Anti-terror law reviewer David Anderson QC says broadcasters should decide whether to show radicals on their channels
Radical speakers such as the Islamist preacher Anjem Choudary should not be banned from appearing on television, the independent reviewer of terrorism legislation said on Wednesday.
David Anderson QC, who reviews the government’s anti-terror laws, said it should be up to broadcasters to decide who appears on their channels.
Broadcasters including Channel 4 and the BBC were criticised last week for giving Choudary airtime in the wake of the Woolwich attack and it has been reported that extremist preachers could be banned from television under new powers for Ofcom.
But Anderson said if extremists were banned from television, it would risk sanitising them.
He told BBC Radio 4’s PM programme: “Perhaps I’m old fashioned, I’m a great believer in the marketplace of ideas, the good ideas drive out the bad.
“It’s important to give these people a hard time and to expose to the audience the sort of things they have been saying when they have not been wearing a tie in the television studio.
“But subject to that, let them be heard, and the risk of not letting these people be heard in all their glory is that you sanitise them, and that people don’t actually realise how extreme they are.”
Asked if there was an “incitement factor” on television, he said: “If you’re talking about Anjem Choudary, various organisations that he has been instrumental in founding have indeed been banned as organisations that promote or encourage terrorism.
“It hasn’t happened to him, he hasn’t been prosecuted on that basis.
“For someone who is a member of society, free to speak, I think one has got to allow him to speak, one has got to test very severely what he has to say, and one has to discredit his ideas.
“One can think about the high-profile extremists in respect of whom that’s been a pretty effective process.”
New figures published by Harriet Harman show 82% of presenters on TV over the age of 50 are men. Which broadcasters are best and worst?
A shocking 82% of broadcast presenters over the age of 50 are men, new figures have revealed. The research released today by deputy leader of the Labour party, Harriet Harman shows even though the majority of over 50s in the UK are women, the overwhelming majority of TV presenters over that age are men.
Harman, who also holds the posts of shadow deputy prime minister and shadow culture secretary, wrote to the six major UK broadcasters; BBC, ITN, ITV, Channel 4, Channel 5 and Sky News, to see how many women they employ on screen, behind the camera and how many of those are over the age of 50.
“The figures provided by broadcasters show clearly that once female presenters hit 50, their days are numbered,” said Harman who is due to hold a roundtable with broadcasters in the House of Commons today. Although Harman does believe that the production of these statistics from the broadcasters shows promise and is “encouraging”, she also thinks there is “a combination of ageism and sexism that hits women on TV that doesn’t apply to men.”
The figures shine a light on an issue that broadcasters have faced increasing criticism for. Back in 2011, axed Countryfile presenter Miriam O’Reilly took the BBC to an employment tribunal for age discrimination and won her case.
37% of the total workforce, both on and off screen are women over the age of 50, according to the aggregate data. And whilst TV presenters under 50 are generally representative of the gender balance in the UK population (48% of presenters under 50 are women compared to 49.7% of women under 50 in the general population), when it comes to female TV presenters over 50 this drops to just 18%.
So how do the figures break down by broadcaster? Only 9% of presenters over the age of 50 at the Sky News are women, not exactly fitting with their viewing demographics; average age of viewers is 46 and 38% of viewers are female.
However, this is still a far better result than either ITN or Channel 5 can boast with zero. ITV recorded the highest percentage as 55% of their presenters over the age of 50 are women but as the release does note, ITV only provided percentages and no raw numbers.
The BBC, though, have complicated matters by including on-air radio presenters in their response to Harman. If they respond again with more accurate figures, we’ll update the post, but are using what we’ve got for now.
If we’re to turn our attention to the total workforce, both on and off screen, then the percentages for women over 50 are much higher. 46% of the total workforce at Channel 4 are women over 50, 37% at the BBC and 24% at ITN. No data was received from Channel 5, ITV or Sky News.
The table below shows a summary of results. Please note that as Channel 4 have no in-house production base, they do not produce, develop or appear in their programmes and therefore were unable to provide on-screen statistics to the commission. The full data is available in the downloadable spreadsheet.
