Jaws dropped when Labour peer Clive Hollick took over the Express Group.
And the strategy behind his TV acquisitions is also causing a stir.
Claire Beale talks tactics with the United chief
Friday 25th, 10am: my Campaign telephone rings.
‘It’s Clive Hollick here,’ says a voice. Then a pause. ‘We met
yesterday.’
‘Yes Clive, I remember.’
‘Yesterday you were asking me about United’s interest in HTV.’
Yesterday Hollick had almost convinced me that a stake in ITV’s HTV
licence was quite possibly the last thing on his mind. ‘Well, today we
acquired a 19.9 per cent stake in HTV.’
For such a dry stick, Hollick has sent a dazzling burst of fireworks
across the City in his time. In February he told a slack-jawed stock
exchange that his MAI Group (broadcasting and financial services) would
be merging with the Express Group. Labour peer with Tory press. The
first major cross-media merger. It was a beautiful surprise.
The HTV pounce was also a surprise. United paid pounds 73.7 million for
a 19.9 per cent stake, rendering impotent other potential bidders. What
other planned pyrotechnics did Hollick hide from me?
Thursday 24th, 11am: Clive Hollick is through the door, shaking my hand
and sitting down before he so much as casts a glance in my direction.
You read so much about Hollick’s power-obsession, playing for control
rather than participation, driven by the bottom line and disliked by
many employees. A weasel who trampled his way from French-polisher’s
son, via grammar school and Nottingham University, to City whizzkid, the
youngest ever to run a bank and, now, media mogul.
Driven - ruthless, even - are common descriptors. Instead, when we meet,
he seems rather shy, then approachable and accommodating - the necessary
truth-economy aside.
He tells me he wouldn’t call himself a great businessman. All he claims
is passion and commitment. ‘I’ve really enjoyed building these
businesses,’ he says.
You could spend days talking to Hollick about his company, his politics
and his vision for the media future. We have an hour. But we get to the
nub of Hollick’s strategy with his first few words.
‘Size and scale are a prerequisite of our ability to create a business,’
he begins. Size and clout were the major rationales for the Express/MAI
merger. United News and Media is now one of the largest media companies
in the UK. Yet, taken separately, neither its broadcast nor press
interests are leaders in their field. If the company is to capitalise on
its new-found bulk, ensuring the various divisions work together to
maximise efficiencies will be crucial.
The word ‘united’ will be key to the group’s fortunes, and strength in
unity is a theme that runs through Hollick’s business philosophy. Unity
in the newspaper division is already well under way, with Stephen
Grabiner at the helm, whom Hollick poached from the Telegraph to be
chief executive.
Grabiner pulls together the previously disparate divisions of regional
press, national press and advertising periodicals, such as Exchange and
Mart.
And it’s not just unified management that Hollick has in mind. ‘There’s
a tremendous amount of effort to co-ordinate sales, production and
marketing, without losing distinctive market positions and personality,’
he explains.
Advertisers and agencies could soon find United offering a one-stop shop
for all its consumer press display and classified advertising. And
United has already explored the possibility of a national newspaper
sales house - an abortive joint sales deal with the Telegraph is an
indication of the way Hollick is thinking.
‘We were probably a little ahead of our time,’ he says of the Telegraph
deal. ‘But to my mind, that’s the way the market is going. We shall
probably collaborate with other newspaper groups in a number of, shall
we say, non-editorial ways. It’s not a question of if, but when.’
Media buyers are a little more wary of the feasibility of a joint
newspaper sell, but if the titles fit and it saves time and money, the
general feeling is that it’s worth exploring. The Express will have to
work hard to ensure it’s not the weak link in any partnership.
Hollick is also keen on greater co-operation within ITV, where his
broadcast interests are rooted.
ITV, where Hollick has his Anglia and Meridian franchises and now his
HTV stake, is not known for its unified approach to broadcasting.
Traditionally a hotbed of in-fighting and politics, Hollick insists on
the need for a more clear-sighted and coherent approach within ITV to
meet the growing competition. ‘I feel supremely confident about ITV’s
ability to do that,’ he says.
When Hollick finally comes clean about the HTV move, he insists it’s all
about greater coherence in ITV to optimise the channel’s competitive
position. Westcountry Television is also within his sights.
Yet while many of Hollick’s ITV colleagues are united in knocking the
new competitor - Channel 5 - Hollick is sleeping with the enemy, holding
a 29 per cent stake in the upstart.
Hollick doesn’t see it that way. ‘Sure, Channel 5 will compete with
Meridian and Anglia at the margins, but that’s not a problem. I’d rather
have a stake in those businesses, even if they are competing, than have
somebody else have them.’ And as for the childlike fun and games his ITV
chums are having taking pot-shots at Channel 5: ‘I derive some enjoyment
out of it. I find it amusing.’ Is that a twinkle in his eye? I believe
Mr Hollick is chortling.
The truth is that his ITV interests are somewhat marginalised by Granada
and Carlton - which are stronger, crucially, in the airtime sales
market. Hollick’s pounce on HTV has been described as a defensive move
to shore up the position of his sales house, TSMS, in an airtime market
driven by share. Certainly, it forestalls media buyers’ predictions that
ITV sales will reduce to two sales points in the next couple of years.
But for Hollick to consolidate his position as a multi-media player, a
single sales operation representing all his media interests is not
impossible.
Hollick admits he’s looking for ways to create a greater unity between
the press and broadcast divisions. ‘That could span advertising sales,
cross-promotion and product development. We’re exploring whether there
are cross-sales opportunities and if there are, we shall exploit them.
We’ve started to do one or two things quietly, testing the water.’
