Fleet Street's finance editors advise the business world daily on profitability, growth and best practice. Fleet Street's economics editors lay down the supposedly immutable laws of their trade with similar élan. And Fleet Street's leader-writers, of course, consistently preach transparency, truth and the wonders of free information. So why is it so damned hard to discover just how well, or how badly, their particular papers are doing? Why does an industry that believes in letting the facts speak for themselves do everything it can to keep the facts it holds closest to home hidden under a blanket?
Some of the answer lies in visceral competition. You don't want to tell your competitors which way the wind's blowing - and, least of all, do you want them plastering your inconvenient (red) figures all over their pages. So there's a natural tendency to keep things as obscure as possible, to wrap titles together in bunches that hide individual performances. But beyond that lies a far more complex truth. Profit is only one reason amongst many why people want to own papers; and other motivations, varying wildly from house to house, set quite different contexts. Let's look at them one by one.
Trinity Mirror
Start with Trinity Mirror because it's a model any business buff can understand. Trinity is what Alastair Campbell might call a bog standard newspaper company. It owns hundreds of small, regional papers and three big London ones. It lives for its share price (down 51% on a 12-month high as I write). It must keep its investors, large and small, happy from year to year.
Not easy in a world where ad revenue nationally has taken a cold bath and regionally remains in intensive care. Like all newspaper chains on the American model, it has had to respond by cutting costs and relentlessly hanging on to existing margins. There seems no other way.
Look at its flagship Daily Mirror, losing around 80,000 copies a year almost automatically, stuck at a 45p cover price whilst the Sun bobs and weaves at 30p - or even 20p - and the Star takes a bow at a mere 10p. But nothing persuades its CEO, Sly Bailey, to play such a price-cutting game.
Indeed, she makes a virtue of her inability to play. Is the Mirror there for the long haul? Clearly not, if you look at crumbling titles like the People.
Once upon a time, in the early sixties, the People sold nearly 6 million.
Today it sells under a tenth of that. But cost controls still make it viable, still in slim profit, however terminal the decline.
It's the next half-year figures, and the ones after that, which matter, and when they turn red, that will be the end: rigidly, unsympathetically, finally. The old days of Hugh Cudlipp, most beloved and trenchant of tabloid editors, are long gone. Now shrewd, savvy people try everything until there's nothing left to try, then fold their tents. Business comes, business goes.
News International
Rupert Murdoch's beloved Bun, by contrast, arrives almost drenched in proprietorial emotion. What... Murdoch, the media tycoon par excellence, a softy? How else do you explain his continued attachment to newspapers - including paying way over the odds for the Wall Street Journal? He has shareholders, too, and powerful board colleagues who can kick up a fuss. But he doesn't start or rescue or continue to own papers for revenue rewards alone. The Sun and the News of the World, profits down from a combined £44.7 million to £40.3 million, aren't true cash cows any longer. But Murdoch's willingness to fight cover price wars, to hang on to a circulation close to 3 million, shows much more than a devotion to pounds, shillings and pence. He wants to be biggest. He needs the political and lobbying clout, the access, his papers bring him. Strict business rules do not apply.
What would Sly of Trinity Mirror do if she owned the Times and Sunday Times, losses up from £50.4 million to an eye-watering £87.7 million in the last twelve months? She'd close or sell in a trice. But whilst Rupert Murdoch sheds staff, trims costs and builds paywalls, there's no suggestion - so long as he survives - that these papers are in danger. He cares about them. Those who know him well sometimes say that printers' ink runs through his veins. He and his family own 29% of News Corporation shares - and, here in the UK, News International (for all the attacks it endures) believes in putting news first.
Northern & Shell
Two - perhaps three - other tycoons inhabit this half-world where profitability and power jostle for dominance. One, flushed with success as he scoops up Channel Five, is Richard Desmond, owner of two Expresses, two Stars and a variety of other magazine businesses packaged into his private Northern and Shell company. Precise figures are hard to obtain - but with underlying earnings topping £88 million last time round and Desmond saying openly that "I've got so much money, it's ridiculous", you get the general, munificent idea.
