by Tom Bower
Fresh from triumphantly reducing staff and costs at the Daily Mirror in London, Maxwell had already noticed that the French newspaper industry was also ripe for his methods of rationalisation. Most French newspapers produced negligible profits and the proprietors, fragmented and old, were at the mercy of the print unions and an inefficient distribution network. Increasingly, the historic proprietors were obliged to sell. If Maxwell could secure the Provencal group as a first base, it would be an ideal jewel in his crown.
Laffont's search for a purchaser had been hampered by three factors. Firstly, under the company's articles, none of the shareholders could sell their shares without the approval of a majority of the managing board; secondly, while Defferre lived, no one on principle would be deemed acceptable; thirdly, after Defferre's death, the three women shareholders, although united by history, were irreconcilably divided by personality and character. 'The only chemistry between them was hostile,' said one of the newspaper's managers. 'They simply never spoke to one another.' Once Defferre died, the principal obstacle had been removed, especially since Christian de Barberin, the chairman of the board, business manager of the group and Defferre's stepson, told the three women that the group desperately needed new funds to survive. Neither Charles-Roux nor Cordesse paid any attention until Laffont proposed Maxwell as an acceptable purchaser. Maxwell had wooed Laffont. He extolled his socialism; he mentioned that their mutual friends at the Elysee had suggested his purchase of ACP and now 'supported' his ownership of the Provencal group; and he produced the notable discovery that the Laffonts were distantly related to Betty Maxwell's family.
In November 1986, Laffont and de Barberin met Maxwell in Paris. Flaunting wealth might be antisocial in France but Maxwell had discovered that nevertheless it paid handsome dividends. Like so many other French men and women over the following months, Laffont and de Barberin were overwhelmed by the helicopters, private jets and apparently unlimited finances. 'He is attractive and so rich. So very, very rich,' de Barberin reported to the two other shareholders with the news that Laffont wanted their approval for the sale.
Defferre's widow, Edmonde Charles-Roux, the largest single shareholder, was Maxwell's next target and fortunately was inclined to support his bid. The daughter of a former ambassador to Czechoslovakia, Charles-Roux had spent seven years of her childhood in Prague and later returned to live for another seven years in the country which she affectionately describes as, 'like my native land. I am very pro-Czech and very pro-Semitic.' Charles-Roux boasts two prides: her pedigree as 'one of the greatest left-wing families of France'; and secondly, as 'a daughter of Marseilles - an old city, older than Paris; very democratic but also very touchy.' Charles-Roux is also a professional journalist who edited the French edition of Vogue for ten years and won the Prix Goncourt which, while impressive for most mortals, would not have caused Maxwell to revise his initial hunch that winning her approval was a formality.
Maxwell adopted his classic style of seduction. A telephone call to Marseilles with an invitation to lunch. Then a very slight pause and, ‘I’ll send my jet to pick you up'. On landing at a small airfield near Oxford, even Charles-Roux was impressed by 'a superb red Rolls Royce which drove up to the stairs and whisked me away to lunch at Headington Hall'. If Charles-Roux had expected an intimate, working meal, she was to be disappointed. Nearly thirty people sat around Maxwell's table in the ornate dining room. Maxwell was holding court to a collection of international businessmen, relating one of his set pieces. At that moment it was his wartime experiences. Nevertheless, Charles-Roux felt instinctively attracted to the former peasant boy from Carpo-Ruthenia - 'where I had spent a lot of time' - and towards Betty because 'I have strong bonds with the Protestant milieu in the south'. The prize seemed Maxwell's for the asking.
But instead Charles-Roux became irritated. ‘I thought that he would talk to me about mamtaining the newspapers' traditions, guaranteeing the workers' prospects, and of Marseilles. Instead he said nothing of substance.' Charles-Roux's litmus test for judging Maxwell's acceptability would be his nominees to become the group's director. She had expected Maxwell to propose names of eminent polytechniciens or normaliens. However, Maxwell confirmed there was just one candidate: his son Ian. Charles-Roux's reaction was emphatic: 'No twenty-four-year-old can manage that business.' Ian was then nearly thirty-one.
Unanimously, all those who had met Ian in Paris agreed that he was intelligent and charming. Gracefully yet assiduously, he had cultivated those relationships in France which could benefit his father's business. Yet few in France believed that he was a leader of men, a view which is enhanced by those who can recall the image of the father's treatment of his sibling. While lobbying the CNCL, Ian's task was to respond promptly to his father's aside, 'What's the word in French I'm looking for?' In the ACP office, the erstwhile chief executive became the barman when the father snapped as he walked into the door: 'Open a bottle of champagne!' In London, he invariably became the messenger boy. 'If Maxwell treats his senior representative in France as a boy, then we must assume the truth of what we see,' was a common complaint from those who negotiated with Maxwell.
