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Barclay Brothers: budding mass media owners

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Joined: 18 Jan 2004
Posts: 26
Location: London, England

Post Post subject: Barclay Brothers: budding mass media owners Reply with quote

For an example of vacuous business reporting, take a look at BBC Online's backgrounder on the new owners of the D. Telegraph group.
I suggest asking yourself: what do I want to know, when I am told I am going to get the background gen on these new mass media owners, what do I expect? I think the following would be reasonable:

1. What is their social and educational background? Nothing could be more backgroundy than that, surely.
2. In what country do they live, and what is their tax status? Pretty basic, I think.
3. Broadly speaking, what sources of capital do they use? Is there one finance house with which they are particularly associated? After all, they presumably do not conjure hundreds of millions of pounds out of thin air, do they?
4. Why would they want to own mass media? They seem to be interested historically in phenomenally dull and wonderfully profitable ventures such as exclusive hotels and catalogue sales. Why would they invest in a business which is on a downhill slope and losing 25 million pounds a year? Just an informed guess would be reasonable on this.

Will the BBC Online article tell you any of this? Wait for it...NO!

Is this not an issue central to what Medialens is all about?

The BBC Online article in full:

Until recently, it was rare to hear the phrase "Barclay brothers" without the prefix "reclusive".

David and Frederick Barclay have become notorious for their shyness about publicity, not generally a feature of media tycoons.

But they have been showing signs of creeping out of their isolation, by involving themselves in a string of high-profile deals, and even commissioning a joint biography.

If, as many expect, they achieve their aim of buying the firm behind the Telegraph, Spectator, Jerusalem Post and a string of other titles, they will become something close to famous.

Money matters

The Barclays are not orthodox media magnates.

The bulk of their commercial empire - which is said to generate revenues of $7bn a year - is in pretty mainstream businesses.

Chiefly, these are the Ritz hotel and the Littlewoods catalogue-shopping chain, which they bought last May.

They are also sitting on an unspecified pile of cash from decades of more opportunistic business deals, including property and shipping speculation, and helping finance retail tycoon Philip Green.

They appear, hedged about with many caveats and guesstimates, at number 34 on the Sunday Times Rich List, with net worth of 650m.

Into the big league

Their media interests have, so far, been fairly limited.

They were behind the ill-fated European newspaper, and now control the Edinburgh-based Scotsman group and The Business.

If, then, they get hold of Hollinger, Lord Black's international media firm, they are going to be vaulting way up into the big league.

Hollinger is best-known in the UK for the Daily and Sunday Telegraph newspapers, and the venerable Spectator weekly.

But it also owns a string of local papers in western Canada and around Chicago, and a dozen properties in Israel based around the Jerusalem Post.

From Edinburgh to Elk Valley

Which raises the question: do the brothers have the expertise to manage a group that runs the gamut from in the UK to the Elk Valley Miner of British Columbia?

The Business and the Scotsman titles have not been conspicuously successful, despite strenuous efforts to boost circulation.

And running the Telegraph right now would be a challenge: although the paper, Britain's biggest-selling broadsheet, is not exactly in trouble, circulation is slipping and advertising revenues look bleak.

Like all British newspapers, the Telegraph is struggling to secure a younger readership, but its demographic issues are more critical than most.

Running papers is an expensive and usually unprofitable business: last year, the Telegraph group lost 25m after tax.

Better bosses

The Barclays seem to be prudent proprietors, however.

They do not intend to sit on Hollinger's board, and have in the past always been willing to cede management control to trusted professionals.

They are long-term investors, too, understanding that success in the media business often arrives painfully slowly.

And unlike some of the more free-wheeling media moguls, the Barclays' finances are rooted in dull but reliable businesses such as catalogue shopping, providing at least some assurance that investment promises will be met.
Sun Jan 18, 2004 10:56 pm
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