UK: The Davidson Interview - David Montgomery.

UK: The Davidson Interview - David Montgomery. - Even his own chairman admits that most people see Mirror Group's chief executive as a man who has horns growing out of his head. Name the insult and he's been called it, writes Andrew Davidson.

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Last Updated: 31 Aug 2010

Even his own chairman admits that most people see Mirror Group's chief executive as a man who has horns growing out of his head. Name the insult and he's been called it, writes Andrew Davidson.

If they ever ran a competition for most vilified boss, David Montgomery, former journalist and now chief executive of Mirror Group, would be a hot contender for top slot. Slated in rival newspapers for his ruthless profit-chasing, dogged in Private Eye for his humourless demeanour, derided by his peers for his cold professionalism, the short, bespectacled Ulsterman who has hauled Robert Maxwell's former empire back into the black over the past five years is clearly not a man who makes friends easily.

Even the City, which traditionally likes a cost-cutter, has been slow to warm to his achievements. When he announced record annual pre-tax profits of £82.2 million, excluding exceptionals, on a turnover of £538 million for Mirror Group in March this year (up 6.6% from 1995's £77.1 million), the share price simply slipped another 7p to 209.5p. Part of it may be the uncertain trading conditions in the newspaper market, in particular, the vicious cover price war instigated by Rupert Murdoch's News International. But there may also be something of a Montgomery factor now: he is a man with powerful enemies, having fallen out badly with at least two influential media owners, Murdoch and Lord Hollick, in his time. His newspaper rivals love to portray him as the essence of unimaginative, dour application, and regularly hint at his links to hardline Protestant opinion in Northern Ireland. Even his own chairman, Sir Robert Clark, admits that 'most people think David has horns growing out of the back of his head,' and no-one at Mirror Group knows quite what to do about it.

Pacing the carpet of his vast 20th floor, Canary Wharf office with its panoramic views out over south London, Montgomery, 48, looks a little isolated. He is hard to gauge at first, austere in appearance with his white shirt and grey suit, and cold in manner, with an off-putting way of tilting his head slightly and staring with wide, dark eyes, like a curious cat. He speaks softly, answering questions with cautious precision, underscored with a dry sense of humour. Caution is probably second nature to him now.

Barely a month goes by without a derogatory story about him appearing in newspaper diary columns or Private Eye. He says he has long since given up trying to get a fair press. He is just surprised, he adds, that newspaper editors think their readers are interested in the endless jibes about him.

There is only one important fact, he goes on, and that is that Mirror Group, publisher of no less than eight national newspaper titles, is thriving, despite extremely difficult conditions (on top of the circulation war, it had to absorb a £20 million price hike in the cost of news-print in 1996). The company is now, he says quietly, the most effective manager of national newspapers judged by return on capital. Unfortunately, it is a claim that is difficult to check as Mirror Group is the only national newspaper outfit which publishes a totally transparent set of accounts.

Ironically, rather than working in its favour, Montgomery says it actually makes the company, which includes in its stable the Mirror, the Independent and the Independent on Sunday, far more vulnerable to criticism than its rivals.

He says he has always been interested in the commercial side of newspapers, ever since he first wanted to be a journalist. He was brought up in Bangor, a Belfast dormitory town and seaside resort on Northern Ireland's east coast, very anglicised (that is, Protestant) and popular with Scottish holiday-makers before the Troubles. His father worked for the electricity board, his mother was a devout churchgoer. Both had a strong work ethic and a firm belief in education. He was the first of his family to go to university, Queen's in Belfast, where his younger brother Ian is now professor of animal ecology. Both boys got their ambition from their parents, who were determined that their sons should make something of themselves. The community ethos - 'work-hard-say-your-prayers-and-die' - also helped.

It was the kind of spirit, he says, which has sustained all the communities in Northern Ireland through a lot of the Troubles. 'No one thought that you were put on earth to enjoy yourself,' he adds, wryly.

