AXEL Springer’s decision to bow out of the bidding for the Telegraph places a large question mark over whether the German publishing giant will ever make the grade as an international media player - or even as a major newspaper publisher in this country. This is, after all, its second substantial setback in Britain in less than a decade.
When the Mirror Group was up for sale in the 1990s, Springer expressed serious interest. A bid was in preparation. But when news leaked out and Rupert threatened "war" should the well-financed Germans take control of his Sun’s main rival, Frieda Spri
nger, widow of the group’s founder and company matriarch, ordered an immediate retreat. Springer left the field without putting up a fight.
There seems to have been a similar collective loss of bottle over the Telegraph. Despite having arranged up to £675 million in credit lines from Deutsche Bank and been advised that, if it was to stay in the auction, it would have to offer at least £600 million, Springer ended up bidding even less than the £550 million reported by the Sunday Times.
That was a bid that was bound to fail. Springer made much of the fact that it was an "all cash" bid; but everybody trying to buy the Telegraph is offering cash. It also thought it could steal a march by making its offer "binding" - ie, it would not try to reduce it when the haggling started in the final stages of due diligence, which often happens in takeover situations.
But less than £550 million was just too low to make the binding element in the Springer bid attractive. The Telegraph’s investment bank advisers, Lazard, immediately informed the Germans that they were out of the bidding unless their offer was revised substantially upwards.
Senior Springer executives were undoubtedly enthusiastic at the prospect of winning the Telegraph and might have been prepared to up their bid.
But I understand their hands were tied by the company’s supervisory board, populated by the great and the good of German business, including trade union figures.
They were much more cautious and regarded any higher bid as overpaying. Once again Germany’s bureaucratic business structure had proved inadequate for a competitive, high-rolling bid process.
So "the Germans departed from the field without much of a fight’’, raising questions of how serious they really were about buying the Telegraph.
My sense is that they were indeed serious - but out of their depth. They did not really understand what it would take to win the Telegraph trophy.
Of course, Springer remains a formidable and prestigious German media player. It has also made some successful forays into Eastern Europe. But the Telegraph was its ticket to becoming a truly international publishing giant.
Its failure to pay the price the ticket required and to summon the competitive juices British national newspapers demand (for the second time), must cast doubt on whether it will ever escape beyond its home market onto the international stage.
Coe's court plea runs out of steamFEARS that we are heading towards tough judge-made privacy laws have been allayed somewhat by the High Court’s refusal last weekend to grant Sebastian Coe an injunction to stop the Mail on Sunday and Sunday Mirror publishing details of a supposedly ten-year affair he had with a fashion designer. Justice Fulford ruled that, as a public figure recently in the news, Coe’s rights to privacy were not as strong as the rights of the former athlete’s mistress to disclose details of their affair to the newspapers.
The judge may have been influenced by his ex-lover revealing that he had paid for her to have an abortion after he got her pregnant; whatever the reason it was certainly a victory for press freedom. Coming hard on the heels of Naomi Campbell’s victory in the House of Lords to defend her privacy - even though she had lied about her drug addiction - it suggests that we are not necessarily on a one-way street towards greater restriction.
Indeed, we may be heading for a compromise along US lines, where celebrities do have rights to privacy - but not nearly as much as mere mortals.
Glover has his wires crossedLIKE Stephen Glover, the media sage of Oxford, when the Sunday Times reported on 23 May that Axel Springer had pulled out of the bidding for the Telegraph, I didn’t believe it either. But within 24 hours, my Springer sources had confirmed it was true.
Sadly, Stephen had different sources. Four days later, he was writing in the Spectator magazine not only that Springer was still in the running but that "the German publishing group is the most likely victor". Oops!
No doubt there will be a fulsome correction in this week’s Speccie. Mind you, he wrote several years ago that my proprietors, the Barclay brothers, were planning to sell The Scotsman and get out of newspapers altogether.
Last time I looked I was still publishing the Scotsman Newspapers on their behalf and, unlike Springer, they are still very much in the bidding for the Telegraph. We’ve given up hoping for a correction from Mr Glover on that one.
But all who read his entertaining column must wonder: who does he talk to?
How not to hire editorsIT’S no way to choose an editor. Trinity Mirror has employed headhunters to find a replacement for Piers Morgan at the Daily Mirror and chief executive Sly Bailey and her senior managers are interviewing hopefuls this week.
It’s a didactic, corporate process that is unlikely to produce the right result.
Choosing an editor is always a risk: to find an original talent you often have to gamble and be prepared to be wrong (in which case you fire them and try somebody else). That’s what the best proprietors have always done: I can’t imagine Rupert Murdoch, Jonathan Harmsworth or Richard Desmond employing headhunters to find them an editor.
But a proprietor does not run Trinity Mirror. It’s a publicly quoted company, owned by shareholders and run by a corporate bureaucracy. Hence the conventional business approach to appointing the new Mirror editor.
Maybe after the excitement of the Morgan years, Bailey and her executives are looking for a quieter life. But a safe pair of hands is unlikely to reverse the Mirror’s relentless decline in sales. The way Trinity Mirror has gone about replacing Morgan only confirms my growing belief that plcs are not suited to running newspapers in Britain’s rumbustious national newspaper market.
Saying sorry isn't so hardTHERE are so many apologies in the mighty New York Times these days that it’s a wonder it has any room left to print the news.
After the interminable (more than 7,000 words) mea culpa for publishing the inventions of reporter Jayson Blair (since fired), which cost editor Howell Raines his job, the paper is now apologising for its pre-Iraq war stories claiming that Saddam was actively working on weapons of mass destruction. We were fooled, say the editors, by apparently duff information from Iraqi opposition figures.
Enough hand-wringing! At least the NYT was still opposed to going to war, despite the WMD stories it was running.
The same can’t be said for the White House or 10 Downing Street - but I haven’t noticed any apologies from Messrs Bush or Blair.
