Maxwell, The Outsider

by Tom Bower

  Beaming, Maxwell announced on 20 November 1985 that he had rented one channel which "would reach 230 million viewers' and anticipated winning the competition for an audience against Murdoch. Berlusconi and Seydoux had signed an agreement for the second channel. Three weeks later the deal began to sour.

  Government officials criticised the Frs60 million annual rent which Pomonti had charged Maxwell as insufficient and a political row erupted about government subsidies. The agreements were renegotiated and Maxwell found himself, somewhat disagreeably, as part of a consortium whose contracts were hastily ratified just days before the election. But the effort was wasted. As the socialists feared, Jacques Chirac became prime minister and repudiated the agreements. Financially, Maxwell suffered minimal losses but his exposure in France was profitable. For the first time he had been firmly associated in the media with the world of satellites and television. France, he realised, although still a sideshow in his erratic plans, offered an important route towards fulfilling the 'Communications' sobriquet in his corporation's title. For family reasons, it was convenient that his efforts would be spearheaded formally by his son Ian, then thirty years old, who had a home in Paris. Together they could create a new virginity for Maxwell,' observed one cynic.

  During the summer of 1986, Maxwell assiduously cultivated new relationships while bombarding Francois Leotard, the new minister of culture and communications, with demands to explain his repudiation of the satellite contract. At first Leotard ignored his protests but in November Maxwell's persistence was rewarded. The minister had invited the three friendly press groups, Hachette, Havas and Hersant, to consider applying for the same satellite channels and he leaked that Maxwell had been also invited to participate. It was a moment of success. Maxwell had established himself as the only English-speaking press magnate in France. By then, Ian had also cultivated Colliard in the Elysee and heard of a proposition which could help MCC's fortunes.

  Gaston Defferre, the legendary resistance leader, former minister of interior, mayor of Marseilles and leading socialist, had died in May 1986. Amongst his estate was the Agence Centrale de Presse (ACP) which, although ranking as France's second largest wire service for newspapers, was dwarfed by the Agence France Presse (AFP). ACP had been losing approximately Frsl million per month when, in October 1986, it had been transferred to a liquidator. The few who were interested in rescuing the agency presented survival plans based upon wholesale redundancies and ACP's absorption into their own agencies. That solution upset a few sentimentalists at the Elys6e who were anxious to preserve any monument created by their old comrade and friend. Since Maxwell was the only socialist newspaper owner known to the Elys6e, Jean-Claude Colliard raised the prospect of its purchase. At Frs20 million Maxwell judged that it was a cheap investment to win the president's gratitude and an established presence in France.

  In January 1987, Ian Maxwell was officially presented as ACP's new chief executive and the saviour of a French institution. The communique* stressed that the new owner was 'French by my mother, French by birth and French by choice'. ACP's offices in the rue de Sentier, a narrow, pot-holed road in Paris's garment district, became Maxwell's French headquarters. It was an unglamorous location but among its staff was Michel Burton who would be the Maxwell's eager and initial guide through the Elysee.

  'I'm here to solve your problems,' Maxwell told Mitterrand's beleaguered staff after rescuing ACP. Among the president's needs was money for the bicentenary celebration for the French Revolution. 'We had no money,' recalls a presidential aide, 'and Maxwell just offered his wallet.' 'The Revolution's ideals are the most important in my life,' proclaimed Maxwell with apparent sincerity and proclaimed that he would commission the storage on video-discs of the one million original documents of the French Revolution stored at the National Library for worldwide distribution by Pergamon. It would feature as one of two thousand projects associated with the celebrations, mostly financed by discreet donations.

