Magazine article The Spectator

It Looks as If the Expansionist Phase of the Epyptian Empire Has Ended before It Began

Magazine article The Spectator

It Looks as If the Expansionist Phase of the Epyptian Empire Has Ended before It Began

Article excerpt

What has happened to the ambitions of Mohamed Al Fayed, the Egyptian-born owner of Harrods, to be a press magnate? A year ago he was trying to buy the Observer. Last September he relaunched Punch magazine. That was supposed to be the first of many glorious media ventures on the part of his new company, Liberty Publishing. These may be early days, but six months later Punch is not exactly prospering, and Mr Al Fayed has nothing else to show except a tiny radio station called Liberty.

A couple of weeks ago John Dux, chief executive of Liberty Publishing, resigned. There is no consensus as to whether he was pushed as he jumped, or jumped as he was pushed, or simply jumped. In any event, it is agreed that there was little or nothing for this hard-bitten former Murdoch executive to do. He had been used to running companies with turnovers of many millions, but at Liberty he found himself playing daisychains with paper clips, or launching paper aeroplanes into his wastepaper basket.

His departure leaves Stewart Steven, chairman of Liberty Publishing, as a king without a court. But Mr Steven has himself changed his role by taking over the editorship of Punch, at least for the time being. Ever since Peter McKay vacated the editorial chair last November, and took up his pen at the Daily Mail, Mr Steven has been occupied in trying to save the magazine. He is doing as good a job as might be expected of a very successful editor of the Mail on Sunday and the London Evening Standard. But it is obvious that he can't have much time to broker deals or buy newspapers on behalf of Mr Al Fayed, even if there were deals to be brokered or newspapers to be bought.

It seems it is much harder to buy failing newspapers than one might think. There are several titles losing money or sales, or both: the Independent and the Independent on Sunday, the Observer, the two Express titles. Add to those the Daily and Sunday Mirror, which have been dropping circulation while still remaining decently profitable, and there is quite a choice. The trouble is that even loss-making papers are valued expensively. The Independent titles, which Liberty has certainly coveted, though without making an approach, were valued at some 70 million when they last changed hands, even though they were jointly losing at least 10 million a year.

To lavish such sums on a loss-making paper, and to spend what it might take to turn it around, is a formidable undertaking. Mr Steven has tried to attract other partners, partly because Mr Al Fayed's reputation is such that he might lack conviction as a sole proprietor, but also because the owner of Harrods, though very rich, can see the disadvantages in raising many hundreds of millions of pounds entirely off his own bat. That would be the price of Express Newspapers or Mirror Group. Several people, including Janet Holmes a Court who is said to own one per cent of Australia, have shown an interest, but for hard-headed investors the cost of loss-making newspapers is high in relation to likely future rewards. A seasoned newspaper tycoon is needed to take that sort of risk, and there aren't many of those around.

Whether Mr Al Fayed himself is made of the right stuff may be doubted. Until a couple of years ago, when he made an unsuccessful attempt to wrench the corpse of Today from the strangely protective arms of Rupert Murdoch, he hadn't shown much love for publishing. …

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