Magazine article The Spectator

Is Gannett Poised to Swoop on the Daily Telegraph?

Magazine article The Spectator

Is Gannett Poised to Swoop on the Daily Telegraph?

Article excerpt

Amid all the chatter about who may buy the Telegraph Group, the names one hears most often are those of the Daily Mail group, the Express group and Richard Desmond, and the Barclay Brothers. Occasionally various venture capitalists are also mentioned. The one company that is hardly taken seriously, though it appears on most lists of possible bidders, is the American publisher Gannett. And yet Gannett, it seems, is in pole position to buy Hollinger International, whose main titles are the Daily Telegraph, the Sunday Telegraph, the Chicago Sun-Times, the Jerusalem Post and last, though not least, The Spectator.

It is not obvious why Gannett should have been virtually ignored by media watchers. The company is the biggest US newspaper and broadcast group, although the only newspaper of any notoriety it owns in America is USA Today. It is also highly acquisitive, and has scooped up dozens of American regional newspapers over the past five years. In this country it bought Newsquest, the second biggest provincial newspaper group, in 1999, and the Scottish Media Group, publisher of the Herald and Evening Times in Glasgow, last year. Gannett is deadly serious about acquiring Hollinger's titles.

There are several reasons for regarding it as the most likely victor. In the first place it is bigger and more profitable than any of the other bidders, and may well be in a position to pay the largest amount of money. It is able to bid for all of Hollinger's titles, and not just the British publications. This is attractive to Hollinger since there might be tax liabilities if the newspapers were sold off separately. Perhaps Gannett's strongest card is that, unlike the Daily Mail group and Richard Desmond, it would not face regulatory hassles in this country. Though it owns many regional titles here, it does not yet have a foothold on the national stage, and would therefore not be referred to the competition authorities. The same holds true in America, where Gannett owns only a single newspaper in Illinois, and could take over the Chicago Sun-Times with impunity.

Would Gannett be a beneficent owner of the Telegraph Group? There is no doubt that it is a highly professional company. Its admirers point out that it kept faith with USA Today for many years after its launch, pouring tens of millions of dollars into the new venture to keep it afloat. The paper is now profitable. But journalists and others at the Telegraph Group would be mistaken in believing that Gannett would similarly throw enormous sums of money in their direction. At both Newsquest and the Scottish Media Group the company has acquired the reputation of a ferocious cost-cutter, while at the same time developing new streams of revenue. Gannett would undoubtedly squeeze costs at the Telegraph Group, though not necessarily to the detriment of its titles.

There are deeper cultural reasons for worrying about Gannett as a prospective owner. What do its directors, based in distant Virginia, know of this country and the Daily Telegraph? In France the law prohibits foreign ownership of newspapers, but not in free-market Britain. It is true that Hollinger International is as North American as Gannett, but it had as its controlling shareholder Conrad Black, an Anglophile who was prepared to defend the Daily Telegraph as a British institution. There is no such figure waiting in the wings at Gannett. My worry is not that the Daily Telegraph would become relentlessly pro-American - it could hardly be more so than it already is - but that a foreign corporate owner might not understand and preserve its peculiar quirks and characteristics. …

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