  Naturally, the announcement, which also mentioned Maxwell's interest in France's satellite, raised little interest beyond the media world but it did register with Patrick Le Lay, the vice president of the giant Bouygues construction group. As head of diversification at Bouygues, Le Lay had developed Bouygues's interests in batteries, water and tourism. At that moment, Le Lay, a forty-five-year-old graduate of the Ecole Superieure de Travaux Publiques et Sciences-Politiques, whose metal-rimmed glasses accurately reflected the persona of a cold, efficient businessman, was planning his corporation's application to buy a stake in TF1, French television's Channel One, which the Chirac government had announced in May 1986 would be privatised. Although Francois Bouygues, the sixty-seven-year-old autocratic founder and chairman of the Frs8 billion group, was keen to diversify into the media, Le Lay thought that even 'Mr Cement' would flinch when the government announced on 5 February 1987 that the price was three billion francs for 50 per cent of the shares and there would be a 50 per cent premium on the price of shares bought by the winning consortium. The bid would cost one billion francs more than the Frs500 million Bouygues had expected to pay for a 25 per cent stake. ‘I asked Francois if he was still interested,' recalls Le Lay, 'and to my surprise he said we should stay in the race.' Others in his consortium were less convinced that TF1 was still a profitable investment and withdrew. 'We were alone and I needed new partners, fast,' recalls Le Lay. Since 'The Three H's' were already excluded as potential partners because they were forming their own consortia, Le Lay needed by default to look to foreigners for support. 'I also needed someone with media experience. Two names sprang to mind - Murdoch and Maxwell. Of course I didn't know either of them.'

  In rapid succession on the morning of 9 February, Le Lay personally phoned the rivals in London. The answer from News International was curt: Murdoch was unavailable to take the call. The second call produced the publisher himself on the line. His response was spontaneous: 'Come to London immediately. Have you got a plane? Fly to Biggin Hill and my helicopter will bring you to my office in London.' No executive in the world's largest construction corporation had ever matched the pace which the studious-looking Le Lay was set during the ensuing nine hours. 'It was a marvellous sunny day and Maxwell's helicopter flew along the Thames, over the Tower of London and landed in the middle of the City, on the roof of Maxwell's headquarters. Of course I was impressed.' Le Lay was met by Maxwell, Ian and two lawyers. The tentative fifteen-minute meeting was extended through lunch and, as a sign of its importance, was uninterrupted by any phone calls, except one. Maxwell had never heard of Bouygues and in front of Le Lay telephoned Sir Nigel Broakes, the chairman of Trafalgar House, a British construction company about one third of the size of Bouygues. 'Maxwell asked for a reference. Then he told me to wait in a small office outside.' Thirty minutes later Le Lay was summoned: ‘I’ll take twenty per cent.'

  'We're only offering you ten per cent,' countered Le Lay who finally agreed to 15 per cent to secure the deal but knew that it would have to be reduced. 'Come and meet Francois Bouygues,' said Le Lay as they shook hands. ‘I’ll come tomorrow,' replied his new partner. 'I understand he has a pretty daughter. Make sure she's there too.'

  The lunch in Paris the following day was clearly memorable for Maxwell. Whereas in London he was being assailed for his unsuitability as a would-be media mogul because the launch of the London Daily News had been postponed for the second time and the Daily Mirror's circulation continued to plummet, in Paris he was regaled by 'Mr Cement' as a world star. Unhesitatingly, Maxwell emphasised to Bouygues his 'considerable international media expertise', since he had already correctly assessed that Bouygues's unsolicited invitation was motivated not only by the Frenchman's need for extra cash but also because no one else in his consortium had any connection with either television or daily newspapers. Bouygues's application needed credibility and without Maxwell the prospects of success were reduced, not least because Bouygues's foremost rival was a consortium including the Hachette publishing company and Le Monde. At th
at moment, the Hachette consortium, led by Jean-Luc Lagardere, was the favourite. The conservative prime minister, Jacques Chirac, had even been overheard quipping to his friend: 'So Jean-Luc, you must be a happy man.' As the experts would later comment, it was Hachette's race to Jose.

