The Murdoch Archipelago

by Bruce Page

  It was also a disaster, which turned the small, break-even Times business into a much larger and unprofitable one. This was not unforeseen: it was predicted in writing by Harry Henry, the Thomson Organisation’s marketing director. If a newspaper has any qualities – and The Times was a famous product – sales can usually be boosted by giving more pages for the same cover price, and this, plus heavy promotion, was the method used. But a ‘quality’ newspaper means one where advertising is the main source of net revenue: if it cannot be turned into higher advertising rates, larger circulation means larger losses. To achieve a profitable balance sales may have to fall. Henry warned that readers in the ABC-1 social class were too few to allow rapid growth in the Times advertising base with the Daily Telegraph, Guardian and Financial Times as well-established competitors.

  TNL did not lack able individuals and good systems. By Fleet Street standards

  – in which MBAs and other qualifications were rare – its budgetary procedures and marketing operations were rather competent. But strategic warnings like Harry Henry’s were met with inertia. Corporate self-criticism did not run to the notion that Hamilton, after many years of success, might have made a profound mistake. Both the Sunday Times and The Times were stern critics of incompetence in British institutions. But where the symptoms occurred internally the usual recourse was to work around them – developing, naturally, a culture of double standards. When Henry was eased out in 1971 his awkward perceptions about the condition of The Times went with him. Though his dissent was expressed in marketing language, it could have been put into other terms: emulating the Daily Telegraph was not a sufficient editorial ambition to restore The Times to life.

  During the 1970s it became painfully clear that the Sunday paper needed much bigger weekend production resources than anything the daily paper could justify. The habit grew – it was scarcely a policy – of using casual workers. Few, naturally, had loyalty to the Sunday Times and some looked on a fat edition like Drake studying a Spanish galleon. A discontinuous workforce and an insistently continuous product is an obvious recipe for ruining management authority – and the authority of union leaders, apart from workplace representatives (shop stewards). But the mismatch of the papers made it hard to avoid – the more so as Times sales drifted towards lower, more realistic levels. It began to seem exceptional for the Sunday Times to achieve a clean print run.

  By 1971 Hamilton was under severe pressure, and he agreed with Gordon Brunton, chairman of TNL and of Thomson British Holdings, to reduce himself to editor-in-chief. Marmaduke (‘Duke’) Hussey was imported from the Mail group as TNL’s chief executive, and was vividly advertised by Brunton as its saviour – a perception difficult to explain. Mike Randall, who had been an able editor of the Mail before joining TNL, was present when Harry Evans imparted the glad news about Hussey to an executive group. Asked for a sketch of his old colleague, Randall said prophetically, ‘If you’re looking for a blundering amateur to run the whole business into the ground, you’ve got him.’ Randall didn’t suffer Henry’s fate. But he was not consulted again.

  During the Second World War Hussey had a short, brave military career, when it appears he evolved his social manner. He spoke to union officials in the breezy way of officers to rankers in expensive regiments (not something universal in the Army, and certainly not by the 1970s). One of his first encounters with an alleged firebrand was at a social occasion, and he took the chance to put the fellow at his ease: ‘Merry Christmas, Fitzpatrick!’ Barry Fitzpatrick, after a thoughtful pause, replied, ‘Merry Christmas, Hussey.’ Interaction never improved significantly. Industrial relations, in spite of Brunton’s prophecy, steadily worsened. Brunton’s path to supreme command in Thomson British Holdings had not closely involved him in newspaper operations. His colleagues saw him as a salesman, and he seems to have taken Hussey’s industrial expertise for granted.

  The Thomson assumption had been that The Times would be profitable by the mid-1970s, but it was stubbornly losing about a million pounds yearly. The Sunday Times could sustain TNL, but, peering ahead, Brunton and his colleagues saw no financial light. Even if Roy Thomson’s urge to invest in The Times had been inflated to the MMC, his affection for the paper translated into tolerance for its losses. The Commission had been told that his heir felt the same. But when Kenneth Thomson succeeded in August 1976 he made clear this was not so. From his Canadian base he put increasing pressure on his British executives to get The Times into profit. The deadline was hazy, but certainly closer than 1987.