Whatever Charles-Roux's reservations when she left Oxford, she invited Ian to lunch in Paris on 12 March 1987. The purpose was to introduce Antoine Cordesse whose elderly mother owned the third stake in the newspaper group. Cordesse, an unremarkable inheritor of Defferre's creation, had joined the group in 1978 after an unsuccessful career as a government researcher. He epitomised an unforeseen problem. In some aspects, the Marseillais have more in common with Naples than Paris: their secrecy, suspicions and caution are difficult to overcome but that was lan's task at Charles-Roux's lunch. Ian failed although Cordesse now claims that he arrived in Paris outrightly opposed to any sale to Maxwell. In theory, Cordesse's veto was not fatal since Charles-Roux and Laffont combined still wielded a majority but Charles-Roux's own doubts were increasing and Maxwell's offers had propelled her to accept de Barberin's argument that they needed to sell their shares. Maxwell's offer had succeeded only in galvanising their search for rival buyers.
On 15 April, unaware of the uncertainties, Maxwell was preparing for a glittering celebration. That evening, at Les Pyramides in Port-Marly, Hervé Bourges, the outgoing head of TF1, had organised a massive party which would combine a vulgar display of the victors' wealth with garish homage to his deposed regime. Watched by the guests, Maxwell arrived by helicopter and sat at the principal table with his friend Francois Bouygues. His neighbour was André Santini, a heavy Corsican who was then minister of communications. 'It was', he recalls, 'a club of elephants', referring to everyone's girth. Santini also noticed that Maxwell 'knew everyone', an observation by a government minister which was useful for Maxwell since he was keen to be accepted as an insider in the tight circle which governs France. Santini would next see Maxwell at Edgar Faure's funeral in March 1988. To his surprise Maxwell was standing at the front of the congregation, in the midst of government ministers. Having worked through the celebrities at Les Pyramides, Maxwell lifted off, looking forward to the following day.
At 3 p.m., TF1's new board assembled for their first meeting in studio six at Cognac Jay. Bouygues was appointed president, Le Lay the vice president and Maxwell, director general. Immediately afterwards, amid showbiz razzmatazz, Bouygues and Maxwell smilingly handed over their cheque for Frs3 billion to Edouard Balladur, the minister of finance, in his baroque office on the rue de Rivoli. After more self-congratulatory speeches, the victors dispersed. Just before the ceremony, Bouygues had ordered his bank to delay payment for one day - to earn extra interest. Four weeks later, the station was reeling amid rumour, crisis and resignations.
The cause of dissatisfaction was Francois Bouygues's decision to manage his new asset directly and fire some senior executives. Their noisy departure coincided with the resignation of a clutch of stars lured to a rival channel by inflated salaries who were suddenly dissatisfied by the new 'dictatorial style' and 'incoherent strategy' of an
entrepreneur whose construction company glorified the cult of group loyalty, requiring its employees to wear orange 'Ordre des Minoranges' labels which proclaimed 'I belong to Bouygues'. In Cognac Jay they wore 'TF1' labels. Adopting the Japanese shogun mentality might appeal to builders but was hardly attractive to supposedly creative individuals. Fair-minded observers would attribute the troubles as the inevitable consequence of dramatic change. Others thought their fears were confirmed by Le Lay's flash confession when explaining the motives for his investment: 'Bouygues became interested in television when he realised that it was just another service industry. We already install electric cables so why shouldn't we use the cable to transmit images. That's what they're made for.' Le Lay's insensitivity did not trouble Maxwell but his apparent inability to influence the management incensed him.
Maxwell had found himself in a peculiar position. Whereas Bouygues's investment was financed with his own cash, Maxwell had borrowed most of the Frs750 million. To break even, he needed to earn annually about Frs 100 million to repay the interest and earn another 15 per cent or FrsllO million to justify the investment. It required TF1's management to generate profits immediately: 'Maxwell felt that his presence had won the bid so he was owed equal rights,' recalls one of his aides. Soon after they had won the bid, Maxwell and Bouygues had agreed that they would speak daily at 6 p.m. regardless of where they found themselves in the world and meet every Friday in Paris for a 'Council of War'. Partly as a safeguard to protect his interest and partly because he believed that his expertise was invaluable, Maxwell also insisted, and Bouygues agreed, that Ian Maxwell should be appointed as head of the new 'International Division', responsible for buying and selling programmes. lan's status remained a personal matter between the Maxwells until the son arrived at TF1's headquarters at Cognac Jay. Then his status became a reflection of his father. According to some board members, Robert Maxwell was furious about Ian's treatment by Le Lay: 'He didn't have a proper office or an adequate car.' Le Lay denies any knowledge of lan's complaints: 'I was desperately trying to reorganise and save the company. Ian was never there.'
