NEWSMAKER/DAVID MONTGOMERY: Dour boss credited with revitalising Mirror Group - David Montgomery might appear a bit cold, but he’s effective. By Anna Griffiths

There’s a famous anecdote about David Montgomery. He was having his picture taken for Mirror Group’s annual report and, after clicking away, the enthusiastic photographer said: ’These are great shots Mr Montgomery, but maybe we can take one of you smiling?’ To which Montgomery replied: ’I am smiling.’

There’s a famous anecdote about David Montgomery. He was having his

picture taken for Mirror Group’s annual report and, after clicking away,

the enthusiastic photographer said: ’These are great shots Mr

Montgomery, but maybe we can take one of you smiling?’ To which

Montgomery replied: ’I am smiling.’



It is not for nothing that David Montgomery, chief executive of Mirror

Group, has a reputation as a dour Ulsterman with an enormous capacity

for work. He has been portrayed as a deft cost-cutter, a newspaper

butcher, more interested in the bottom line than investing in quality

editorial. But is this a fair picture of a man who reversed the fortunes

of a newspaper organisation which was on the point of collapse,

post-Maxwell and the pensions scandal?



Five-and-a-half-years into his reign, the company has emerged as a

takeover target worth as much as pounds 1.2 billion. That must surely

bring a faint smile, even to Monty’s thin lips.



Since being drafted in by the banks which controlled the shell-shocked

Mirror Group in 1992, the former News of the World and Today editor has

crafted the organisation into one of the most profitable newspaper

groups in the country. He has steered an uneasy course towards

diversification to try to reduce the group’s reliance on a tabloid

newspaper market where circulation is being whittled away by mid-market

and broadsheet newspapers.



Since 1994 he has taken (and recently sold) a substantial stake in the

Independent, a 20 per cent stake in STV, launched the cable channel,

Live TV, and, last year, consolidated regional interests through the

acquisition of Midland Independent Newspapers. It seems that in the

quest to find new ways of pushing the group towards its next stage of

growth, Montgomery has considered almost every kind of media venture.

Last week he was rumoured to be looking into a Scottish radio licence

bid with Chrysalis.



By 1999 he wants the company’s national newspaper business to account

for half of the group’s revenue, compared with 75 per cent in 1996. To

this end, he has split the company into six divisions: na-tional

newspapers, regional newspapers, Scottish newspapers, television,

magazines and exhibitions, and the newly created sports division. He has

said he wants to find bolt-on acquisitions, particularly on the

magazines and exhibitions side, to boost the company’s growth. But in

terms of finding an engine for growth, Montgomery’s efforts will be

limited unless, for example, the German publisher, Axel Springer, offers

a cash injection through a takeover (Campaign, 29 May).



Montgomery has found it relatively hard to find favour in the City,

despite a robust balance sheet. There is concern that while he’s very

good at economising, not enough is being reinvested in editorial

product. Paul Sullivan, an analyst at Merrill Lynch, observes: ’If

anything, he has been too focused on the cost of editorial.’ Last year

there were whispers that Mirror Group’s board were not too happy with

Montgomery’s efforts and the company’s depressed share price, suggesting

that he would soon be forced out. In recent months, however, Mirror

Group has forced critics to back down and grudgingly concede that the

acquisition of MIN was not such a rash decision. ’There is recognition

that Mirror Group is getting more out of MIN than anticipated,’ Sullivan

says.



So why is it so easy to criticise Montgomery and so hard to praise

him?



Those close to him claim he’s a man who is misunderstood. Kelvin

MacKenzie, deputy chief executive of Mirror Group, says: ’Just because

he’s not smiling every ten seconds people assume that he has no sense of

humour. Essentially, he is a shy guy which people mistake for being

aloof.’



One former colleague and friend says: ’If he was a warmer, clubbier kind

of person, he would be seen differently. He suffers from the fact that

he’s so painfully shy and socially inept. He can appear to be

appallingly rude and uninterested, but he’s none of these things. He’s

not an inspirational person. He’s a hard worker and a hard thinker,

which doesn’t endear him to anyone.’ Montgomery’s quality is his focus

and ambition to succeed in whatever he does and, though cast as

ruthless, he remains loyal to those allowed near him. ’He doesn’t

discard people or forget,’ says Christine Walker, managing partner of

Walker Media, who worked with him at Zenith, the Mirror’s media agency.

’Some might say that he is too faithful.’



But despite his faithfulness to some, it is hard to ignore the fact that

Mirror Group holds one of the worst track records in retaining

editors.



This suggests that Montgomery has not always been as clear cut on

editorial policy as he has been in terms of commercial strategy, despite

his background as an editor.



His editorial approach, according to Rosie Boycott, ex-editor of the

Independent and Independent on Sunday, and now editor of the Express, is

very hands-off. ’You could run things by him which I certainly did when

we launched our decriminalise cannabis campaign. He said to me, ’It’s

your paper, great idea, go ahead.’ It was one of the shortest

conversations of my life. The degree of being left alone was quite

amazing. You could say that’s a good thing, or a bold thing.’



Montgomery’s cutbacks at the Independent won him few friends. But one of

his allies suggests that the Independent’s other owner, Tony O’Reilly,

who is now sole proprietor of the broadsheet, was just as keen as

Montgomery in pushing for the cuts but less willing to take the flak.

’It takes two to tango. If you look at the way O’Reilly’s Independent

newspapers operate around the world, they have minimal staff, make

extensive use of PA and cut costs.’



To be forced to withdraw from the broadsheet market was not without

disappointment for Montgomery, according to Boycott, who scoffs at past

accusations that he hates newspapers. ’He always liked the Independent

and was sad to lose it but, at the end of the day, it didn’t fit into

Mirror Group’s portfolio and the sale was inevitable. He is probably

happier with tabloids than broadsheets because the latter are more

distant. He believes newspapers should talk to the readers and be

connected with their lives.’ His track record has been in tabloids, both

as an editor and manager and, in this case, it didn’t pay off to do

something which went against the Mirror Group’s pedigree.



Television has also proved difficult for Montgomery who, before joining

Mirror Group, launched a satellite channel, London Live Television, from

a desk in Saatchi & Saatchi’s offices. He has made no secret of his wish

to take a stake in ITV, but media ownership restrictions have barred

Mirror Group from such ambitions. He launched Live TV in June 1995,

which has gone on to become a strong brand in its own right, although

perhaps through notoriety rather than content.



City analysts remain unconvinced by such efforts. Sullivan says:

’Historically, it is a distraction from where the group goes.’ The most

serious threat to the channel, however, has come in the form of the

Independent Television Commission’s proposal to free up the way cable

and satellite channels are packaged for the consumer, with Live TV a

likely loser.



If Axel Springer or another major company decides to take on Mirror

Group, Montgomery may well decide to move on, feeling perhaps that he

has achieved all he can. There is already speculation that, if a deal is

struck, Axel Springer will break up the company Montgomery has so

painfully rebuilt.



He may well be tempted by the challenge of a rumoured job offer at the

cable company, Telewest. He needs a big task that he will be compelled

to see through. ’I don’t think enjoyment is his prime motivator,’

explains a close friend. ’He does things because they ought to be done.’

Well, there’s plenty that ought to be done at Telewest and in the cable

industry as a whole.



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