  In 1978 they decided that the solution was a dramatic, one-off cost reduction, by immediate, simultaneous introduction (a) of wholly new electronic print technology, and (b) of wholly new working conditions with enforceable guarantees. These would be imposed by a threat to close the papers down. In April 1978 Hussey wrote to the five major print unions with an outline plan. Redundancies would not be compulsory. But if any negotiations were incomplete by 30 November the whole workforce, journalists apart, would be fired, and publication cease until they were. The aims made sense. Electronic composition was overdue, and financial executives like Donald Cruickshank thought industrial relations were so chaotic as to make planning impossible. A fresh start was needed. The tactics were insane. It would be hard to find a parallel, though the Light Brigade has been mentioned. Management theory conventionally forbids tackling two complex objectives simultaneously. But that was nothing.

  Hussey’s plan as sold to Brunton assumed that financial pressure on the union side would become intolerable within three months – and then get worse. The facts were exactly opposite, were common industrial knowledge, and arose from the conditions Hussey sought to change. Many of TNL’s workers were freelances, getting income from several newspapers (and from other work, like taxi-driving). They would suffer a reduction of earnings only during the first phase of the lockout, and would then earn more as other publishers raised production to fill demand caused by the absence of the Times titles. Hussey had got TNL’s competitors to promise not to do so – for three months. Failing victory within the deadline an impossibility – TNL would suffer rising financial distress, while the unions’ position grew steadily easier.

  Some of these print workers were unattractive characters (though nothing like as many as claimed by Brunton, Hussey & Co., who obviously knew little of them). But for the commanders of TNL to claim that their woes had real authors other than themselves was like complaining about Russian cannonfire in the Valley of Death. Amazed spectators saw that at the time. Grigg’s History reveals more: when the policy of agreement-or-else was declared in April 1978, no proposed agreements existed. After Hussey’s demarche, teams of managers and consultants began working up proposals for fifty-four negotiating units, to be presented to the union branches (‘chapels’) from October onwards – work, Grigg observes, which ‘might with advantage have been undertaken at an earlier stage’.

  According to James Evans, later chairman of TNL, its line executives did not think the shutdown serious until just before it happened, which is not surprising. Thus six months passed in supposing the workforce might agree – under a futile threat – to a set of generalised principles with consequences which were not known in detail; and these were replaced by an array of detailed agreements demanding total acceptance within weeks. Many of the first drafts were so clumsy as to invite – to compel – immediate rejection, even by the pacific National Union of Journalists.

  This was a wretched enough gamble with just a business at risk, and not the public interest which had been trusted to Thomsons in return for fulsome promises. Thomson British Holdings was the controller of many other assets with a public dimension: as a North Sea oil operator, as a recipient of airline landingrights, and as a publisher of regional newspapers and directories. If those operations had departed similarly from reality, stiff criticism might have been expected in the Sunday Times and The Times.

  But the editors were loyally silent, having succumbed to the ubiquitous rationalisatio
n about sinful unions and the panacea of cost reduction via technology. The unions were surely irresponsible. But the central problem at TNL was absence of an editorial purpose for The Times such as to make it viable in a commercial partnership with the Sunday Times. Two decades later, neither the unions nor any constraint on technology exist, but The Times still cannot meet its marketplace competitors without subsidy – now provided by Newscorp. The Times was founded as a high-tech newspaper, but by people who knew that technology is only effective as implementation of an editorial idea. However competent a business may seem in its ordinary mechanism, chieftains inadequately supplied with criticism will run it into the ground. Media businesses, vendors of criticism generally, rarely keep any for themselves.

  Brunton and Hussey surrendered in November 1979 and publishing recommenced with just a few manning reductions. They added some profit potential, but nothing to justify £45 million they had spent (the most part in cash).

