, Maxwell's opening remarks, spoken with unusual calm, were unequivocal: 'I can't fight on two fronts, nor can I keep on pissing in the sand. The paper will have to close.' Further discussion was pointless and there would be no post-mortems. He personally told the staff at 12.15 the following day, Friday 24 July. 'No one thought it would go,' said Linklater, affected b
y the emotion of the moment. 'It was like a death in the family.' But about Maxwell he had few harsh words: 'He's an attractive man. A true human being.' Rothermere presented each of his staff with a bottle of champagne.

  There are not many who can lose £50 million and a similar amount of prestige without feeling some hurt. The successful launch of the Independent newspaper had proved that new papers were not a foolhardy venture. But none of those around Maxwell would dare to confront their master with the truth: that his dream had died because of its parentage, and the same pedigree had borne other disappointments that summer.

  On 24 May, Maxwell announced a $2 billion bid for Harcourt Brace Jovanovich, an American educational publisher which had diversified into theme-park entertainments in Florida. The offer, which was in cash, valued Harcourt's shares (which had been trading at below $30) at $44 each. If Maxwell were successful, he would at one stroke achieve the $3 billion status he so earnestly desired. Even if he failed, the financial community would be staggered that Rothschilds had been able to collect that huge amount of money in Maxwell's name. His credit seemed unassailable, except to William Jovanovich, Harcourt's sixty-seven-year-old chairman, whose response to the bid was of a style which Maxwell uncomfortably recognised. 'The sudden, unsolicited and hostile offer', said the American, 'is preposterous both as to intent and value.' He continued in a vein which caused Maxwell to reflect on his failure to bury the old skeletons. 'Mr Maxwell's dealings since he emerged from the mists of Ruthenia after World War Two have not always favoured shareholders - as Mr Sol [sic] Steinberg can attest.' A few days later, Jovanovich issued another vitriolic statement declaring that Maxwell was 'unfit to control' America's largest textbook publishers because he was not only a socialist with good connections in eastern Europe but was also tainted by 'hidden' sources of income. All the past vices had been resurrected. 'Mr Maxwell has money, but not enough. He has ambition but no standing. He ought to be sent packing to Liechtenstein.' Money, even billions, was not enough, Maxwell realised, to remove the stains. On 27 July, he backed off. It was the latest failure echoing another failed bid the previous year for Scientific American, whose owners favoured a German bid, although Maxwell had offered more money, and repeated months later when Elsevier of Holland, the world's largest scientific publisher, also shunned his advances, albeit with less public malice.*