Download the data
To get the service, customers will have to take the supermarket group’s line rental at £14.90 for a minimum of 12 months
Tesco has cut the price of its unlimited broadband to just £2 a month, which the supermarket chain claims is the cheapest unlimited broadband that doesn’t involve paying for an additional service.
To get the “unlimited” broadband service, which also includes free evening and weekend calls, customers have to take Tesco line rental at £14.90 a month for a minimum 12 months. They do not, however, have to sign up for a TV or mobile package.
Tesco customers will also receive one Clubcard point for every £1 spent and benefit from a UK call centre offering free technical support.
The deal is only available in the areas covered by its network, which represents 70% of UK households.
The unlimited offering comes with a fair use policy, which the company said would not affect anyone but the heaviest of downloaders.
It also said that those switching to its service could leave within the first three months without penalty under the terms of its “happiness promise”. Tesco Mobile customers are eligible for free Tesco broadband for 12 months.
The move is the latest in what is becoming an increasingly frenzied broadband market.
On Thursday, BT sent shock waves through its rivals when it announced it would offer its new sports channels – complete with Premier League football – for free to anyone taking its broadband offer. It has various deals on offer and will be tempting to sports fans.
TalkTalk has a half-price broadband offer (£3.25 a month plus for £14.95 landline rental). Sky has a similar offering too, while Virgin’s superfast service is currently offering half price broadband for six months.
Customers looking to switch should now get a home phone, unlimited broadband and all day calls for around £23 a month. If you are paying significantly more than that now could be the time start looking around, although you can expect some further price changes from rivals in the coming months.
A Tesco broadband spokesperson said: “Slashing our broadband prices again this year means that for just £2 a month British families can download music, play games online and stream films to their hearts’ content.”
Before you sign, check the speed you will get using the availability checker on its website. The offer is open until 30 June.
• You can compare phone, TV and broadband packages using the Guardian digital comparison service
Shopping expert yet to visit four centres which worked away from the camera, while others have had weeks of TV attention
The shopping expert Mary Portas spent weeks filming attempts to revive high streets in three of the locations chosen to pilot the retail “revolution”, but some others who worked away from the camera have not yet received a visit from the TV star, documents obtained by the Guardian reveal.
A series of freedom of information requests show that of the first dozen “Portas pilots” – shopping centres chosen last May to receive £100,000 each of state support and advice – five got walkabouts where Portas spent a few hours touring the high street, four got no visit at all and two featured in hour-long TV reality shows as part of the Channel 4 series, Mary: Queen of the High Street. Croydon, picked in the original wave of pilots, did not respond.
When Grant Shapps, the then local government minister, wrote to Portas in February last year he said he hoped her “help and expertise will be extended … to those pilots that do not feature in your show”. Last June an executive from Mary Portas’s agency emailed civil servants saying “arrangements are also being made for the pilots to meet Mary and her team in their towns in the months to come”.
A spokesperson for Portas said her office had “contacted all 12 of the first pilot towns chosen by the government to arrange a visit. To date, nine visits have taken place, including seven from the first round of pilot towns. These visits have been arranged around her other substantial commitments.”
However, the responses from councils show that Portas has not yet visited pilots in Bedford, Newbiggin by the Sea, Stockton-on-Tees and Wolverhampton. Joanna Wake, chair of the Stockton-on-Tees town team, said it had “got on with the job without Mary. We’ve had street food festivals, flash mobs and got free Wi-Fi in the town centre cafes. She had a TV show to make. The film crew did scout the town but said there was too much building work going on in the high street.”
The government has funded two rounds of pilots. As well as the cash, the first 12 were promised Portas’s personal intervention, access to Whitehall officials, the support of big name retailers and a chance to share experiences at three national events.
The freedom of information requests were sent out by Paul Turner Mitchell, a retail campaigner. He said it was “wrong to call the winning bids Portas pilots when most town teams were left to their own devices to try and turn things round. The problems on the high street are deeply entrenched and they need serious attention, not an off-the-shelf reality TV approach.”
“There’s been far too much emphasis on TV and too little on proper policy. It’s been a case of lights, camera and no action in most of the pilots – and you can see why when they haven’t had the support they were promised.”
Broadcasters have also been accused of engineering rows in the town for the sake of ratings, something Channel 4 disputes.
