Standard boss Hardy says paper must stop losing money

WITH SALES CRASHING at a rate of up to 13 per cent and financial losses topping £10 million a year, the London Evening Standard was in dire straits last September when managing director Mike Anderson left for News International.

In our current youth-obsessed media age, Associated Newspapers management might have been expected to replace him with a young, newmedia savvy executive.

But instead they went for Bert Hardy, a man who started his career as a copy boy on the Picture Post in the 1940s and who was advertising director of The Sun when Anderson was in short trousers.

Since then, Hardy’s back-to-basics strategy, spearheaded by targeted 20p price cuts, has brought about a remarkable turnaround in the paper’s circulation story.

In February, the sales decline dropped to 3.4 per cent and next month Hardy is hopeful that, with a following wind, sales can actually grow year-on-year, helped by the 1 May relaunch in full colour.

Sales growth is a coup for any evening paper in the current climate – but London’s transient population and unique demographics make it the toughest newspaper market in the country.

Hardy says the price cuts have been a major factor – each 20p day has provided a circulation boost of between 74,000 and 90,000.

But he also believes in the value of news. “It’s been my judgment that Londoners want news. Where have all these people gone?” he says. “They are still out there, and when there is a big news story, they are still buying the paper. We have to concentrate on producing an Evening Standard that everybody wants to buy.

“You just go back and track the circulations and you can see that big stories lift the sale. It could be argued that news is not the driving force that it used to be on dailies – but is certainly a driving force as far as the Evening Standard is concerned.”

Second comeback

Hardy’s current job is his second comeback after originally “retiring” in 1994 as chairman of the Standard. He stepped down from his first post-retirement job as “caretaker” managing director of The Scotsman five years ago, after a serious illness.

Hardy became involved again with Associated Newspapers three years ago when, after recovering from his illness, “I found myself bored out of my mind.”

He phoned then Associated Newspapers managing director, Murdoch MacLennan, because, “I had heard on the grapevine there were a couple of industry jobs coming up for new contracts and I asked if he would put a word in for me… instead he said, ‘Why don’t you come and work for me?'”

So in 2002, Hardy began sitting in on Standard management meetings in addition to working on the creation of the Newspaper Marketing Association and the commemoration of this year’s centenary of the Newspaper Publishers’ Association.

Then when Anderson left, new Associated managing director Kevin Beatty asked Hardy if he could recommend anyone for the MD job: “I said yes, me, and we agreed that I would come in as caretaker managing director.”

Eight months on, that ‘caretaker’ period shows no sign of coming to an end. Hardy says: “We want to get somebody younger than me to come in – they might last a bit longer. We will see how it shapes up, I have not been given a time frame. I’d just like tomorrow, that’s all. But the action we have to take will be taken sooner rather than later.”

Over the past three years, Standard circulation has often dropped into double-figure percentage year-onyear declines.

Hardy’s brief was to “stabilise the business” – it was just bad luck that his tenure has coincided with “the worst advertising market for a long time”.

One of his first actions as MD, as well stapling the paper for the convenience of commuters, was to shake up the advertising side of the business.

Partnership deals

“When I came in we were selling via partnership deals that meant the advertising agent paid a high price to get into the Standard, but was given a lot of free space. So there was an entry price and an exit price. I changed that as soon as I came in. We went to the advertising agents and got their agreements that we should kill that method of trading and go to a more old-fashioned way of selling space, which was a price for every campaign. That has worked very well.

“The main effect that it had on us was that it meant we didn’t have to produce big papers full of free ads.”

Before Hardy came in, the Standard was frequently running to 80 pages – now he tries to keep the size constant at 64, saving money on paper.

He says: “For an evening newspaper – the speed at which that is distributed and picked up and used by readers – 64 pages is a good buy and a good size.

It’s worked well, particularly as we can do colour on every page in a 64-page paper.”

Another problem he faces is the high cost of distribution.

“As circulation has declined over the years, we have pushed the sale of the paper further and further out of London in order to find markets to compensate for the declining areas,” he says. “That’s a very expensive game. Distribution of the Standard is very expensive – we employ a lot of vans and a lot of people on the streets, as well as retailers. We will need to look at the cost of distribution and see how we can reduce that cost without jeopardising circulation. What I have to do is find ways of going back to the key areas without jeopardising sales elsewhere – and that requires a lot of thought.”

Which brings us to Hardy’s biggest challenge: making the Standard profitable. Owner Lord Rothermere underlined the fact that his publications will no longer be as cosseted as perhaps they once were when he instituted a drastic cost-cutting drive in the regional newspapers division last year, which involved widespread redundancies.

Now it seems that it’s the Standard’s turn to start feeling the pinch.

Hardy says: “It’s been making very big losses and I am charged with eliminating that loss – I’m not going to give you the figures, but I am charged with at least breaking even and that’s going to be a very, very tough task.

“There has been a culture that costs don’t matter – if you want a picture then you buy a picture, irrespective of the cost.

“I’m afraid there has to be a new culture built up in the Standard because we are all living beyond our means.

“Not enough people inside the Standard have been sufficiently informed or aware of the fact that this paper is losing a bomb and we simply can’t allow that to go on. We have to make strenuous efforts.

