The London Evening Standard is on track to post its biggest profit for more than a decade. So why does unease swirl among the ranks?
For those toiling away at the Standard, 2015 should be a time of unequivocal celebration. The newspaper’s move to boost its distribution from 700,000 to more than 900,000 at the beginning of last year is paying off.
Seven months into his role, Steve Auckland, the group chief executive of ESI Media, reveals ad revenues at the Standard are up more than 25 per cent since the start of its financial year in October 2014.
A series of new deals with brands including Specsavers and Virgin Media, along with more coverwraps for advertisers ranging from the fashion label Diesel to Sky and Tesco, means revenues during the past three months are up more than 40 per cent.
The success has continued online too, with a record 8.4 million monthly unique browsers in March – up 63 per cent year on year.
It seems that, some six years after the former KGB agent Alexander Lebedev described buying the Standard as "a good way to waste money" [The Guardian], the paper is becoming something of a cash cow.
"We’ve had a fantastic couple of months – it’s almost an embarrassment of riches," Auckland confirms. "The Standard is doing incredibly well. We’re really pleased with it as a product and the performances this month are just phenomenal in terms of revenues."
So why, back on the shop floor, is the pervading mood not one of jubilation? For the 330 or so staff, the year started with a round of job losses in the editorial department, totalling 18 redundancies.
The arts, culture and features sections suffered the brunt of the cuts, including the exit of the media editor, Gideon Spanier. The move was met with widespread disappointment among London’s thriving media and advertising community.
The Standard’s failure to see the value in housing a specialist for a sector that contributes more than £10 billion to the UK economy has been criticised by some as short-sighted.
Auckland was not responsible for where the axe fell – "I believe in letting the operators get on with what they want to do, and supporting them" – but he did instigate the shake-up. He’s the one getting the blame.
According to one source: "There’s a feeling he doesn’t harbour much love for the organisation. The fear is he’s trying to adopt Metro’s editorial approach to a quality evening paper that has always been very different."
Morale issues at the Standard are not likely to ease with this week’s news that a further 20 roles could be axed from the main trading team.
Auckland insists the job cuts should be viewed as a recalibrating of resources as opposed to cost-cutting, with a promise to plough any savings back into the business.
A new website is to be launched this summer and money is being spent on merchandisers to bring "a bit of theatre" back into how the paper is distributed.
Auckland was parachuted into the hot seat at the publisher of the Standard and The Independent after just ten months in his second outing as the managing director of Metro. Physically, he only moved a few floors within Northcliffe House; culturally, he made a seismic leap.
There had been mounting speculation that Auckland was interested in orchestrating a management buyout for Metro when he returned to the fray in December 2014.
But any ambitions he may have harboured were quickly curtailed when a decision was made to move Metro’s digital operation into MailOnline and its ambitious publisher, Martin Clarke.
If Auckland felt pegged back, he did not let it show. During his tenure, he reignited Metro’s print ad business: revenues rocketed by more than 15 per cent.
Then came a call from Andy Mullins informing Auckland that he was leaving his role as the chief executive of ESI Media and asking if he would like to take over. Auckland was forced to move fast if he wanted it. He was announced as the chief executive within weeks.
Kevin Beatty, the chief executive of DMG Media, which owns Metro, is believed to have been riled by the defection.
The son of a coal mine owner, it will come as no surprise to those who know him that Auckland was a sports teacher in a former life. He cut his publishing teeth at the Yorkshire Post – "a great training ground" – before moving to the capital.
Auckland is an old-school alpha male. Far harder than his predecessor, he has the directness and restlessness of a goals-oriented man who enjoys setting his own targets.
"I’m never satisfied," Auckland says. "I want to change things very quickly. With this place, I see masses of potential. I think we need to simplify the business and make everyone accountable."
As a life-long lover of football, when asked whether he’s a team player, he admits: "I’d like to say I was but, really, I’m best leading a team. I’ve always been a better captain than anything else."
Laying down his mark
One of his first moves at ESI Media was to ban the sales team from drinking any alcohol during lunchtime except on Fridays. The company-wide dictate – thought to be based on a bad experience Auckland had elsewhere – did little for him in the popularity stakes. "Outdated and unnecessary," his detractors say.
But for a man who styles himself on straight-talking leaders such as Allan Leighton and Archie Norman, this is simple business sense that has worked for him in the past.
You don’t need to be a psychologist, either, to note that such a statement at the start of a tenure sends a clear message to the group that there is a new dominant silverback in town.
Editorially, the Standard continues to take the pulse of the capital like no other. Its mix of quality local news, experienced comment and campaigning features has made the paper a staple read for more than 1.9 million commuters, according to the National Readership Survey.
Last week’s general election coverage attracted a record-high distribution of 992,411 on the Friday. The average age of its readership has dropped in recent years to an attractive 35 – seven years younger than when it was a paid product six years earlier.
Auckland says: "All the stats tell you the Standard should be number one on the ad schedules – not an add-on to the nationals for a bit of upweight in the regions.
"One in eight Londoners are millionaires. London generates 54 per cent of UK stamp duty and 85 per cent of fashion designers are based here. If you look at the creds we’ve got, it’s brilliant. We’re London’s national newspaper."
Advertisers are buying it too. Rob Lynam, the head of display at MEC, says the Standard’s scale and ABC1 readership make it a "very attractive" proposition for finance and telecoms clients.
Lynam adds that, amid double-digit circulation falls on national papers, the Standard guarantees scale as the fourth-highest-circulating daily in the UK.
The upshot, Auckland reveals, is a paper that is on track to "at least double" profits to "over £4 million" this year. It would be its most profitable year since 2001.
Elsewhere in the group, although the future of the TV station London Live looks uncertain, The Independent and i have been making gains – with notable strides online. Auckland reckons he is on track to halve losses at The Independent to less than £4 million.
This means that, for the first time under the Lebedevs’ ownership, the Standard and The Independent could collectively turn a profit in 2015. For both brands, it would be a seminal moment (with Auckland no doubt feeling vindicated). And that’s something everyone at ESI Media could raise a glass to – even if it’s not Friday.
Update: ESI Media has been in touch and assured that the number of commercial roles in consultation is 10, not 20 as stated in the article, and that Steve Auckland said: "There will be up to 10 vacancies available within the proposed new structure.