He's right, too. It is, in a way, ridiculous that a newspaper boss, squeezing costs relentlessly, prospering in the world of celebrity and top-shelf magazines, can be worth £950 million or so (from a rock bottom start).
But there's still a hint of romance to the way he operates: launching OK! in America and ploughing funds to watch it grow long after most corporations would have given up. Richard Desmond is not just a businessman. And nor, in that sense, is Jonathan Harmsworth, the fourth Lord Rothermere.
DMGT
Desmond owns everything. Rothermere - the latest scion of media's royal family - owns 80% of the voting shares in the over-arching Daily Mail and General Trust and thus, via Associated Newspapers, the Daily Mail and Mail on Sunday. No doubt about its profit-making abilities there. Even in the depths of recession, the two Mails plus Metro turned an £18 million profit - and the latest figures, as advertising recovers, make that £42 million. But Rothermere does not live by newspapers alone: on the contrary, DMGT has been diversifying hard for decades now, so that newspapers are becoming the minor part of a marketing, exhibitions and multimedia group. Rothermere needs profits and performance: gradually, though, he's finding ways to protect the ancestral business as it struggles in changing times. The Mails are much more than a meal ticket.
Pearson & the FT
And you could say much the same, curiously enough, about Marjorie Scardino's reign as CEO at Pearson, and therefore the Financial Times.
Financial papers are notoriously exposed when advertising dries up. The FT, through booms and busts, has made useful money in good times and nothing worth having in bad times. Pearson shareholders have often chomped about poor performance and wanted it sold off. But Scardino believes in the Pink One: she's sheltered it, battled for it, and seen it as part of the digital future. Strictly business? Not quite, perhaps. But you can't put a price on influence, prestige or name recognition.
The Barclay Brothers
Which is, perhaps, what the Barclay twins would say about their two Telegraphs. Did they buy them in 2004, from the rubble of Conrad Black, to make money alone? Surely not: £655 million was a very high price to pay. And - after losing £15.7 million in 2008 then making £53.1 million in 2009, with operating profit up 22.8% - you can't conclude that there aren't better businesses around worth buying, enterprises with a more certain future. Yet, equally, the Barclays aren't in newspapers for Downing Street access or any such boons. They live quietly in the Channel Islands, they let their family oversee the Telegraphs, but even the family on UK site doesn't seem to interfere much. What are the whys and wherefores here? Senior Telegraph managers don't seem too sure, either. Score one for total conundrums.
Lebedev’s Independents
To which list, perhaps, you might add the two Independents, losing somewhere between £15 and £20 million when Tony O'Reilly off-loaded them to a kindly ex-KGB oligarch who says he wants to spread the wonders of quality investigative journalism around the world - and doesn't mind signing big cheques. Is Alexander Lebedev buying UK titles as a kind of insurance policy for his interests back in Putinland (much in the way some saw the Barclays' Telegraph purchase as protection against too much political meddling in their area)? Perhaps.
The Guardian in trust
But, again, it has little to do with conventional commerce - even less, in a fashion, than the Guardian group, whose trust ownership exists solely to support the Guardian "in perpetuity", using all its very formidable cash reserves to sustain the paper, the Observer and attendant website through a couple of years that have seen operating losses top £50 million. The Guardian made some tidy profits until around the turn of the century and is under a continuing injunction to be "profit seeking", if not actually making. There are no shareholders demanding a conventional return here. Whatever the group achieves goes back into its work and its papers.
It's an apparently benevolent environment, but one where a balance has to be struck constantly. Sly Bailey understands her imperatives, the imperatives at Trinity Mirror. Guardian imperatives between producing excellence, nurturing talent and questing after eternal life, are much more complex: profit is not a simple word.
And when you assemble the massed attitudes of Fleet Street like this, you rapidly see why profit (in newspapers' own backyards) can also be a very amorphous word. From straightforward business to funny business to no business at all, with infinite variations from paper to paper. Is it the power and the glory that rules? Or cascades of cash as success is squeezed for every last pound? Or the simple imperative of providing good information that helps make democracy better? All three, perhaps, with as many shadings as editorial writers have opinions.
Profit isn't a dirty word: just, in print, a deeply confusing one.
