SPOTLIGHT ON: MIRROR GROUP: Mirror Group mixed message obscures a strategy vacuum - Confused? You should be. Alasdair Reid attempts to separate hype from reality

We’ve come to expect confused signals from Mirror Group and last week it proved that, despite senior personnel reshuffles in recent weeks, it’s still the master. Its timing remains immaculate too - last week it also announced that profits for the year to 3 January were up 25 per cent year on year to pounds 100 million. And indeed that nice round number is perhaps the main reason for those confused - and confusing - signals.

We’ve come to expect confused signals from Mirror Group and last

week it proved that, despite senior personnel reshuffles in recent

weeks, it’s still the master. Its timing remains immaculate too - last

week it also announced that profits for the year to 3 January were up 25

per cent year on year to pounds 100 million. And indeed that nice round

number is perhaps the main reason for those confused - and confusing -

signals.



Just before the announcement, a cunning plan began to surface. Well, two

cunning plans, if we’re being accurate. And it pays to be accurate where

Mirror Group is concerned. The last time Campaign reported (in August

1998) that relaunch plans for Sporting Life (which ceased publication in

May 1998) had been scrapped, a number of Mirror Group directors and camp

followers called up to question both our parentage and our

professionalism.



We were accused of all sorts of things, from laziness to maliciousness

and an inability to handle simple facts.



So we’re happy to report this time that ... er, Mirror Group has

scrapped plans to relaunch Sporting Life. It will have something of an

afterlife though: Mirror Group intends to concentrate its efforts on

upgrading a Sporting Life website and developing its online betting

business.



The other development is potentially far more weighty - Mirror Group is

letting it be known that it will consider selling its TV interests.



These include Scottish Television, in which it has an interest through

its 18.6 per cent shareholding in STV’s parent company, Scottish Media

Group; and its wholly owned entertainment channel, Live TV.



The widespread assumption is that these two announcements add up to a

strategy. It’s all about cutting away the peripheral parts of the

business and retrenching into what it does best: good old-fashioned

ink-on-paper newspapers. And that, in turn, can only mean one thing:

Mirror Group has decided, once again, to go it alone.



Are they serious? It’s only a matter of weeks since David Montgomery was

ousted from his position as chief executive because he believed this was

possible. Supposedly, the whole world, and especially the City, knew

this was not an option. The new chief executive, John Allwood, had

barely taken control of the executive washroom keys before talks with

two serious suitors, Trinity and Regional Independent Media, had

begun.



The sale of Scottish Media Group would not amuse either suitor - SMG

also owns Glasgow’s Herald newspapers - because they are primarily

interested in regional properties and The Herald dovetails with Mirror

Group’s wholly owned Daily Record and Sunday Mail titles. Add STV and

you practically own the market in Scotland.



There are inevitably those who point to the pounds 100 million profit

figure as evidence that Montgomery was right all along. Forget strategy,

all they need to do now is dump those bits of the company that don’t

make money. Or they just don’t understand. Like Live TV.



Why then is it dabbling in the internet when it has shown that it has

never really been able to understand its lower tech predecessor, TV? And

if it’s really so hot in its core press sector, how on earth does it

explain the Sporting Life fiasco? In particular the fact that it has

killed off the wrong title, having decided to plug away with the Racing

Post?



We’ll see. In any case, Trinity and Regional Independent Media may well

have a different take on all of this. They’ve both had bids of just

under pounds 1 billion rejected, though Mirror Group has indicated that

the door is still open to improved offers. From that point of view, its

recent announcements look like nothing more than a wheeze to tickle up

more money. It’s called brinkmanship. The only way you’ll win is if

no-one has a clue about what you’re likely to do next. Mirror Group

might just turn out to be very good at that.



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