He started as a sub-editor on the Daily Mirror (one of the recent Montgomery innovations has been to drop the Daily from the title) in 1973. From there, he moved to the Sun, and then the Sunday People, developing a reputation as a ferociously hard-working but distinctly unclubbable young man. In 1984 he caught Rupert Murdoch's eye and became assistant editor on the News of the World. By 1985, at the age of 37, he was editor. For most journalists, that would have been enough. But Montgomery had decided he wanted his own newspaper, with his own power base. As he tells the story, he had already put together an unsuccessful bid for Express Newspapers, backed by City investors, when his attention turned to the ailing Today newspaper, then owned by Tiny Rowland. Montgomery tried to buy it, was outbid by Robert Maxwell, and then went in again in 1987, this time batting for Murdoch. 'Maxwell boasted to Rupert that he had got it. Rupert said to me, "I want it, get it for me". So I ended up buying it for him at seven times the price I had originally negotiated for myself. That shows you how brilliant Tiny Rowland was at deal-making,' says Montgomery.

It also confirmed Montgomery as more than just another ambitious editor.

Murdoch didn't seem to mind the extra cost, rewarding Montgomery by making him managing director of the paper as well as editor. He spent four years running Today, successfully boosting circulation though never really achieving commercial stability or winning over a sceptical staff. They nicknamed him Rommel, after field marshal Montgomery's most famous opponent in the second world war. It was a typical bit of perverse journalistic logic, the joke being that 'Monty was meant to be on our side'. The nickname stuck, but obviously doesn't irk Montgomery too much. Outside his office hangs a large, framed photomontage of a tank in the desert, with his head popping up through the top.

For a time, Murdoch and Montgomery were close, and many have since noted that Mirror Group has become something of a Wapping-in-exile. Four of the company's directors - John Allwood, Charles Wilson, Kelvin MacKenzie and Sonia Land - are ex-Murdoch people. And those who have worked for Montgomery say he has taken on a few of the traits of the News International boss, like wandering in, unannounced, onto the newsroom floors, a feat he manages by running up the internal stairs at Canary Wharf rather than using the lift.

Montgomery says that the News International link is inevitable, as the newspaper world is a small one dominated by a few big companies, but also admits he likes executives who understand the Murdoch mind-set. 'People forget that Rupert comes from the same background as I do: Scots Irish.

He comes from a long line of Presbyterian ministers and the generation before his grandmother had been in Northern Ireland. None of my forebears were in the Orange order but some of his were. The strong Protestant work ethic is reflected in Rupert, that driving force is important, he is an inspirational leader and he is a great decision-maker, very quick-witted.

There are other sides to him which are not so attractive ...' Such as?

Montgomery smiles tightly. 'Well, it is said that everyone at News International has a sell-by date on their forehead.'

Certainly, Montgomery found his time was up in 1991 when he was eased out of the emperor's circle. He left Today angrily after his attempt to organise a management buy-out of the paper was rebuffed. He had a stab at setting up a London television channel, which never got off the ground, and dabbled in regional newspapers. Then Robert Maxwell fell off his boat and a new opportunity presented itself. Montgomery, instantly on the phone to potential backers at Mercury Asset Management (MAM), was one of the first predators to emerge. Then MAM pulled out, he was handed over to Hambro's, administrators were brought in at Mirror Group Newspapers (as it then was), bidders were told they had to buy all or nothing, and no one knew just what kind of liability hung over the company from Maxwell's plundering of the pension fund. In short, it was a mess. In the end, Montgomery impressed the new chairman, Sir Robert Clark, so much with his plans for revamping the company that, instead of buying a chunk, he found himself being interviewed for the vacant chief executive slot. 'He was,' remembers Clark, 'simply very knowledgeable about us and what needed to be done. He had worked out a very detailed plan, which he has stuck to, and he was a very good communicator.'

So he got the job. It was an adroit bit of foot-work, slightly fumbled at the last minute, when Montgomery found himself in position, sacking senior executives, before his appointment had even been announced and while some non-executive directors were still trying to block it. It was that, more than anything, which cemented his reputation as a slightly sinister, behind-the-scenes operator. Within weeks, the editors of the Daily Mirror and the People had been replaced. Stringent staff cuts were introduced. It was a style that appalled some, and is believed to have engendered the change of heart that turned Lord Hollick into a fierce critic. That style, for sudden sweeping changes and cost squeezes, allied with his icy professionalism and Belfast roots, has made Montgomery an easy target for journalistic jibes. In a famous episode, one former editor is said to have likened him to the kind of Ulsterman you would find 'in a balaclava' on the Shankill Road.

Five years on, Montgomery is still striving to prove that he is more than a sack-and-slash manager. Slowly, he has tried to rebuild the group.