I believe that everybody will pull their weight.”

Hardy does not believe that the Standard should be kept afloat by its more profitable sister titles, such as the Daily Mail and The Mail on Sunday.

“We have to earn our living, we are all doing very nicely – none of us are poorly paid, but who’s going to go on paying that money? We have to make our own way – we have to take action, that means cutting your cloth.

‘Beyond our means’

“People are beginning to realise that we can’t go on living beyond our means forever. It’s a question of fact – we are spending a fortune. Particularly this year when we are in such a dreadful market place as far as ad revenue is concerned – every newspaper is having a tough time.”

Hardy declines to reveal a timescale on getting the Standard into the black, but says wryly: “I’m 77 – there is a natural timescale for me to work to.”

He adds: “If we had the same revenue that we had last year, with the cost savings we have already achieved, we would be making a profit. But we have a long way to go to cut costs.

“We were going to produce many more copies of Lite [the Standard’s free lunchtime edition] – but I said no, we will stick with 70-odd thousand, which we have done. But there are some fixed costs which I must reduce.”

Such as?

“Wages, contributions… the amount of footage which we occupy and rent that we pay – we are living beyond our means, we must find a way of getting those costs down.”

Achieving the commercial turnaround Hardy seeks could be made a lot tougher later this year when the tendering process is complete for a new free afternoon paper distributed at London transport stations.

But if Hardy is worried about a new free daily killing off the Standard, he doesn’t show it.

“Afternoon newspapers are not doing all that well right around the world. Here we are going to have another afternoon paper.

“There’s going to be no cover price revenue at all – and advertising is having the worst time that it’s had for a long time… So you are going to launch something from which there is no cover price revenue, you are going to launch it in the worst market and you are going to produce an afternoon newspaper, which are in decline around the world. I wouldn’t like to take that to the bank quite frankly.

“What are people launching it for – are they launching it because they don’t like the Standard?

Who wants to lose money just to vent your spleen against the Standard? You’re launching it to make a profit and in these market conditions, that’s going to be tough.”

Hardy has a length of top-level UK newspaper experience, probably only rivalled by his former boss, Rupert Murdoch.

When asked what he has learned, and what has changed, over his 60-year career, he says: “I could be flip and say that very little has changed – journalists are still charging more than they are worth, but that would be a little too flip, no matter how true it is.”

Hardy said he has learned that “it’s editorial creativity that drives the paper and drives sales”.

But he adds: “That editorial creativity must be provided at a reasonable cost and I don’t see, generally in the press, that creativity is in too much evidence today.

“There’s too much reliance on what is called ‘scandal’, but isn’t scandal – it’s gossip and it’s trivial gossip.”

He says: “I think there are too many people taking too big a living out of newspapers – perhaps myself included. Too many people are living too well off an industry which can’t afford them.”

Breaking unions

Like Murdoch, Hardy holds strong views about the changing role of the unions.

“The major change that there has been during my time is the breaking of the unions, the ending of their power. They were ruining our business. This industry would be dead now if greedy unions got what they wanted – more, more, more for less, less, less.

“If the Standard was controlled in the way that it used to be by the unions and losing the amount of money which we are, we would be dead – closed.

We have to be free to manoeuvre and react as the market place takes us.”

After such a long and successful career, hasn’t Hardy now earned the right to put his feet up and take things easy?

“I can’t think of anything worse,” he retorts.

“I enjoy coming in to work and I’m hugely grateful for being given this opportunity now. What else would I do for Chrissake? It’s all I know.”

He adds: “Of all the papers I’ve worked on, the Standard is the one which I find myself most fond of and most close to. The Standard is a huge, huge brand and people forget that at their peril… “I know that Mr Livingstone [London mayor] might not agree, and perhaps it is less so than it was, but I believe that it’s an honest, decent paper that doesn’t press any particular view too much.

“It’s well written and I think there are some very decent people working on the Standard. It’s a very difficult paper to get out – an evening paper doesn’t lend itself to healthy living – but everybody who works on it is aware that they are working for a decent paper.

“I’m very conscious that this a worthwhile paper to be working on and the extent to which I can do some good for it pleases me enormously.”

Bert Hardy’s
LIFE AND TIMES

Bert Hardy started, aged 14, as a copy boy on now defunct news magazine, Picture Post.

He then spent 20 years on Mirror Group Newspapers in London and the regions, rising to advertisement director at the Glasgow-based Daily Herald.

He joined Rupert Murdoch in News International in 1969 as advertisement director of the News of the World and then The Sun before being promoted to chief executive.

He left The Sun in 1979 to become chief executive and later chairman of the Evening Standard.

Hardy became managing director of Associated Newspapers in 1989 after it bought Express Newspapers’ 50 per cent stake in the Evening Standard.

He ‘retired’ in 1994 only to join Barclay brothers-owned Press Holdings as chief executive and deputy chairman, where he launched Sunday Business and oversaw the closure of The European in 1999.

He assisted with the acquisition of The Scotsman, where he acted as managing director.

Hardy rejoined Associated Newspapers in 2002 after recovering from a serious illness and was appointed managing director of the Evening Standard in September 2005.

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