Hollick won’t be drawn on what, but he is very clear about the
possibilities: ‘There is a great opportunity for these businesses to
work together.’
It’s the newly effective Broadcasting Act which makes consolidation
across media more attainable. Despite his Labour credentials, Hollick
says the Broadcasting Act goes a long way to recognising the realities
of the market.
‘The new rules allow us to look at groupings which are more efficient,’
Hollick explains. ‘I think the legislative framework is one the industry
can feel reasonably comfortable with.’
Hollick nailed his colours to the Labour mast at the age of 15 and has
been loyal ever since. Would he recommend any changes if Blair gets in?
A Labour government, Hollick insists, is not a prospect that should
worry the advertising and media industries.
‘Jack Cunningham coined a good phrase - ‘the creative economy’ - which
puts our industry at the centre of the economy, not in the frothy
margins.
‘As far as advertising is concerned,’ he continues, ‘Labour politicians
have some concerns about certain aspects, such as taste and decency. But
they also recognise that self-regulation has worked quite well. As long
as that continues, I’d be surprised if there were moves to change it.’
Hollick, and this is perhaps where self-interest really meets political
belief, identifies one clear area where vigilance is a necessity - fair
competition.
‘Full marks to Rupert Murdoch for taking an incredible gamble and having
the vision and courage to create a pounds 12 billion company out of it.
But that doesn’t justify a monopoly for life.’
‘What we can’t have is a broadcasting industry where one organisation
has its thumb on the windpipe. That is unacceptable in terms of
competition, viewer choice and the vital issue of pluralism and
diversity of ownership and voice.’
But Hollick’s vision is already stretching well beyond the British
Isles. More than half of United’s profits are generated from abroad,
mostly from the business services division, and Hollick expects this to
grow.
‘It would be rash of us to try to emulate the big Hollywood studio-based
media companies, but there are some valuable lessons we can learn from
them.’
The key, he says, is content. ‘Once you create content, once you own
property such as characters, then you exploit them in every possible way
internationally though newspapers, magazines, theme parks, TV and
merchandising.’
United already has a strategic partnership with Time Warner. The two are
developing a theme park plus movie studios in Hillingdon - the first to
be purpose-built since the war - which will make and finance its own
movies. It goes to planning this month.
With so many balls to juggle, Hollick demurs over suggestions that he
may be plotting to swap his media mogul guise for a full-time political
career, if and when there’s a Labour government.
‘I’m very committed politically, and I’m very keen to play whatever role
I can, but my priority is to really take advantage of this group we’ve
created here.’
Mind you, he seems pretty confident that Blair could make a second term.
Hollick’s own opinions on the elements of his growing media empire
Consumer publishing
This group comprises national newspapers (Express Group, including the
Express and the Star), regional newspapers (United Provincial
Newspapers) and advertising periodicals (United Advertising
Publications, including Exchange and Mart and Dalton’s Weekly).
Hollick on the Express (circulation 1,220,997) ‘We’ve made a pretty good
start. People are getting better value for money, it’s a better read and
it looks great. The Daily Mail has been remarkably successful, but it’s
done so in a vacuum. This is the first market I’ve seen where there
hasn’t been hard-fought competition. I think that gives us a great
opportunity. The Mail is a touch jaded, I think - rather out of tune
with the times. We’re going to set our own agenda and appeal to a more
modern, open-minded audience. But it’s going to take a long time. You
don’t just turn the lights on.’
Hollick on the Star (circulation 759,344)
‘The Star is a quiet success. It’s profitable, it’s growing its
circulation, it has a niche readership which it understands well - and
it’s a large niche. We’re very committed to making a success of it.’
Business services
This division comprises business magazines and exhibitions (Miller
Freeman and the recently acquired Blenheim Exhibitions), market research
(NOP, MIL), corporate communications distribution (PR Newswire) and
production and distribution of stock photography (VCG).
Hollick on Miller Freeman ‘We have people who are knowledgeable about
specific markets, such as high technology and leather. Then we develop a
whole suite of products which feed off their skills - magazines, trade
shows, news letters, conferences, seminars and market research. We’re
offering business customers a whole range of services and these promote
one another. It’s a highly efficient strategy because it gets leverage
off this pool of skills and knowledge.’
Broadcast and entertainment
This division includes Channel 3 (77 per cent of Anglia and Meridian, 14
per cent of Yorkshire Tyne Tees and 19.9 per cent of HTV), a production
and distribution joint venture with Time Warner, the ITV sales house,
TSMS, Channel 5 (a 29 per cent stake) and a stake in the new cable
channel, Rapture.
Hollick on ITV ‘Like everyone else, we’ll look at opportunities to
increase our presence and we’re committed to developing a greater sense
of coherence and a sharper focus. We’re strengthening our programming in
the Meridian and Anglia regions, though in network programming terms
we’re still small and one of the challenges is to build that up. We also
have - and this is no accident - two regions which will be the least
affected in the early years by Channel 5.’
Hollick on Channel 5 ‘It’s a priority for us right now. It will be an
extremely potent competitor for all TV channels. There’s a great
opportunity for us to offer better value for money than Channel 4 and to
counter-schedule to ITV. We’re going to give everybody a good run for
their money, though I see Channel 4 as being one of the prime targets
for us to aim our guns at.’
Hollick on digital TV ‘People watch programmes, not technology. The
question is what’s going to be on digital television and at the moment I
don’t see a killer product. Without one, digital will be a technology in
search of a market. We’ve said with both our Channel 3 and our Channel 5
hats on that we’ll continue to investigate it. But we haven’t found that
killer product yet.’