He has bought a small chunk of Scottish Television, the ITV broadcaster, and a 46% stake in the Independent titles, which ran at a £10 million loss last year. He has also launched L!VE TV, a national cable channel which will incorporate city station opt-outs (local-based programming) and has cost around £24 million so far. It has reached 1.7 million cable homes and earned around £5 million in revenue last year. All that is propped up on the back of Mirror profits.

Last year he bought Century Press, publisher of the Newsletter, Northern Ireland's third-largest circulation newspaper, and specialist sports agency Reg Hayter. There have been rumours of deals with regional publishers and even of buying into football clubs.

But much of Montgomery's energy still appears to be put into constantly slimming down and reorganising the group's existing set-up. He has relaunched the Mirror, and shuffled his editors. He has held the group's full-time staff level to around 3,000. He has consistently pushed through new ways of working. Inevitably, such moves have made Montgomery a deeply unpopular boss with some ex-employees, who note his £473,000 pay package and the £1.4 million he made from selling share options in 1996, and argue that his efficiency drives and demand for populism have cynically undermined the famed campaigning zeal of Mirror newspapers. The Daily Mirror's now-notorious, anti-German edition, published during Euro96, met universal criticism last year and in February this year an ITV documentary by John Pilger, charting the decline of the paper, savagely attacked the Mirror Group. Montgomery says the documentary didn't agitate him.

'I think it was just one man's rather jaundiced view,' he says, before adding that the Mirror is a far better paper today than it was in Pilger's era. 'I mean, the management he was so enamoured with managed to sell the Sun to Rupert Murdoch, the biggest newspaper mistake of the century.'

Anyway, he says, he doesn't want to dwell on the past, he wants to push forward. Next, he wants to continue the newspaper revolution by re-examining the whole way in which his titles are put together. Those who have watched Montgomery reduce staff relentlessly on his newspapers presume he is moving closer to what is referred to as 'neck-up' publishing - having titles run by a handful of key senior staff who buy everything in. Can he do it? He winces slightly as he explains. The issues, he says, are much more complicated than anyone has been willing to tackle so far.

Newspapers, he continues, are plagued by 'duplication', with writers, subs, designers and editors all working on the same stories, and executives frequently commissioning pieces they never use. 'We want to analyse our structures in the light of technology which was introduced 10 years ago but hasn't been exploited to the full. It has not led to individual journalists having full responsibility for all aspects of the newspaper.' Instead of individual titles having staff reporters, he envisages a pool of specialists who can contribute to all Mirror Group titles. He has already looked at deals for pulling in information from the regions, and signed over the Independent on Sunday's Business Section to the financial agency, Bloomberg.

He won't give any more detail of what is to follow, but says it will mean having fewer journalists, earning more, on each title.

But many in the industry are still sceptical about Montgomery's innovations.

They point out that he might be good at saving money but he has a poor record in boosting circulation. His titles might reverse their sales decline (the Mirror, once a four-million seller, is now around the two-and-a-half-million mark, the Independent and Independent on Sunday sell less than 300,000 copies each) if he invested in a bit more quality. Analysts also contend that Mirror Group is currently too narrowly based to prosper in the global media market of the 21st century, factors which have undoubtedly dented its stock in the City (and thus made it even more difficult to grow by acquisition). Montgomery acknowledges that, but points out that he is locked into a particularly vicious circulation war without the flexibility of his rivals.

As a commercial manager, rather than a proprietor, he has to give a proper account to shareholders.

'What we need to do is put as much into the product as is necessary to evolve it and enhance it and sustain long-term profitability and grow it for as long as possible without overspending on those processes. If you overspend, you won't get back a return. Therefore Mirror Group has determined to put money into its businesses, and keeps re-investing in its core newspapers, but not in such a way that it undermines profits in both the short and the long term. It's a very fine balance. And I think it's true to say that the amount of money being put by other publishers into cover price cuts, for instance, will not be returned to them.'

And despite the price war, his circulations have remained 'robust', he says. 'The rate of decline of all our titles has been moderated. And we have continued to sustain our prices, despite the fact that the Sun is 22p, and 10p on Mondays, and the Express and Mail are 20p, which is ridiculous.

This sort of predatory pricing is not only expensive but it is unlikely they will get a return. In many other countries it wouldn't be allowed.' Murdoch's intention, he says, is simply to drive rivals out of business.

'He doesn't believe in gain unless it causes some pain,' says Montgomery, grimly. Perhaps he means it the other way round, but he doesn't look it.

