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Police arrest four, including Tina Weaver and serving Mirror Group editor

March 14, 2013

Tina WeaverWhatever took them so long? Plod has finally pounced on four miscreant Mirror Group journalists in a dawn raid conducted by the Weeting (phone hacking) team. And what a haul it has proved to be.

The four include the first serving editor to be arrested: James Scott of the Sunday People. Better known is one of the Street of Shame’s favourite hackettes, Tina Weaver – former editor of the Sunday People. The other two are Mark Thomas, former editor of the Sunday Mirror; and Nick Buckley, current deputy editor of the Sunday Mirror.

Senior Trinity Mirror Group management – notably chief executive Sly Bailey and her successor, ex-HMVite Simon Fox – have long been in denial about a phone-hacking scandal within Mirror group portals. A denial which, though oft repeated over the past two years – notably during the Leveson Inquiry – seems to have deceived no one but themselves.

Over 18 months ago, Louise Mensch – a former MP who sat on the House of Commons media select committee – openly taunted Piers Morgan – once editor of the Daily Mirror, but now the fabulously remunerated host of CNN’s prime-time talk show – with complicity in a phone-hacking scandal involving Ulrika Jonsson’s affair with former England football manager Sven Goran Eriksson. Morgan furiously rebutted the accusation, but was reduced to fuming impotence by parliamentary privilege – the one thing protecting Mensch from being on the receiving end of a colossally expensive and probably indefensible libel suit. Later, she did make a mealy-mouthed apology. Sort of.

Few doubted that Mensch was on to something: it seemed highly improbable that Mirror tabloids were entirely immune to the hacking contagion that had reduced Rupert Murdoch’s News International to its knees. What was lacking was context and a basis in fact.

Piers MorganWe now have that, at least in outline form. And it should be said straight away that the facts do not in any way implicate Morgan. The statement from the Metropolitan Police makes this quite clear: “It is believed [the conspiracy] mainly concerned the Sunday Mirror newspaper and at this stage the primary focus is on the years 2003 and 2004.”  True, that does not exclude Morgan by date (he was editor of the daily title from 1995 to 2004), but there has been no mention of – still less arrests of former employees at – the Daily Mirror so far.

Nevertheless, I imagine Morgan will be anxiously reaching for his lawyers, lest the net spreads further.

Ironically, Trinity Mirror has just reported better than expected results, showing Fox’s cost-cutting measures are doing their work. How much damage the arrests – and those likely to follow in their wake – will do to TMG’s share price remains to be seen.

UPDATE 19/3/2013: Morgan’s insomnia will not have been improved by the news that Richard Wallace, a former Daily Mirror editor (and long-term partner of Weaver), has also been questioned by the Weeting team.

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HMV outfoxed by Dixons recovery story

January 6, 2011

It’s probably just as well I can’t remember the name of the national newspaper pundit who, only the other day, tipped high street retailer HMV Group as one of the hot recovery plays for 2011. Yesterday, its already severely mauled share price – down 80% in the last year – lost a fifth of its value on news that like-for-like sales over Christmas had been abysmal, and that the company was going to have to sell off 60 of its stores as a result. Not that I had invested. If I were to take a punt in this sector (which I’m not), I would select Dixons – which has some interesting parallels to HMV. But more of that later.

Simon Fox, HMV’s dynamic chief executive, started out in 2006 as a latter-day Prometheus; now he resembles nobody so much as Icarus. HMV has pleaded it had an awful end to the season (which it did). But then, so did everyone else, and look what that didn’t do to John Lewis sales over Christmas. Behind mitigating excuses lies an increasingly sad reality: HMV’s visionary strategy for coping with drastic structural change brought about by the internet has failed.

“Sad” because if anyone was equipped to bring off mission near-impossible at HMV, it was Comet-bred Fox. Fox has shown a gamut of qualities infrequently found in one chief executive: drive and leadership (of course), imagination, flair, tenacity. It’s not as if he hasn’t had some decent job offers along the way, too. The stewardship of ITV – we now know – was not the nightmare it then appeared, and helming the media company’s turnaround would have brought recognition and reward far in excess of anything Fox could ever earn at HMV. So, to that list of qualities we should perhaps add loyalty.

Unfortunately, the feat at HMV seems to have been superhuman – beyond even the powers of a demi-divine titan. In the bid to address the classic “clicks and bricks” dilemma facing legacy high street retailers – particularly those involved in the technology and entertainment sectors – Fox has scored highly rebranding HMV as an online brand, but stumbled on one of the basic precepts of his trade: retail is detail.

We can admire the strategic vision of recasting the core gaming and DVD area – together with a new co-venture into cinemas – as ‘screen-based entertainment’. We can appreciate the imaginative logic of introducing fashion lines into the high street offer. We can even sympathise with Fox over the catastrophic decline in CD and album sales generally – which has far outpaced predictions. But, oh dear, what about customer service? Judging from online commentary, not from the commentariat but the general public, HMV has become a byword for ignorant, unhelpful, under-manned and under-managed frontline staff. Only in part is this down to cost-saving retrenchment, which has squeezed numbers and forced out experienced (and therefore more expensive) sales people. Oddly, this shortcoming seems to apply only to the HMV arm of the group. At Waterstone’s – similarly ill-favoured by the e-commerce revolution – the lesson has been learnt that solicitous attention to customer needs is an integral element of post-digital survival in the high street. No coincidence, perhaps, that the book shops have weathered last year’s turbulent conditions rather better than the music and DVD side.

