Examination of Witnesses (Questions 820
- 839)
WEDNESDAY 14 NOVEMBER 2007
Mr Tim Bowdler and Mr Mike Gilson
Q820 Baroness Eccles of Moulton:
Sheffield and Scarborough are a long way apart. How do you deal
with getting the newsprint to Scarborough quickly enough so that
it hits the market when you want it to?
Mr Bowdler: By simply organising the transport
arrangements to be waiting there for the newspapers to come off
the press. That is the reason why The Scarborough Evening News
is printed earlier than it was. If you look at the newspaper,
you will see a newspaper which has incredibly high quality print;
colour on every page. If you looked at the old version you would
have seen little colour; poor quality reproduction. This was an
economic decision. We could not have put a press like this in
Scarborough.
Q821 Chairman:
What happens if you get a really big story which breaks late in
Scarborough?
Mr Bowdler: Then we will run another edition.
Q822 Baroness Bonham Carter of Yarnbury:
You have talked a lot about the investment you have made in this
business and that is very impressive. We picked up an observation
made, indeed, about you and about your business. It appeared in
the Observer in 2005, referring to Johnston as "a
lean, mean machine" and talking about a "mouthwatering
operating margin of 34%, the highest in the industry". I
would like to ask you two questions about that. One is: Is that
still the case? And secondly: What expectations do you have of
your news papers in terms of the profit that they generate?
Mr Bowdler: Let me address the "lean, mean
machine" first of all. I do not think there is anything to
be embarrassed about in being an efficient business. We should
all strive to be efficient businesses. That does not mean that
we do not invest heavily, that we do not hold as vitally important
things like having journalism at the "coalface", in
local market-places. If we are efficient, great. If we are cutting
at the business in areas where it would be damaging to our long-term
prospects, that would be bad. But that is not the case. I think
one needs to interpret what they say with a pinch of salt—it
was written by journalist, after all! We did provide you with
information which gave our group operating margin and you will
see that, in 2006, it fell from the heady heights of 34% to 31%
and, indeed, like-for-like, at the half-year this year we are
down by 0.8 percentage points. These are a reflection of the economic
climate but also of changing mix. The Scotsman, which we
acquired at the beginning of 2006, has a much lower margin than
the business does as a whole.
Q823 Lord Maxton:
Does it have any margin at all?
Mr Bowdler: Yes, when we bought it, it had an
operating margin of 12%. We have worked hard to try to improve
that but not at the expense of journalism or content or investment
in editorial. Far from it. We do not have a figure which we believe
every newspaper should achieve, because they are all different.
Nor do we have a short-termist view. We have to recognize where
we are in the cycle; we have to recognize the investment needs
of the business. Indeed, we are spending an additional £5
million this year, for instance, of cost that is coming off our
P& L, in improving our websites. We are investing in the business
but, equally, we tried to set sensible targets of profitability.
Chairman: Lord King.
Q824 Lord King of Bridgwater:
Ownership and influence. There are two quotes here in your guidelines.
One is that editors should have the freedom to edit without interference,
and then there is a bit about editors should make management aware
of any articles they think might have an adverse commercial impact
on the business. What is the experience that you have? Is it that
the local newspapers do not really get involved in issues very
much of that kind?
Mr Bowdler: We are passionate about ensuring
that editors are free to edit. We say in our guideline that management
are free to make their views known, but the editors' views are
paramount. They decide. Mike Gilson will decide what goes in The
Scotsman and what his managing director or I might say is
absolutely something which he has no need to regard at all. The
point you have made about making management aware of a story which
might cause commercial embarrassment, is simply about good management.
We think it would be bad practice if, for example, an adverse
article about a big advertiser was published and we did not know
about it in advance of that; because we know the advertiser would
get on the telephone and it would look pretty incompetent if we
were not aware of the story. It does not mean there is any influence
from management over whether that story should run or, indeed,
the tenor or level of content.
Q825 Lord King of Bridgwater:
You are saying that it never has.