  II: Independence surrendered Meanwhile the Callaghan Labour government had been tossing on its deathbed, while the Conservatives promised new laws to restrain the rampant union activities which had laid it there. During the lockout James Prior, the Tory employment spokesman, was canvassed for an endorsement of the lockout’s aim: he decided TNL’s leaders must extract themselves from the trench they had dug. But The Times and the Sunday Times awoke to a new political scene, for Margaret Thatcher won the general election of 3 May 1979.

  While democratic systems persist, no government does only harm. Comparing the ratio as between governments is contentious and beyond our present purpose, but it it should not be too much to say of Mrs Thatcher’s regime that the good it did was damaged to an unusual degree by the way it worked and the rigidity it developed. Its media life was part of this, and is part of our subject.

  Initially Mrs Thatcher, leader of her party, was also leader of an outnumbered faction within it. Memories of a later ascendancy often obscure the fact that the Tories who’ won the 1979 election were largely moderates, or – like the economic spokesman Geoffrey Howe – temperamental moderates allied to ‘Thatcher’s People’ over specific monetarist aims. The True People had a vaster agenda, in which normal Tory urges like squeezing public expenditure were replaced by an ambition to abolish it. Their enemies were, famously, the Wets – to be overcome thoroughly, but without loss of purity.

  Some True People were Cabinet ministers, like Sir Keith Joseph and John Biffen, probably her closest acolyte of these early days. But most were not elected (and often not Tories at all), like the software millionaire Sir John Hoskyns, who ran Mrs Thatcher’s think-tank, and the columnist Woodrow Wyatt, once a Labour MP. Important among them was Larry Lamb – representing Rupert Murdoch, the Sun, and heroic inputs to the electoral triumph.

  Murdoch’s attachments to power are the natural consequence of an authoritarian disposition. But the method of Murdoch’s mentor Black Jack McEwen was subtle: he selected among powerful factions the one where attachment would best supply need and most evoke gratitude. Thatcher’s People, anxious to gain results and eschew compromise, needed things the Murdoch editorial technique could bring to the government context as well as the electoral one.

  A Cabinet of course has a public form. Every Prime Minister makes it somewhat of a facade by cultivating subsidiary committees and ad-hoc networks. Mrs Thatcher, on abundant testimony, went far in that direction, building a personal apparatus congenial in terms of policy but unusually remote from the public structure she was responsible for. This created a need for customised media presentation based on torrential leaking: Howe (though an ally) measured the incontinence against his time in the previous Tory administration, and was alarmed. Lord Prior describes Larry Lamb’s plumbers at the output end:

  Margaret developed a technique for getting the right-wing popular press [that is, the Sun] to have a major lead story on some matter coming up for discussion in Cabinet that morning. The headline would be something along the lines of BATFLING MAGGIE UNDER ATTACK FROM WETS. The issue would then be unfolded in terms of being pro- or anti-Maggie. The Cabinet would hold its discussion and everyone would say how shocking it was that there had been a leak this morning, which simply must not be repeated. An edict would go out that no one, but no one, was to give any indication of the decision which had been taken.

  Next day the Sun would penetrate security, and announce a victory without contradiction.

  Sir John Kerr had been glad to find in the Australian constitutional ideas developing similarly to his own, and Mrs Thatcher’s People were reassured by reports of a Cabinet in which their outlook was generally prevalent despite the real Cabinet’s unsatisfactory composition. And when reverses did occur, the method could still provide. In October 1980 Prior recalls:

  at the time of the cabinet discussion on public spending, the Sun proclaimed: ‘Premier Margaret Thatcher routed the “wets” in her cabinet in a major showdown over public spending. She waded into the attack …’

  This was not what had happened … When the Sun finally reported a month later that the Prime Minister and her Treasury team had not secured the cuts they had sought, its headline typified the view that Margaret was somehow separate from her own Government:

  MAGGIE AT BAY: Tories baffled as the battle for £2 billion extra cuts is lost. ‘The Tories’ – that is, the Cabinet majority who had voted against the cuts – were not of course ‘baffled’. It was just the Sun’s way of mitigating reality. Within this special political framework the Prime Minister could compromise without having to take demeaning responsibility for it.