Even the most experienced television executive would have found the challenge daunting and, whatever his talents, Le Lay was a novice at TF1. Early projections suggested that there might be no earnings for at least one year. The cause was certainly not TF1's failure to attract an audience which was running at an impressive minimum 40 per cent. Capitalising on that dominance depended upon charging the highest rates for advertising, reducing production and administrative costs and selling TF1's programmes around the world. Among the obstacles were the restrictions on advertising; the limitation on the numbers of cinema films which could be broadcast; and the stipulation that 50 per cent of the programmes be produced in Francophone nations. International sales and co-productions were vital for profits but Ian was handicapped. 'The Maxwells knew nothing about television,' says Jacques Pomonti. 'They didn't understand how programmes were commissioned, made or sold. They thought it's just like newspapers and that was their great mistake.' Pomonti could accurately add that Robert Maxwell did not actually watch television, yet claimed with authority that universally 'audiences are bored'.
Le Lay was also an apprentice in television but he was unwilling to allow Ian the same privilege. To protect Bouygues's interests, he had appointed Christine Ockrent as an executive above Ian Maxwell. Both Le Lay and the star assumed that her expertise as a performer was a qualification to manage a business. Both were disillusioned and on 8 July, amid great publicity, Ockrent resigned. Ian, subject to constant demands from his father, would fare little better. To Le Lay's irritation, Ian was his father's agent and constantly absent caring for the family's other French interests. Among them was his bid for Provencal.
Soon after TF1's hand-over party, Maxwell, irrepressibly self-confident, had flown to the MIP-TV trade fair at Cannes. Like an excited schoolboy on his birthday, he impatiently awaited sight of his newest toy, the Lady Ghislaine, a 155-foot, 430 tons, five-deck yacht which he had bought for about £15 million from Adnan Khashoggi's brother and named after Maxwell's youngest daughter. During the previous year, the yacht had undergone a lavish refit to incorporate the latest communications equipment and expensive furnishings. One alteration had been undertaken on his wife's particular insistence. The glass walls of the sunken swimming pool, through which the Khashoggi brothers had hoped to watch nubile nymphettes swim while drinking in the lounge, were replaced by solid panelling. Now, anchored alongside Cannes's sea wall, its new owner pouted at the symbol of his international mega-stardom.
Chattels only become status symbols after they are seen. Accordingly, on 24 April, Maxwell hosted an enormous party on board to which Bouygues, Le Lay and the whole French TV world were invited. The symbol was the message: Maxwell's wealth was incalculable and his power was irresistible. Even Bouygues was impressed: I'm a hardened businessman and I have a tough skin. But frankly, he is a mammoth . . .'
The following day, taking the stage in his new role as co-owner of TF1, Maxwell felt the need to address the world's press about his empire's expansion, especially in Europe. ‘It was inevitable,' he told the hordes who gathered, 'that I would invest massively in France' as a springboard first for expansion into Spanish and Portuguese television and then into Latin America. As an initial investment, he was putting $200 million into a production company headed by TF1's former director, Hervé Bourges. Megadeals, proclaimed Maxwell, had already been signed and this was only the beginning. Clearly enjoying the chance to grab the headlines, Maxwell added some juicy and ridiculous comments about his competitors. Berlusconi he condemned as a man who 'doesn't understand' France, while Murdoch 'couldn't even find France or Spain on a map'. And there was more to underscore his adoption of France, 'a country which I love'. Very shortly, he announced, he would launch France's first national daily newspaper printed in various locations; and in the meantime his son Ian 'is negotiating to buy the Provencal'.