On Tuesday, Portas fronts a show about shopping in Margate.
Last week the Guardian revealed that film-makers working with Portas on her reality TV show lobbied government officials to direct taxpayer funds to high streets because they would be popular with television audiences. Channel 4, Portas and the TV production company Optomen strongly denied any attempt to influence the process.
Roberta Blackman-Woods, the shadow local government minister, said the responses appeared to be “further proof that Eric Pickles and his ministers confused making TV shows and celebrity friends with proper public policy to help our high streets”.
“I hope that these revelations force the government to reconsider how best they can support those town teams lucky enough to win ‘Portas pilot’ status and ensure that the funding they won is properly and efficiently used to bring life back into their town centres.”
A Department for Communities and Local Government spokesman said: “Ministers have visited a number of Portas pilots and town team partners to see for themselves what more support can be offered.
“To build on this success, local growth minister Mark Prisk has brought together experts from across the industry to sit on our Future High Streets Forum to help tackle the biggest challenges our town centres face.”
Freedom of information request reveals use of PR-commissioned opinion polls and lack of concrete research
The education secretary, Michael Gove, has come under fire for citing PR-commissioned opinion polls as evidence of teenagers’ ignorance of important historical events.
Gove’s department has admitted he cited polls originating from Premier Inn and UKTV Gold press releases, prompting the Labour MP and historian Tristram Hunt to label him “Mr Sloppy”.
In a Mail on Sunday article published in March, Gove said: “Survey after survey has revealed disturbing historical ignorance, with one teenager in five believing Winston Churchill was a fictional character while 58% think Sherlock Holmes was real.”
This prompted Janet Downs, who describes herself as a grandparent and retired teacher, to send a Freedom of Information (FOI) request to the Department for Education asking for the evidence to support Gove’s claim.
Three weeks later, the department wrote back to say “unfortunately, I am not able to provide you with the details of the survey as it was commissioned and conducted by UKTV Gold”.
The survey, which dated from 2008 and had been written up by several newspapers, was released alongside a quote from the channel director saying it showed the strength of the UK’s fiction. The statistics on teenagers were a subgroup from a poll surveying all UK adults.
Downs then further challenged the department, asking why Gove’s article had referred to “survey after survey” if only one poll had been used.
After another four weeks, she received a response detailing “the other survey’s [sic] the secretary of state referred to”.
These included a poll commissioned by Premier Inn, which used its research to suggest historical ignorance was something that “can be rectified by visiting all the fantastic landmarks and places of interest the UK has to offer”, and an article in the London Mums magazine.
None of the pieces included links to the original research, and none of the articles cited stated whether the research was commissioned by professional polling companies, or met the standards of the British Polling Council.
The response to the FOI request also cited research commissioned by the Conservative peer Lord Ashcroft and a poll commissioned by the Sea Cadets, though it linked to a newspaper writeup rather than the original research.
Labour’s shadow education minister Tristram Hunt said: “Any good historian will tell you that it is critical to base your analysis on multiple, credible sources. Before he rushes to judgment about young people, Michael Gove should make sure he has researched the evidence thoroughly. Otherwise he risks coming across as Mr Sloppy.”
Dozens of people have taken to Twitter to criticise the sourcing for Gove’s claims as weak, including the poet and former children’s laureate Michael Rosen, who tweeted: “When Gove said: ‘Survey after survey’ showed teenagers’ historical ignorance he meant to say: ‘I’m making this up.'”
Establishing the quality of different types of evidence, and of different source material, is a core component of the national curriculum for history.
The current history curriculum for 11- to 14-year-olds states students should learn to “evaluate the sources used in order to reach reasoned conclusions”, while the draft curriculum for history from 2014 notes students should “understand how evidence is used rigorously to make historical claims”.
The Department for Education had not responded to a request for comment by the time of publication.
• Man Utd’s sluggish revenues
• BT’s sporting gamble
• What is Co-op’s raison d’etre?
• Stuart Rose off to a flyer
Contrary to some reports, Manchester United’s New York-listed shares did not plunge on Sir Alex Ferguson’s retirement. They ended the week 2.7% lower than they started it – that’s next to nothing.