  It is curious that political propaganda should succeed more with participants than with spectators, but reassurance is an important commodity to closely engaged political groups, and forms part of the demeanour of the embattled leader. All the same it has limits, even in the hands of a team like Larry Lamb’s. John Hoskyns in the latter part of 1980 wrote pessimistically to a friend about the Prime Minister’s progress: ‘I believe she is in a rather fatalistic mood, feeling that we’ve missed the boat on trade union reforms, lost the first 18 months on public spending. The colleagues, officials, banks, etc are all “no good”.’ These were early days, however, and Murdoch only had the Sun and News of the World to put behind the cause.

  At TNL the first half of 1980 was actually euphoric because the papers had reopened with amazingly little harm, and the Sunday Times recorded near-record sales. All the same, command was reorganised. Hussey followed Hamilton to the sidelines, leaving Brunton, via the holding company, wholly dominant. With editorial executives excluded, James Evans, formerly TNL’s lawyer, returned from Thomson Oil to serve as TNL chairman. If not briefed for a sale of the papers, says Grigg, ‘he was the sort of cool, detached professional under whom such a step could more easily be taken …’ Distanced from Hussey’s debacle, Brunton was securing exits. By August projections showed that resurgent sales would not prevent a £13 million loss on the year (much of it relaunch costs). Then, as Don Cruickshank’s financial team tackled the strenuous task of recovery plans for 1981, a strike was called at The Times – by the journalists, whose salaries had been paid throughout the lockout.

  The folly was trivial compared to the exploits of the chieftains themselves. But it was as if Napoleon had trudged back from Moscow to find Josephine twined around a Cossack. Denis Hamilton’s bitterness was all consuming. At the end of August 1980 Brunton secretly gathered a few advisers, including James Evans, for dinner at his Elizabethan mansion, left them briefly while he called Canada, and returned to say that Ken Thomson had decided to get out. Neither editor was told until 20 October, two days before the revelation that both papers – due to huge losses would, unless meanwhile sold, close for good in March 1981. James Evans had found his detachment tested by keeping silent for two months among colleagues striving with recovery schemes. The editors immediately decided they would try to buy the papers separately. But the sale, in timing and method, was loaded against them – deliberately so.

 
Little remained by now of the undertakings which had once persuaded the Monopolies Commission. The Times had been ruined, not revived, and the superb Sunday Times made vulnerable. One promise had been kept: editorial independence. So honour survived for the moment. Brunton assuming, says Grigg, ‘unfettered power’ – now set himself to dispose of that, by selling to the man who would predictably terminate independence. Murdoch was his choice.

  Here the Shawcross newspaper court deserves a backward glance. It would have agreed the TNL merger, but with undertakings of legal force. And, as TNL breached them, there would have been no ‘unfettered power’ for Brunton: indeed, the law – undertakings aside – excludes the failed management of a major newspaper from selecting its next owner. The point may seem harsh, as the failings were unmalicious, the financial pain real, but it needs making because Brunton’s bill of sale – dumping exclusive blame glibly on the unions – seized the right to conduct an ‘open and responsible’ sale of ‘great national newspapers’ by methods actually secretive and arrogant. It was unlawful. But the law had no protector.

  Murdoch certainly wanted the Sunday Times. He had followed the suspension closely, and Brunton had sent Hussey to discuss its progress with him in June 1979. Brunton’s close relationship with Murdoch was quite recent, and its context was the board of the Reuters news agency, where they were doing some goldmining together. TNL and TBH (through its regional papers) were big Reuters shareholders, and Denis Hamilton was chairman; Murdoch became a director in 1979, representing the Newspaper Publishers Association. (His tabloids had a few shares.)