  Whether Maxwell correctly assessed the personality and character of his partner-to-be at that lunch is unlikely. Although he would later say that 'We have similar personalities - he is energetic and enterprising like me', Maxwell was unaccustomed to dealing with builders, was inevitably excited by his own self-importance, and was insensitive to the nuances of dealing with a man whose wily, aggressive reputation was second only to his own. That imperviousness was augmented because they spoke in French and Maxwell deluded himself that as a much-publicised polyglot he could sense the meaning in Bouygues's words. It was a flaw which would recur many times. Accordingly, Maxwell left the celebration convinced of receiving assurances that he, 'as the expert', would wield significant responsibilities in the management of the TV station, if the Bouygues consortium won. Similarly, when Bouygues bade the foreigner farewell, he was satisfied that, having lured both money and status to his side, he would retain full management control, as was customary in all his investments. Bouygues's only concession had been to allow Maxwell a 12.5 per cent stake. Membership would cost Maxwell approximately Frs750 million in one lump sum. The potential for disagreements would always exist since both men boasted the reputation that their signature on a contract just excluded the competition but did not bar aggressive renegotiations. Yet, with the deadline for the public hearings on 3 April so close, it was not the moment for any misgivings.

  Maxwell's role during the following seven weeks has been variously described as 'crucial' and 'negative'. Le Lay insists: 'Maxwell played no part in writing the proposal which I submitted to the Commission', the CNCL. His reasons are dismissive: 'Maxwell is a foreigner and his past activities created suspicions.' But the proposal was only one ingredient in the campaign to win the licence. Lobbying the thirteen members of the CNCL was equally important. Hachette's success seemed a foregone assumption if only because ten CNCL members were Chirac appointees, inevitably sympathetic to Lagardere. Yet during those last four weeks, as the Bouygues consortium systematically 'marched through the CNCL's rue Jacob offices like an army', visiting each of the thirteen members at least twice, Bertrand Labrusse, one of the two socialist appointees, became convinced that Maxwell's presence was 'decisive'.

  Maxwell's personal tactics to sway the pro-Hachette members were vintage and masterly. During his expeditions to France, Maxwell had rapidly absorbed the common complaint that, compared to Britain and America, the French media were primitive and as some insisted, 'in the midst of a crisis'. Its television service, cocooned from L’invasion américaine, was unsophisticated and unimaginative. The producers, encrusted by the traditions of government service, had failed to innovate. Maxwell therefore presented himself to the CNCL as the harbinger of the 'best of British' and the 'guarantee of media experience'. Labrusse was not the only member of the CNCL to be swayed by Maxwell's pitch: 'He told us about his interests in TV, cable and satellite and we were very impressed.' No one, it seems, was sufficiently troubled to investigate the reality of those claims and to discover that Maxwell's television investments were either loss-makers or, like Central TV, were strictly financial stakes which explicitly denied him any participation in managing the TV station. In fact, none of the CNCL committee inquired whether Maxwell had ever commissioned or produced a television programme, whether he had ever mastered the art of scheduling broadcasts or whether he actually understood the peculiarity of TV management where so much depends upon delegation to encourage originality - the very antithesis of all Maxwell's operations. Any doubts were swept aside by Maxwell's leviathan presence and his self-salesmanship.

  His parallel platform, his personal antecedents, was also played, according to one recipient, 'very astutely'. He was, he told each of the Commission members with charm and a fixed gaze, married to a French woman, the father of French children, had fought a glorious war and believed passionately in the European ideal. 'The epicentre of European television', he ingratiatingly told those who wanted to believe fantasies, 'lies in France.' To Labrusse and Catherine Tasca, he confided, ‘I am a man of the left.' To the right-wing members he hinted, ‘I’m neutral and sympathise with the Chirac government.'

  Maxwell's certainty of his own importance was not shared by Bouygues. In the builder's view, although Maxwell had some value, it was he who had constructed a coalition, including arbiters of culture and prominent freemasons, which delicately reflected approval from the hidden levers of influence. Bouygues even built bridges to the president by visiting his office to 'inform us of his candidature. His brave gesture', recalls a presidential aide, 'despite the adverse political climate at the time was appreciated.' But above all, Bouygues, whose quintessential talent was in tendering for projects and lobbying for their approval, understood precisely the mechanics to organise the bid. 'At six p.m., at the end of every working day,' recalls Jacques Duquesnes, the editor of Le Point magazine, 'we met at Bouygues's offices on the Champs Elysees to discuss progress and assign tasks for the next day.' On the advice of Bernard Tapie, a wheeler-dealer who invested in bankrupt companies and was offering to buy a 1.66 per cent stake in TF1, all the consortium members except Maxwell were also coached for three days by 'Newsplus' on the technique of public speaking. Maxwell never attended those meetings except the day he arrived with an army of lawyers and advisers to sign the agreement formally. 'We were all overwhelmed,' recalls one of those present. 'He not only took over Bouygues's offices, but a whole corridor at the Plaza-Athenee hotel. To our minds, any man who could afford all that was amazingly rich and very powerful.' It was an impression which Maxwell would not want to ruffle. On the contrary, it was reinforced when, after signing, the former captain proclaimed with a theatrical flourish, 'You are our major Monsieur Bouygues. We will follow you.' 'Francois believed Maxwell,' said Le Lay eight months later.