Mr Bowdler: No, it has not. We gave you examples
in our submission of advertising revenues which we have lost as
a result of adverse stories. Hear it from an editor.
Mr Gilson: I do not know how much you know,
but I am Chairman of the Johnston Press Editorial Review Group,
which is a body of editors set up really to advise Johnston Press
on editorial ethical issues that, that is also a sounding board
for editors. I have been on the Committee for about five years
and I think it would have come to us if there had been issues.
I am pretty sure it would have done. I cannot remember one case
where there has been a conflict between a management director
and editor which has resulted in the story being pulled. In my
own experience—I have been in Johnston Press since 1996—there
have been exchanges of views, as you would rightly expect: advertising
directors possibly seeing some money fly out of the window have
some fairly robust views on that and it is absolutely right that
they should do so.
Q826 Lord King of Bridgwater:
Moving from the commercial—and, I mean, you have moved.
Were you with Sir Richard Storey at Portsmouth?
Mr Gilson: Yes.
Q827 Lord King of Bridgwater:
Is there a difference, having moved? Scotland, we know, is a pretty
vexatious place at times, politically and in other ways. Do you
feel under more pressure there about political stories?
Mr Gilson: The Scotsman is very different
from the Portsmouth News is very different from—if
you will excuse me—the Pocklington Post. That is
why it is essential that editors are put in place to edit in that
local market and understand the local market. That is why you
cannot have a slide-rule for any of these things. Yes, obviously
in Scotland it is extremely interesting at the moment and very,
very political. That is a great thing for newspapers. Our newspaper
is slightly different, in that it occasionally will take political
views—as you would expect The Scotsman to do. In
other markets, city markets, there is an expectation that you
are telling it straight. Obviously that might be different but—
Q828 Lord King of Bridgwater:
What is the closest you have come to taking a political position
on which your management have challenged you on its wisdom?
Mr Gilson: For example, at the last Holyrood
Elections, The Scotsman broke its tradition and supported
the SNP with a Liberal Democrat coalition. Previous to that, we
had not done so. Conversations went on—of course there were
views—and I spoke with local management about the view we
were taking and why we were taking it, but it was largely based
on where we thought our readers were, most importantly, and what
our reporters thought and what was good for the paper. At no time
in that process did any manager suggest to me—well, I think
they would know the reaction they would get—or even try
to suggest to me that that was the wrong vision to take.
Q829 Lord King of Bridgwater:
Mr Bowdler, do you have pressure from leaders of political parties
in Scotland?
Mr Bowdler: They will occasionally call me.
Q830 Lord King of Bridgwater:
Why would they do that if the editor is not going to pay any attention
to what you say anyway?
Mr Bowdler: If I have a conversation with a
politician, a political leader, I will make it very clear to them,
"I do not edit the paper; I have no influence over the way
the newspaper reports," so, sure, I am glad to talk to anyone,
because I think it is important that I understand where they are
coming from and what their issues are, but it will not influence
the approach of the newspaper. I have to say, on this particular
issue of the Holyrood Elections, our board was interested; they
asked me what position the Scotsman would take. In fact, I did
talk to Mike about it: he and I had an interesting discussion
but he ignored my views totally.
Lord Maxton: Was that change—which,
by the way, means I now buy the Observer on Sunday or the
Sunday Herald rather than The Scotsman, I will not
buy a newspaper which supports the SNP—
Chairman: So you were not going with
the trend on this one!
Q831 Lord Maxton:
Obviously, you purchased that newspaper. The Barclay brothers
had one line and I think they probably did interfere more in the
editorial control than possibly you do. To what extent was that
change in tone, if you like, and editorial as a result of the
change in ownership?
