MEDIA: SPOTLIGHT ON TRINITY MIRROR GROUP - Sly Bailey imposes tough love on ailing Trinity Mirror Group

Things are going to change at Trinity Mirror if Sly Bailey gets her way, Ian Darby says.

If anybody doubted that Trinity Mirror had been abysmally run, a mess of a company, its chief executive, Sly Bailey, set the record straight last week.

As her grim-faced chairman, Sir Victor Blank, looked on, Bailey gave the company she inherited in February a right old kicking.

"The national titles had drifted. It was clear that these great brands could have benefited from clearer direction and better control from the centre," she said.

Other comments were even more damning. "The culture was systematically risk averse and lacked innovation," she claimed.

Blank resisted allegations that he and his board had let the company slide under its previous chief executive, Philip Graf. He said that he had reacted by bringing in Bailey to turn things around: "Sly has made an excellent start. The board was looking for a chief executive and wanted someone with vigour, drive and fresh thinking to conduct a review of the business."

So along with Trinity Mirror's interim results (revealing a slight fall in turnover to £552 million and a 2.6 per cent rise in profits to £80.4 million), Bailey unveiled the findings of this review. Her three-stage process might sound like a strapline for a compost product ("stabilise, revitalise and grow") but is intended to bring value to shareholders first, readers and advertisers second.

This value will come at some cost. The loss of 550 jobs will go a long way toward achieving £25 million of savings by the end of 2005. Bailey refused to say where the losses would come from but confirmed editorial jobs would go. This week it was confirmed that the Welsh edition of the Daily Mirror is being scrapped and that up to 45 job losses will come from the Daily Mirror's London office.

Other key parts of her strategy involve the disposal of Trinity Mirror's titles in Northern Ireland and plans to revitalise its national titles, including an intention to return the Daily Mirror to a populist, traditional, tabloid agenda.

For advertisers and agencies interested in the fortunes of the national titles, the most significant news was that Mirror Group Newspapers needs to get closer to understanding its readers and create products they want to read.

Mark Gallagher, the head of press at Manning Gottlieb OMD, says: "The single most important thing for us and advertisers is the editorial policy that will see things through readers' eyes rather than through the eyes of one person."

At the Daily Mirror, that one person is the editor, Piers Morgan. Asked about his future, Bailey said: "I don't think we can say that any of our jobs are safe but we have no plan to change the editor."

Veiled criticism of Morgan followed: "He's a highly talented editor but I don't think guidance had been provided to him in terms of the direction of the business and my relationship with him will be very important to the paper."

Bailey talked about herself, MGN's general manager, Ellis Watson, and Morgan acting as a well-oiled triumvirate. MGN insiders say that Watson and Bailey have reined Morgan in, particularly in achieving the balance between commercial and editorial concerns, but that Morgan respects the views of both Bailey and Watson and appears secure in the immediate future.

Bailey said that the Mirror's editorial policy would mix "Beckham and Baghdad" in a bid to reverse its fortunes after Morgan's introduction of a serious news agenda caused circulation to fall below two million for the first time two months ago. She dismissed suggestions that the two million figure is all-important but advertisers may beg to differ. As Gallagher points out: "As circulation goes down, cost per 1,000 goes up."

Bailey's review makes it clear that MGN's ad sales operation will be strengthened. And improvement is necessary: national newspaper ad revenue fell by 0.7 per cent to £96.4 million while News Group (the owner of The Sun and News of the World) recently announced significant growth in ad sales at both The Sun and News of the World (4 and 8 per cent respectively).

Bailey clearly feels that the ousting of Neil Hurman as MGN's ad director and the appointment of an external replacement will kick-start some improvement.

Others are less sure. Agencies believe many of MGN's worst sales practices had already disappeared (including the habit of grafting on The People to Daily Mirror deals even when inappropriate). But Bailey hinted at creating closer relationships with key advertisers.

A key part of Bailey's message was a commitment to keeping, and continuing to invest in, The People. She slammed suggestions that The People should be disposed of: "Detractors say that we can't publish two Sunday newspapers. That's nonsense. Of course we can."

She pointed to recent improvements in The People's circulation performance and investment in editorial changes as signs of hope for the Sunday title's fortunes. Her other key promise related to the Scottish market, where she vowed to end the damaging competition war between the sister titles the Daily Mirror and Daily Record. The Mirror's cover price has been reinstated north of the border and the new Record editor, Bruce Waddell (poached from the Scottish Sun), has instructions to differentiate the paper from its sister.

Analysts welcomed Bailey's intention to "tidy up" Trinity Mirror but, given that close to half of its turnover is rooted in a steadily declining national tabloid newspaper market, there remains much to prove to advertisers and the City.