Examination of Witnesses (Questions 1700
- 1714)
WEDNESDAY 23 JANUARY 2008
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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