'That was a bad mistake,' insists one of Laffont's advisers. Charles-Roux's hesitation turned to anger when she heard about Maxwell's boasts that he had secured Laffont's signed pledge to sell the shares. 'If was intimidation by a man who is like a locomotive. He thought we were imbeciles or amateurs.' Her reaction to Le Monde was cautious: 'He is as good a partner as any and we have no reason to slam the door in his face . . . but at the moment we are not selling.' In fact, she confided her anger to Maitre Paul Lombard, the family lawyer in Paris. Her brief was simple. She was now willing to consider any reasonable proposal for selling the newspaper other than from Maxwell. Within days, Lombard introduced a keen purchaser - Jean-Luc Lagardere who was still smarting from his loss of TF1.
In early May,, having tactfully smoothed the way, Lombard introduced Charles-Roux, Antoine Cordesse and his mother to Lagardere in the Matra building overlooking the Etoile. After the discussions with Maxwell, if was reassuring to discuss the newspapers' future with a Frenchman, if only because there were no language barriers. Charles-Roux's initial reservations about selling to a non-socialist evaporated with the publisher's promise to adhere to the group's traditional policies: 'It's only commercial sense. Marseilles already has a right-wing newspaper.' By the end of the afternoon, the deal was practically sealed. All that remained was to draw up a contract and eventually inform the other shareholders.
In early June, de Barberin telephoned Maxwell whom he had recently met in Cannes. Hie situation since then had changed radically. A sale of the Provencal group to Lagardere, Barberin told Maxwell, had been agreed and the vendors held the majority on the board. 'Bob and young Ian bombarded de Barberin's office with calls,' remembers one observer, 'urging him to intervene, but he was powerless.' Charies-Roux's formal announcement on 2 July of die sale to Lagardere was greeted by Maxwell with a telex offering 20 per cent more than any sum the Frenchman had agreed to pay. 'De Barberin told Maxwell that they had no chance but Maxwell would not listen.' After a simple lunch for the family and Lagardere in the Provencal's
dining room, the offer was formally considered. 'It was a frosty meeting but Laffont knew that she could not block the sale,' says one of those present. Litigation was always Maxwell's last resort and despite the vote, Laffont, with Maxwell's support, began legal proceedings alleging that the winners had conspired. Maxwell lost interest in the court battle soon after it began. His whirlwind had passed yet the three shareholders expected to be immersed in their strife until the 1990s.
Throughout the remainder of 1987, Maxwell felt uncertain about the direction of his French venture. The bullish mood which had driven him throughout that year to conclude a myriad of acquisitions worldwide had netted a few investments in France: a stake in the Sygma photo agency; the outright purchase of APEI, a small magazine publisher; Canal 4, a data information publisher; and he was on the verge of investing in the Channel Tunnel and announcing the launch of a new newspaper, the European, on 1 January 1989 for distribution across the Continent. But at the end of 1987, France was still a temporary, albeit amusing, diversion while he awaited the realisation of his dream - the Big One. As so often in his career, Maxwell judged that a blaze of activity might produce some new opportunities. Having played the share-dealer in both London and New York, he would try his luck in Paris.
On 4 January 1988, Michel Vigier, a senior analyst at Maxwell's French brokers Cholet-Dupont flew to London to prepare the prospectus for the launch of MCC's shares on the Bourse, planned for the following month. Vigier was met by Richard Baker, MCC's deputy managing director, Reg Mogg, the finance director, and Henry Poole, the analyst at MCC's London broker, Alexander, Laing & Cruickshank which had recently been bought by Maxwell's new bankers, Credit Lyonnais. For Maxwell, the launch of MCC shares would certify further international respectability. Yet at the end of the day, Vigier returned to Paris little wiser about his new client. Both Baker and Poole had not fully answered his inquiries about the terms of trade between MCC and the private companies, especially the Liechtenstein-based Pergamon Holdings, and had firmly but politely resisted his attempts to extract detailed answers to his questions about MCC's 1987 results. Language difficulties between the two sides may have been to blame, but there was another possible explanation. The Britons might have been reluctant to reveal that MCC's growth was not as spectacular as Maxwell had predicted. Even with the last-minute 'purchase' on New Year's Eve of the package of Pergamon companies from Liechtenstein, MCC had only achieved sales of £881 million, a long way from the £3 to £5 billion which Maxwell was pledged to achieve by 1990. But more pertinent, Poole's prediction just three months earlier that the company would earn £75 million in 1987 from speculation on shares, currency and property had proven to be optimistic. The preliminary accounts showed that MCC had actually lost nearly £50 million in speculation. Moreover, Maxwell's repeated claim that he was 'cash rich' was no longer valid. The £630 million which he had raised just six months earlier had been spent on what one analyst would later dub 'a hotch-potch' -nearly 50 per cent on purchases from his own Liechtenstein companies.