Yet some contend that much of Montgomery's management smacks of desperate measures. The company has been slated for the showbiz fixation of the new Mirror (on the morning we met, its front page lead was 'Caught! Eamonn And His Mistress' about a television presenter's sex life), and broadcasting critics have been equally severe in their judgments on L!VE TV. The channel, run by former Sun editor Kelvin MacKenzie, has promoted itself with ideas like Topless Darts and News Bunny (basically a man bouncing round in a bunny suit next to a newsreader), yet still has only a minuscule audience.

Has he misjudged the market? No, says Montgomery. 'We are only being derided by people who are our commercial rivals in newspapers, who have an axe to grind, and conventional TV companies, who don't like the fact that we do it more cheaply than they do. Of course, the luvvies criticise our output because it is beneath their dignity. But frankly who watches their output?'

Well, millions of viewers in Britain. No, says Montgomery. 'It is inflicted on the British viewer who has always had little choice. But the broadcasters never sell it elsewhere.' Rubbish, I counter, there is even a story on page three of the Independent that very day about the BBC's record overseas sales. Explain that? Montgomery looks momentarily taken aback but proceeds: 'No British TV series has ever been on an American network. Never. What they do is all go off to Cannes and Las Vegas and parade around like media moguls but they never sell anything of significance. They show BBC shows on public service broadcasting with sub-titles.'

But Topless Darts? 'They are late at night,' says Montgomery, 'and there are things being done on UK Living (another cable channel) and on the adult channels that are much worse.' Yet isn't it odd that Montgomery, with a devout religious upbringing, should be peddling this stuff? And doesn't he get depressed at the hostility it provokes, to add to the animosity that people already feel toward him personally? He says not, but others close to him believe it must have an effect. 'I think it must get to him as much as it does to any human being,' says Charles Wilson, Mirror Group managing director, 'but he just has to allow it to slough off him'.

It's not that easy when you eat, drink and sleep business as much as Montgomery does. He says the image of him never relaxing is wrong. He escapes by playing tennis - badly at the public courts in Ealing - and listening to opera. He then surprises me by adding, with a wicked grin, 'I like gurrrls, too'. Seeing my consternation, he looks embarrassed and explains that he means spending time with his nine-year-old daughter and his new partner's three children. What else? He has also bought a house in Umbria but hasn't managed to spend more than three nights in it yet. He doesn't, he says tellingly, like to be out of touch with the business for too long.

The interview over, he asks me to be careful how I describe his current family situation. He suggests that I skimp on the details and say that, after going through a sticky patch when he left his wife, he has a 'settled family life' again. On reflection, you might think this plea for discretion rather rich coming from a former editor of the News of the World, but Montgomery's life is such a goldfish bowl that presumably anything can be used against him. Doesn't he worry that he is so unpopular? He puzzles over the question then gives a tight smile. 'I want to be popular with the shareholders,' he says.

'And I'm afraid there's only one way to their hearts and that's the creation of value for them. I will do what's right.'

BIOGRAPHICAL NOTES

1948 Born 6 November

Educated Queen's University, Belfast

1973 Sub-editor, Daily Mirror, London and Manchester

1978 Assistant chief sub-editor, Daily Mirror

1980 Chief sub-editor, the Sun

1982 Assistant editor, Sunday People

1984 Assistant editor, News of the World

1985 Editor, News of the World

1987 Editor, Today, and managing director, News UK

1991 Chief executive, London Live Television

1992 Chief executive, Mirror Group Newspapers

WHAT PEOPLE SAY

'Rivals never miss a trick. They portray him as a demon. Most people think he has horns coming out of the back of his head, when really he is a reasonable, modest, likeable man.'

Sir Robert Clark, chairman, Mirror Group

'He's very good at saying whether a paper is right for its readers or not. He has certainly been tutored in the Murdoch mould, but he has never quite shown the brilliance that Murdoch has.'

A senior journalist who has worked for both Murdoch and Montgomery

'His talent is not as a journalist but as a businessman - he could carve out a profit in any environment.'

Roy Greenslade, ex-editor of the Daily Mirror

'I think his closeness to the City is one of his great strengths. He understands them, and in general they like him.'

Charles Wilson, managing director, Mirror Group

'There is a great deal of admiration in the City for David's ability.

The poor rating is simply because of the uncertainty over what Mirror Group does next.'

Antony Beevor, Executive Director, Hambro's plc

'Work is an addiction to him. He is like a man who is hooked. It makes you wonder what he does with his emotional life.'

A former colleague.

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