  By the morning of 3 April, when the CNCL opened its hearings, the odds against Bouygues had narrowed. The session, broadcast on television, was devoted to Lagardere who, despite losing partners in embarrassing circumstances, rested on his laurels. In a woolly address, Lagardere suggested a willingness to promise anything the commission required. Even his star, Christine Ockrent, an attractive and intelligent journalist -'the best anchorman in TV', according to admirers - displayed a weakness common to most television presenters: excessive self-confidence fed by fame.

  In the afternoon session, crisp and businesslike, Francois Bouygues focused on promises of huge investments in future productions, the financing of independent producers and turning TF1 into an international production group based in specially constructed headquarters.

  Bouygues's introduction of Maxwell was markedly hyped to emphasise that television was a multinational business which needed to be depoliticised and ideologically independent. Maxwell's scientific publishing group, he claimed, 'is the largest in the world'. In fact it ranked number three. The Daily Mirror, said Bouygues, 'one of a dozen Maxwell newspapers' prints 3.5 million copies a day. In fact the Mirror Group embraces six newspapers and the Mirror was selling 2.9 million. Finally, Bouygues stated that Maxwell was 'an important figure in British television' which by any definition was an exaggeration. But the overstatements confirmed Maxwell's importance to Bouygues's chances of success.

  Maxwell's personal and noticeably short contribution, which had become his set piece for all future interviews, repeated that he was 'the father of seven children, all born at Maisons-Laffitte', Pergamon's reproduction of one million pages of revolutionary documents marked his commitment to 'human rights', and concluded with a tickle of France's vanity. With his participation, he claimed, French television would 'play an important role in Europe and the world'.

  That night, Lagardere suspected defeat. Unlike Bouygues, he lamented, his team had not resorted to circ
us training: 'That was a great pity,' commented one council member.

  The commission announced Bouygues's victory the following day - by eight votes to four. 'The takeover of TF1 is my greatest professional joy,' commented Bouygues with an unusual hint of modesty when he arrived that night with Le Lay at TF1's headquarters in the Cognac Jay. The announcement had been unexpectedly early and there was no time to summon Maxwell.

  'Anyway,' recalls Le Lay, 'it was a Bouygues victory.' At that moment, Maxwell believed that he was on the verge of becoming a major player in France and did not lament his absence.

  In October 1987, soon after Maxwell had begun negotiating to buy ACP, Michel Burton who was employed at ACP told his future employer that Anne-Marie Laffont-Leenhardt, a substantial but minority shareholder in the profitable Provencal newspaper group, had been anxious for three years to sell her shares.

  The Provencal group had been taken over in 1945 by Gaston Defferre, a leader of the French resistance, under a liberation law which sequestrated newspapers from proprietors who had collaborated. Instead of retaining total control, Defferre, who became an important politician, had divided the shares among fifteen fellow resistance fighters. When he died in May 1986, control was in the hands of three women including his widow Edmonde Charles-Roux and Anne-Marie Laffont.

  Unlike other French newspapers, the Provencal group had enjoyed exemplary management under Defferre. As early as 1974, with complete union agreement, the group's presses had been modernised, the latest computer technology installed and restrictive labour practices abandoned. The group still employed 8000 people who produced 350,000 papers a day and sales were expanding. But the cost had been enormous. Defferre's death had exposed the group's huge debts and the need for professional financial management.