During his two decades as chairman of the Daily Mail and the General Trust, Lord Rothermere rose to prominence in his flagship title as a hands-off owner. This week he showed a new determination to impose his authority on the publisher of the best-selling UK daily.
Jonathan Harmsworth decided to replace Geordie Greig as editor of the Daily Mail after just three years, as part of a larger management reshuffle that insiders say has solidified competing power structures around a digital future.
At another defining moment in his time, Harmsworth simultaneously seeks to privatize the media company in a deal that would end the group’s nearly 90-year run on the London Stock Exchange.
Harmsworth was an inexperienced 30-year-old when he became patriarch of the Rothermere dynasty and chairman of the DMGT in 1998 after the death of his father, who had been regarded as Britain’s most post-war press baron. title.
Young Harmsworth made a series of big decisions for the group, including setting up the free sheet for Metro commuters. Yet at the Mail, he kept his distance, allowing Paul Dacre to establish himself as the formidable editorial leader and ultimately run the newspaper for a quarter of a century.
“He [Harmsworth] doesn’t interfere with the newspaper at all: his view has always been that you appoint the best editors and let them handle them, but he has strong opinions on things, âsaid an insider. They added that Harmsworth recently felt that “the mail had gotten a little boring”.
Greig, a courteous old Etonian, took over from Dacre in 2018 and had been popular in the newsroom. Under his leadership, the Mail was named National Newspaper of the Year. But an insider said the title, which has become critical of Boris Johnson’s government in recent months, has lost some of its bite. “Greig is a clubbable networker, which doesn’t necessarily make you a good Daily Mail editor.”
Although the Mail’s circulation has not fallen as much as that of several competitors, it is still down from a daily average of around 2 million 10 years ago, to 910,000 last month, according to the Audit. Bureau of Circulations.
This week, shortly before the change in editorial management, Harmsworth promoted Rich Caccappolo, COO of MailOnline, who divides his time between London and New York, to take charge of both the website and the newspapers. .
Greig’s departure was announced the next day. He spent his last day in the editor’s chair on Friday.
He is replaced by a sidekick of Dacre, Ted Verity, editor of the Mail on Sunday, whom another person at the company described as an “old-fashioned mail man.”
Staff members interpreted the staff changes as a way to push online commerce and solidify the status of Martin Clarke, manager of the MailOnline website, by removing an internal check over his power.
Known for a sometimes fierce temper, he is described by a former colleague in the book Mail Men: The Unauthorized Daily Mail Story like “Jurassic Clarke”, with “prehistoric” behavior.
“Clarke is the one who is going to benefit,” Adrian Addison, author of the book, said of this week’s changes. âClarke was part of the Daily Mail’s long-standing philosophy and culture. Greig had been inserted there. Clarke’s position has always been stronger.
MailOnline has long been run separately from print publications, with a separate program focused more on celebrity and showbiz coverage.
Yet, with Verity supporting the Daily and Sunday titles, insiders said the changes have opened the door, at least in time, to greater integration not only between Daily and Sunday, but also between. print and online transactions.
âThere is a lot of overlap,â said media analyst Claire Enders. âThe impetus to set up MailOnline with major titles is driven by cost. It has to be done.”
The Mail was slow to come online – in part because Dacre has long been skeptical of how to create a viable digital model and once described the idea that the Internet was the future of newspapers as “Bullshit.com”.
Politically, the MailOnline site does not have the influence of newspapers. Commercially, he has to fight for a share of the very competitive online advertising market: a reader has to spend around six hours on the site for DMGT to generate Â£ 1 in revenue.
However, this week’s annual results showed how MailOnline, one of the most widely read English-language websites in the world, has become increasingly important to the business.
MailOnline’s revenue jumped 16% in the year through September, helping DMGT cope with an advertising crisis at Metro and an absence of corporate events during the pandemic. Revenue from Daily Mail and Mail on Sunday titles fell 2% as a slight increase in advertising failed to offset a continued decline in circulation.
DMGT, whose other media assets include newspaper i and New Scientist magazine, reiterated this week that it was considering possible job cuts in response to inflationary pressures, with newsprint costs at an all-time high in 25 years.
The takeover bid by the Rothermeres, which own around a third of the company and all voting rights, follows a large-scale restructuring of DMGT in recent months.
A series of divestitures, including of its RMS insurance analysis business, left the company more exposed to mainstream media, which now accounts for 70% of revenue.
âThese types of assets have been systematically condemned by the City, which will never know this story again. It’s better to be managed privately, âEnders said. “He is doing what is needed now, which is putting those securities on a reasonable basis as cash flow machines for his family.”
She added that the business “can probably operate in private with less friction between the interests of the city and the interests of the family – who after all are the main owners.”
The family’s takeover bid, filed this month, valued DMGT at around Â£ 2.9 billion, including the special dividend, and was recommended by the group’s independent directors.
It still requires the approval of shareholders, many of whom are disappointed with the proposal.
JO Hambro Capital Management, one of DMGT’s largest institutional investors, said on Friday that the company’s remaining assets were “much more” than the offer price.
Majedie Asset Management, which owns 4.6% of DMGT shares, also expressed its opposition.
âIt’s not terrible, but it’s not exciting,â said a portfolio manager from another of the company’s 20 biggest shareholders.
In the newsroom, the candidacy has personal financial implications for some senior executives. An insider said some employees were granted stock options that were due to vest next year, but the buyout offer would mean they would lose favorable tax treatment of up to thousands of pounds each.
If the Rothermers get 90 percent support, all shareholders will be forced to accept the offer. Still, the family only needs to get 50 percent to take DMGT off the list. In this scenario, investors who do not wish to sell should accept shares of the resulting private company. Many asset managers cannot own such holdings, or would be reluctant to do so.
A portfolio manager from a second major investor in DMGT said: âIt’s great to throw your toys out of the stroller and ask for more, but I don’t know where that takes you – other than as a as a minority shareholder of a private company with no voting control.
The investor said there was not much to complain about given the long-term returns generated by DMGT’s âlittle mixed bagâ of assets.
Another shareholder agreed: âIt has been a great race,â they said.