Select Committee on Communications Minutes of Evidence

Examination of Witnesses (Questions 1700 - 1714)


Mr Andrew Neil

  Q1700  Lord King of Bridgwater: But when they bought, was it not losing money then?

  Mr Neil: The Times was losing money, yes.

  Q1701  Lord King of Bridgwater: It happened twice.

  Mr Neil: But, do not forget, the Thomson family bought The Times and The Sunday Times separately. Murdoch bought the two together.

  Q1702  Lord King of Bridgwater: As loss-making operations?

  Mr Neil: Well, that is what was said. There is no question in my mind, since I took over as Editor a year later, that The Sunday Times was highly profitable, even in the pre-Wapping days of union dominance.

  Q1703  Lord King of Bridgwater: Can you remind us, were there other bidders for The Times and The Sunday Times at the time when Murdoch actually acquired them?

  Mr Neil: Well, yes, Harry Evans had put together an alternative consortium. Whether it had managed to raise the money, my memory is a bit vague, but Roy Greenslade knows more about these things than I do. He was not the only show in town, but the way the authorities acted, it made him the only show in town.

  Q1704  Baroness Bonham-Carter of Yarnbury: Of course you also worked for the BBC.

  Mr Neil: Yes.

  Q1705  Baroness Bonham-Carter of Yarnbury: You have talked a lot about diversity and I just wondered how important you felt the role of the BBC was in the diversity of news across the board and also whether you recognise what Andrew Marr told us about a certain bias existing within those walls.

  Mr Neil: I am the living embodiment of countering that bias in the BBC. That is when I am the convenient cuckoo in the nest. I think the BBC is vital to the diversity of our media. I wrote Murdoch's McTaggart Lecture in, I think it was, 1990 and we had just launched Sky Television, and I launched Sky Television as Executive Chairman. The reason we did that was because we thought British broadcasting needed more diversity, but I made clear, and I had a fight with him and in the end he accepted it, I inserted a vital paragraph in the speech which said that, as we moved to a more market-based broadcasting environment, the role of public service broadcasting remained as important as ever because it is part of that diversity, that the market will provide lots, but the BBC and other public service broadcasters will provide things the market does not provide and set a standard, so I am in favour of the market and of public service broadcasting and I have never seen a clash between the two; I think they complement each other.

  Q1706  Bishop of Manchester: Can I just quickly go back to the regulation issue that you were talking of earlier. Am I inferring correctly from what you said that you really would feel that Ofcom in terms of its oversight of mergers in the public interest is really a pretty inadequate body as it stands at the moment?

  Mr Neil: No. Part of the way that regulatory authorities grow in stature and effectiveness is through a body of case-law, and in America this has been going since the Sharman anti-trust laws at the time of the 19th and into the 20th Century and they built up a body of which they refer to and have yardsticks to judge. Now, I think Ofcom is beginning to do that, as is the Competition Commission in this country, and bit by bit I think we are building up a body of robust case-law that puts competition and diversity at the centre of big decisions. What I do not want, and I sense from some of the questions that you are contemplating this, is Ofcom meddling and interfering in newspapers. The purpose of Ofcom is to make sure that ownership does not become too concentrated. After that, it is up to the market and individuals.

  Q1707  Bishop of Manchester: But what about regulation which ensures that pre-merger commitments are maintained? Is there a weakness at the moment over that?

  Mr Neil: I would say, as a matter of principle, that, if you have to ensure commitments before you allow a merger to go ahead, you probably should not let that merger go ahead in the first place.

  Q1708  Lord Maxton: But newspapers are broadcasters now.

  Mr Neil: They are indeed.

  Q1709  Lord Maxton: So, if you say that Ofcom should not regulate newspapers, should they regulate the broadcasting element of newspapers?

  Mr Neil: No, because they are not broadcasters in the sense that they are using broadcast spectrum that has been granted by the Government, they are simply using the Internet, so they should not be regulated.

  Lord Maxton: But that is where it is all going.

  Q1710  Lord Inglewood: You said that you were in favour of a public service broadcaster, but I do not think that you are in favour of a public service newspaper. Can you briefly explain why?

  Mr Neil: Yes.

  Q1711  Lord Inglewood: What is sauce for the goose is sauce for the gander is one argument.

  Mr Neil: Sure. There has always been a market for newspapers right from the start, that anyone who wants to start a newspaper can start a newspaper. That was not true of broadcasting in this country. Broadcasting started being highly regulated by the Conservative Government—

  Q1712  Lord Inglewood: But it is changing, is it not?

  Mr Neil:—that took the BBC into public ownership. It was a Conservative Government that did that in the 1920s. It started as a private company and, because of spectrum scarcity in the early days, there was not a market and we developed a form of public service broadcasting. Now, we are where we are today and it has turned out that we are rather good at that and we have managed to graft a market on to a public service broadcasting tradition which, to my mind, gives British viewers the widest choice and diversity of anywhere in the world now. The American tradition was entirely different; it was a market system onto which they grafted a small public service broadcasting element. It has been nowhere near as successful. By accident and happenstance, we have ended up, I think, with a broadcasting environment that is one of the best in the world now.

  Chairman: Okay, last question.

  Baroness Thornton: It is about the Internet. It is a very broad question really, but what do you think is going to happen next as we turn over the page of convergence and the Internet and you have referred to the bloggers and so on?

  Q1713  Chairman: Basically your views on the future of the newspaper industry, the future of the media industry.

  Mr Neil: The Internet will continue to play an increasing role. Newspapers are agile and competitive and now they are big in the Internet. The advertising dollars will follow the eyeballs. At the moment, people are spending almost as much time on-line as they are watching television and yet advertising dollars in television are about five or six times what they are in the Internet. Eventually, the advertisers will have to go to where the eyeballs are. Wise newspaper groups, of which I would include as diverse as The Guardian and The Telegraph, realise this and have set up Internet plays which will benefit in the years to come. This involves huge investment with no government subsidy and done entirely from the private capital markets, and it is a long-term investment because at the moment you cannot monetise these investments, but over time, as the eyeballs move, so the advertising dollars will move and I think our newspapers, some of them, are in very good shape to exploit the Internet. Just to give you one example, The Guardian has gone from The Manchester Guardian to The Guardian to now the third-biggest global publishing brand this country has. When I started in journalism, there was only The Economist, then The Financial Times came along and The Guardian is now up there with The Economist and The FT as a global brand. That is because of the Internet. The Guardian's website is the third-biggest newspaper website in the United States. These are the opportunities that face us as an industry. The Internet is not a threat, it is a huge opportunity for us, but I do not want, if I can be rather rude, people like yourselves regulating it.

  Q1714  Chairman: We have overrun our time now by quite a lot and we all know of your next engagement. Could I thank you very much. You have given your evidence in a very clear way indeed and I am very grateful. If we have got any other points for you, perhaps we could come back to you. Thank you very much for coming today.

  Mr Neil: And I thank you for listening to me and for inviting me here. Thank you very much.

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