It’s not something that has gone unnoticed at Dixons – not so long ago the uncontested winner of the wooden spoon award for customer service. Like Fox, Dixons’s chief executive John Browett is a retail high-flier. His previous employer Tesco – which he left in 2007 – valued him so highly it would not let him stop working a day before his gardening leave was completed. In some ways, Dixons (then DSG) was in more of a mess than HMV Group when Browett joined. In a knee-jerk reaction to the internet, it had unwisely relegated the historic Dixons brand to an online presence (airports excepted) and confused the high street offer with a Currys.digital rebrand. Browett has managed to unwind most of this, regrouped the Currys and PC World brands under the Dixons monicker, streamlined the consumer electronics offer (with such rabbits out of the hat as an exclusive distribution deal with Apple over the iPad launch) and, most importantly, perhaps, embarked upon a massive staff retraining exercise. Halfway through his four-year turnaround programme, Dixons appears to be heading for a profit. We’ll have to see whether Browett maintains the momentum in 2011. But from the present vantage point, Dixons appears a much better recovery play than HMV Group.


Low Grade performance at ITV

October 17, 2009

GradeIt’s a bit rich of Michael Grade, outgoing chairman of ITV, to blame the media for a mess substantially of his own making.

Here’s a sample of Grade in action. Asked by Lord Fowler, chairman of the House of Lords communications committee, whether he was surprised about the length of time the process of finding a successor was taking, Grade replied as follows:

“What surprises me is the extent to which this has been played out in the public arena, which is unfortunate. We are certainly not short of advice from our colleagues in the fourth estate. Coming into work each day, I feel as though I am inhabiting a parallel universe…the ITV business is going very well.”

Really, Michael? If it were going that well, you would still be in a job and we would be deprived of a riveting media circus, featuring acts of startling incompetence by leading ITV executives, non-executive directors, head-hunters and, last but not least, ITV shareholders. Thank goodness some of the people below board level seem to know what they are doing.

Unpicking all this: once Grade’s ‘high-production value’ strategy was poleaxed by the recession, he was toast. Herein lay the first problem, because he then proved as amenable as a sea anemone asked to vacate its favourite rock at low tide. All right, he’d give up day-to-day management as chief executive, but he was going to cling on to being chairman come what may, albeit of the non-executive variety.

Grade’s contempt for corporate governance (the Higgs Report specifically calls for the roles of ceo and chairman to be split in public companies) is a lesson for us all and Sir Stuart Rose at Marks & Spencer in particular. Allowing Grade to combine the two roles in the first place was a fiasco in the making for which the ITV board and shareholders must also bear responsibility.

We are now seeing the results of that misjudgement played out. Grade, in staying on, evidently hoped to persuade some youngish, pliable patsy with digital experience to be chief executive, while he continued to lord it over the board. Simon Fox, ceo of a resurgent HMV, self-evidently had the digital experience, but proved no one’s patsy when he turned the job down. Matters were not helped at this juncture by a group of self-appointed ‘activist’ shareholders (Legal & General, Brandes and Fidelity), who insisted on having Tony Ball as ceo come hell or high water.

Ball is an able executive, who did well at BSkyB. But there were two things wrong with his candidature from the start. To begin with he is very greedy. His demands (a package of up to £30m over 5 years was reported) were politically unacceptable in the present climate and caving in to them would have made Sir James Crosby, the ITV non-executive director charged with finding a Grade replacement, look even more foolish – if that were possible in the wake of his ill-judged escapades as HBOS chief. Then again (not that this troubled our militant shareholders), no one who actually worked at ITV seemed to want Ball. Why? Because it would be like letting Alaric the Goth into Rome: after comprehensive sacking, the place would never be the same again.

As it turned out, these anxieties were academic. Ball over-reached himself, not only with the grossness of his financial demands, but in his determination to put his stamp on Grade’s successor as non-executive chairman. Only then did the ITV board and Russell Reynolds the headhunters seem to wake up. They’d got it all topsy-turvy: sure, they needed to replace Grade, but it was the wrong Grade they were replacing. Grade the chairman should have preceded Grade the ex-ceo. Duh! At least Grade has now had the grace to do what he should have done months ago: step down unequivocally.

Has the selection “committee” learned anything else from its mistake? Not really. Shareholders still seem set on a deluded course of appointing a chief executive whose brief is to be “anyone but ITV chief operating officer John Cresswell or any other ITV insider.” If I were Cresswell, I too would be leaving – having been bridesmaid at too many weddings.

Which is unfortunate, since Cresswell is rapidly emerging as the only sound candidate for ceo by default. Anyone who, like me, has grown a little confused about who remains in the race would do well to turn to Mediaguardian, where they will find a handy visual device entitled The Big Cheese Chart. It’s a perceptual mapping graph that plots the fortunes, or otherwise, of those who are contending for the crown jewel roles at ITV and Channel 4. To outward appearances, the process of digging ITV out of the mire looks stalled. All the credible City types selected by shareholders as suitable chairmen have ruled themselves out, with the exception of former BBC chairman Sir Christopher Bland. And without a chairman, there can be no hope of a chief executive either.

Interestingly, given the unpromising turn of events, ITV’s share price has soared 16 % this month – well above the market average. I would put this down less to the fact there is about to be a resurgence in the media sector’s fortunes and more to the fact that ITV has become such a basket case that only a takeover of some sort can solve its problems.

The question is, who would want to take it over? Whoever these people might be, they’ve already missed a bargain-basement opportunity, when the ITV share price was in the low 20ps earlier this year (it’s now back to about 50p). And that’s not even to consider any other obstacles in the way. Such as: ITV no longer has a USP, it has no credible digital strategy, a huge pension deficit and an over-manned sales force.


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