Mr Gilson: Clearly, I cannot talk about past
regimes, if you like, but there was a different management style
at The Scotsman at that time—quite a combative style,
I think. Those who know Scotland and knew The Scotsman
at that time will not need telling of that. I think, yes, there
is less interference. We have got back at The Scotsman
to the story being king rather than a world view being sifted
through all the stories. We have put the emphasis back on the
journalism and on us finding out very, very good stories for stories
sake rather than through a prism of a political view on everything
we are doing. However, the process by which we approached the
Holyrood Elections was simple: we gathered all our thinkers together,
we thought about where we were with it, we looked at what our
readers were thinking—obviously not all of them, because
we have lost one—but it felt right for us that this time,
for galvanising Scottish government, that the SNP should be given
its chance. As I say, there were conversations with Tim, but that
is as far as it went.
Q832 Lord Inglewood:
In response to Lord King's question you said that no story had,
to your knowledge, been pulled in the last five years, but what
about stories that might have been changed?
Mr Bowdler: I am genuinely unaware of any. Certainly
none has come to me or been influenced by me. You have read the
policy guidelines—we have provided those to you—and
there is a very rigorous and clear process by which an editor
who feels there is interference in his copy has a right of appeal,
in which I get involved, but even I have no ultimate decision
over that. In the final analysis, I would have to seek independent
external views. I would have to take those to the board and ultimately
the board would make the decision. We have really tried to put
in place a rigorous process which absolutely guarantees and underpins
the right of the editor to edit. We feel passionate about that.
Mr Gilson: For example, many of our newspapers,
the bigger ones, the city ones, will undoubtedly have a consumer
affairs page which will invariably take up the rights of readers
against delivery of service and that delivery of service will
almost inevitably be advertised in the paper. That happens on
a pretty regular basis.
Q833 Chairman:
You are saying you do not give in to this pressure, but how many
attempts are made to bring commercial pressure on you?
Mr Bowdler: Very few, ever. Very few indeed—I
think, not least, because people are very clear about where we
stand as a company and as a business.
Q834 Chairman:
Is that your experience as well in Scotland?
Mr Gilson: Indeed. If you are asking me how
many times has the ad director come up to me saying, "You're
not doing this are you?" there have been one or two times
like that, but in general it is accepted. I am pretty sure we
are one of the only groups which has a body like the Editorial
Review Group, which is clearly in the statute and we are clear
about what we are doing. I think it is just taken for granted
that those rights are there. We have certainly not changed a story.
There are times when an advertiser will put you under pressure
but I cannot remember a time, ever, that we changed a story because
of that.
Q835 Lord Maxton:
Obviously there has been a lot of consolidation of local papers,
regional papers. Are you in a position where, in some areas, you
are almost a monopoly? Does it mean, basically, that the lack
of competition has an impact on your editorial decisions or whatever
decisions you might take?
Mr Bowdler: I think the key thing here is how
you define the market. If you take the very narrow definition
which the OFT or the Competition Commission has adopted, which
is based on, if I may say so, a very academic economist's view
of the world, then you might even conclude that free newspapers
and paid-for newspapers, as they have at times in the past, are
in different market-places, which is clearly fatuous. The reality
is that we compete both in terms of news content and in terms
of advertising with a wide variety of media. The idea that there
is somehow this comfortable world of newspaper monopolies is,
frankly, fanciful. If you look at content, for example, we compete
vigorously with the BBC, with their very expansionary plans of
investing a great deal of public money into websites at the local
level. They are real competitors, very often feeding on stories
which our journalists unearth. They are just one example. We have
a myriad of print competitors, for instance parish magazines.
In our market-places there are numerous sources of news and information,
not least now increasingly online. If you look at advertising,
our advertisers are very cute people in the main. They know if
we were to abuse an apparent monopolistic position they would
reduce their spend with us. They would go elsewhere. There is
an increasing number of choices they have, particularly of course
increasingly online. This idea of a world of cosy monopolies is
one I think which it would be best to dismiss and forget completely
because it is far from the truth.
Q836 Lord Maxton:
You very much are online, are you not?
Mr Bowdler: Yes.
