3
Profits of doom
It was a warmish spring evening in 2006 when Independent Newspapers held its International Advisory Board (IAB) banquet at the Castle in central Cape Town. Chris Whitfield was standing at the end of an arcade, smoking a cigarette, away from the crowded tent inside the Castle walls where the thousand or so guests were milling about. A loud voice alerted him to an animated discussion taking place between two men further down the arcade.
Sir Anthony O’Reilly, the ageing yet still imposing Irish billionaire and proprietor of Independent Media, was vigorously poking his finger at that day’s edition of the Cape Times and the tone of his voice suggested he was very angry. Opposite, framed by the arches, was Tony Howard, chief executive of the South African arm of the company. Howard, a slight man with heavy spectacles below a mop of dark hair, was taking a beating.
Howard turned and noticed Whitfield. The CEO’s hand rose and pointed towards him. O’Reilly stuffed the newspaper into Howard’s hands and the agitated CEO strode rapidly down the corridor. ‘Sir Anthony wants to know why the Cape Times used a picture of [former Canadian Prime Minister Brian] Mulroney with the story about the IAB,’ said Howard.
‘And …?’ responded a puzzled Whitfield.
‘He is in the story and the picture should have been of him.’
With that Howard headed off into the tent. Whitfield was bemused. For a start he was the editor of the Cape Argus at the time, not the Cape Times, and had no authority over the latter paper’s editor or staff. It seemed he had simply been in the wrong place at the wrong time.
Two days later Whitfield was given another reminder of O’Reilly’s ego and his sentiments about the newspapers. The Cape Argus had that day published an article on the IAB and illustrated it with a small head-and-shoulders photograph of O’Reilly, drawn from the files.
Howard phoned him late at night – Whitfield was in bed, reading – to tell him that ‘the old man is not happy about the picture’. O’Reilly had been on a diet and the picture in question showed him carrying some weight. Whitfield was told to have the photographers go through the picture library and remove all those images in which Sir Anthony might appear overweight.
Generally, though, O’Reilly and his managers steered clear of editorial issues. The real damage inflicted by the Irish was more insidious, and often at the hands of a South African management keen to please its foreign bosses. A senior Irish executive once said to Whitfield with a laugh: ‘We ask them to jump, and they ask: How high?’
In 1993 the Irish investors – Independent Newspapers plc (INM) – had bought what was then Argus Newspapers and its titles from Anglo American Corporation.
They then swept into the company with a swagger that caught many of the staff by surprise, their manner being in such sharp contrast to the benign and generally hands-off approach of Anglo. First through the door was one Chris Tippler – an Australian consultant who was immediately branded as being the ‘Irish’s rottweiler’, a characterisation which he did not like. ‘Newspapers are like slot machines – get all the bits in the right place, pull the handle and the money comes pouring out,’ he once told Whitfield at a meeting in his Sandton hotel room.
Ivan Fallon, a flamboyant man with a pronounced upper-class British accent, was appointed chief executive officer and set about carving up the company. Within months he had launched a national business supplement – Business Report. Sometime later the group’s wunderkind, Shaun Johnson, was given the task of launching a new, quality Sunday title, the Sunday Independent.
Business Report was launched with great fanfare in Johannesburg. A light show was beamed onto neighbouring buildings from a city-centre rooftop as the country’s leading businessmen and politicians looked on. It was evident that the Irish were intent on burying ‘Aunty Argus’ – the old grey company of Anglo American.
The Sunday Independent was launched on 26 June 1995. The lead story was South Africa’s Rugby World Cup win of the previous day. The company now had thirteen titles in five cities: The Star, the Saturday Star, the Sunday Independent and Business Report in Johannesburg; the Pretoria News in Pretoria; The Mercury, the Daily News, The Post and the Sunday Tribune in Durban; the Cape Times, the Cape Argus and Weekend Argus in Cape Town as well as a suite of free community newspapers; and the Diamond Fields Advertiser in Kimberley. Later, the tabloid Daily Voice in Cape Town and the very successful Isolezwe and Isolezwe ngeSonto in Durban were to be added to the collection.
For Johnson, Whitfield and the others involved in the new projects, it was a time of great excitement, but there were indications of less savoury things to come: the managers of the new company – now named Independent News and Media South Africa (INMSA) – were evidently going to keep a very close eye on the bottom line.
After the honeymoon period the owners took a sharp knife to the company’s costs. In July 1994 the Argus Africa News Service was closed after 38 years of covering the continent. The Irish management said ‘new arrangements’ would be made to cover the rest of Africa, but little ever materialised. In September 1994 the Pretoria News was turned from an afternoon paper to a morning edition and its printing press was moved to The Star’s premises in Johannesburg – a move that the Media Workers Association of South Africa (Mwasa) said ‘resulted in scores of job losses chiefly amongst printers, but also journalists and administration staff’.
Further cost-cutting plans were revealed in a series of meetings in which editors were told how badly their titles were performing. Improbable ‘benchmarks’ were constructed for just about every line in the budget and editors were directed to achieve them. Newsrooms began to shrink, juniors were bought in to replace more experienced and expensive writers, ‘centralisation’ and ‘synergy’ became buzzwords, and editors were made accountable for the business performance of their titles. This intensified when Howard took the reins from Fallon. According to company legend, he kept a graph in his office which compared the profits he delivered with those of his predecessors.
Soon editors found it virtually impossible to get the go-ahead to spend money. Howard’s weary lieutenants eventually took to giving permission behind his back. The entrepreneurial spirit which Fallon had introduced disappeared and any new idea was regarded with wariness or suspicion. Trends that were sweeping world media, most obviously the migration to digital platforms, were ignored.
Editors’ roles soon became complicated: on one hand they were trying to bring out credible newspapers, on the other to protect their dwindling resources from the cost cutting. Many were victims of the so-called boiling frog syndrome. The changes were incremental and often quite subtle – or hidden – and it was only with the perspective of time that they realised what had been done to the newspapers.
Moshoeshoe Monare was the editor of the Sunday Independent during the last years of the Irish ownership. ‘My impression was of proprietors and shareholders who had stopped caring about the business and the country and focused on return on their investments,’ he recalls. ‘With their European and other businesses facing decline, South Africa became their cash pot and they tried to extract as much as possible without any consideration for future investments, innovation or growth.’
But the positive aspect of this, he says, was that ‘they did not directly interfere in the editorial content in so far as it related to local politics. Editors enjoyed freedom to edit their papers as long as circulation and revenue satisfied the Irish greed. But the trade-off for editorial independence,’ says Monare, ‘was lack of investment or any form of retention or other rewarding schemes for editors and staff.’
In 2011 the National Treasury decided to launch a debate about foreign investment in South Africa. A discussion document called ‘A review framework for cross-border direct investment in South Africa’ was published, and interested parties were invited to respond. Mwasa replied with a ‘case study’ of Independent Media that highlighted its concerns. ‘Some 18 years after that initial investment in SA it would be hard not to conclude that INM’s ownership of the largest