Q837 Lord Maxton:
You have made that it a very deliberate policy. Certainly I think
I have seen some of your local newspapers where you have put out
video content. I know The Scotsman has yet to get there.
Mr Gilson: We are there now. There is video
content.
Lord King of Bridgwater: But Lord Maxton
will not be watching it!
Lord Maxton: I do not pay online, so
I read online.
Q838 Baroness Eccles of Moulton:
I would like to ask you about editorial diversity and also the
availability of local news. How do you set editorial standards,
in terms of quantity and quality, with your different local titles?
To what extent do your titles share news sources and stories?
That is the first part of the question.
Mr Gilson: It is a good question, because it
is very difficult when you are talking about something that is
a matter of opinion, ie news: everyone has an opinion, everyone
is an expert. However, one of the benefits of a group becoming
bigger is that you have more to benchmark, more resources, more
talent. One of the things that we do in terms of talking about
the quality of newspapers is simply to exchange ideas and views.
The Editorial Review Group is very, very strong, in (a) being
on the interview panel for the appointment of all new editors,
for instance, and (b) mentoring new editors who come in, because
it is quite a daunting task coming in as a new editor. In the
old days, I was shoved in a room, it was locked, and I was given
a budget pack and told, "Get on with it." That does
not happen any more. I am mentoring two or three editors already
in Scotland. They are new editors, I can take them through all
manner of processes and what is expected, but at the end of the
day we want local editors to know their local readers. That is
still as vital. I do not know, necessarily, the market of local
newspapers in Falkirk, for example. The Editorial Review Group
is constantly briefing editors on what is happening in the world,
both ethical and legal, and also some of the things that have
worked in the group. We are very, very good now in this wider
group: if something works in Preston, it might work in Portsmouth;
let us try it. If it does not work, fine: it does not work for
that local market. There is a lot of information exchange. I do
not think you can have a document that says, "This is the
minimum standard."
Mr Bowdler: In terms of news, I think it is
important to emphasise that we employ journalists in all of our
local markets and we expect our newspapers at the local level
to carry local news which is derived locally and where an editor
locally is determining the way in which that news will be presented.
There are some aspects of content where it makes sense to share:
wedding features, car tests. On the group intranet we have a section
called Story Search where we put content which can be used by
newspapers around the group, but this is generic content which
is not local in its flavour. It is vitally important that local
content is really looked after at the local level.
Mr Gilson: I should say, even on that score,
if it is car tests or things like that, there have been times
when the local centre has said, "The guy who writes our cars
is a personality for us," and the option not to take the
JP Story Search on that is there and has been upheld. It is about,
certainly in motors, what is good for the local market.
Q839 Baroness Eccles of Moulton:
In your evidence, you referred to the effect that the Data Protection
Act has on local content. You said, for instance, that you no
longer get information about road accident victims and, also,
the information coming from the emergency services and local schools
has decreased as a direct result of reaction to recent legislation.
Could you say a bit more about that?
Mr Gilson: We had a long battle, through the
Society of Editors, with local police forces about the names of
people. Local newspapers and all newspapers are about names, faces
and things that bind the community together. If you have stories
without names and faces in them, they become not interesting stories.
Over the years—and I am talking of my own experience now—there
has been an issue. Some of the laws on data protection, in terms
of names and how data protection is interpreted, is an issue we
could spend another three hours on. Schools, for example: in terms
of names and faces of children, if you look at local newspapers,
the line-up of kids who have done exceptionally well in a local
concert is absolutely what local newspapers should be doing, but
there are some schools who are still worried about (a) probably
misunderstanding the law and (b) fears about the Internet and
general fears about children's safety and that has made it very
hard over the years to get information into the paper and we have
had to work a lot harder on that. There seems to be both a societal
and a legal reason for people gathering things in a little bit
more. Also, overall, in terms of news, in the way councils are
run nowadays—and I would like to know the figures for the
entire spend on press officers for local authorities in the last
10 years across the country; I think that would be very hair-curling—that
news is now managed and, to me, to the detriment of local news.
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