But they should have plunged. By conventional financial yardsticks, the club is grossly overvalued at $3bn (£1.9bn) while also carrying £368m of debt. Now that the most reliable asset is giving up front-line duties, the stock deserves to be a double “sell.”
The valuation issue is basic: revenues were only £320m last year and half that sum was paid straight out as salaries. At the operating level, profits were only £44.9m. That entire sum was then consumed by finance costs of £49.5m, leading to a pre-tax loss of £4.7m. Naturally, there was no dividend.
None of which is to deny that the Glazers’ financial gamble has paid off. The £800m leveraged buyout in 2005 looked reckless at the time, not least because the adventure was funded in part with those notorious payment-in-kind (PIK) notes that accumulated interest at the potentially poisonous rate of 14.25%.
But the PIKs were paid off in 2010 and the moment of maximum financial danger passed. Ferguson kept the club in the Champions League every season and collected trophies. In doing so, he made the Glazers’ optimistic financial assumptions work. The current debt is clearly manageable. If the Glazers’ stone-cold equity investment was £500m-ish, they are clearly going to make a big profit if, and when, they sell their controlling shareholding.
It’s just that ascribing a £1.9bn value to the equity is wild. Manchester United may be the biggest football club in the world but it is not a large company. The Glazers have cranked up the commercial operation but overall revenues advanced by only 14% between 2009 and 2012. The current year has been stronger (revenues up 13% at the nine-month stage) but, for context, it will still take Man Utd 12 months to generate the revenues that Sports Direct achieves in 12 weeks.
The stock market valuation makes sense only if the Glazers can find somebody wealthier than themselves to pay the princely sum of £2bn-plus for the honour of owning Man Utd. The Premier League has become the playground of oligarchs and sheikhs, so it’s not out of the question. But the task looks harder in the post-Ferguson era. His presence was almost a guarantee of glory on the field. If that guarantee is ever seen to weaken, the short list of individuals with a couple of billion to spare may become even shorter.
The mistake made by failed entrants in the pay-TV market was to try to knock BSkyB off their effing perch, as Ferguson might have put it. That was always likely to be a losing game for the likes of Setanta and ESPN.
BT’s idea is smarter. Behind the obligatory bombast, chief executive Ian Livingston is clear that he is aiming only for co-existence with Sky. BT should be able to justify its three-year £1bn investment by attracting more broadband subscribers, especially from Virgin and Talk Talk. Analysts reckon one million extra customers would be a useful start. That goal ought to be within reach as BT completes its £2.5bn fibre network and pulls in viewers who want to save a few quid by living on a lower-fat sports diet. Sky will still have the gourmet sports dishes but, in a world of triple-play (broadband, TV and phone), BT’s offer looks competitive in a way that Setanta et al could never achieve.
The amazing part is that BT shareholders sanctioned the TV adventure with barely a grumble. Even three years ago, it would not have happened. Livingston was still in the early stages of reviving BT after its accident in its global services division, which runs big IT contracts. His back-to-basics formula has worked wonders: costs have been slashed, service has improved and peace has broken out with the pension fund trustees. The share price has risen from 70p in 2009 to 310p now, after Friday’s forecast-beating profits. The company is spitting out cash again and a £1bn investment is suddenly not such a big deal.
The worry for BSkyB must be what happens in three years’ time if Livingston maintains BT’s overall pace and makes a success of pay-TV. Would BT raise its ambition the next time the Premier League rights are up for grabs?
Welcome to the Co-op Group, Euan Sutherland. You thought you would be chief executive of an outfit with a challenger bank – your predecessor was full of such talk. It turns out you are actually in charge of a challenged bank.
The Moody’s downgrade of Co-op Bank’s debt to junk status does not imply a crisis for the bank’s customers. The boasts about ample liquidity are credible and there are ways to find more capital. A sale of the life insurance business has been agreed and the general business is on the block. If the regulators decide the proceeds are still insufficient, the Co-op Group itself – the ultimate parent – would have to dig deep into its collection of supermarkets and funeral homes.
But, if that prospect is even a vague possibility, it is time for the Co-op movement to consider its role in life. What is it in business to achieve? What is it good at? Are the capital demands of running a bank now too great for an organisation without shareholders?
The 2009 merger with Brittania Building Society should never have happened. As the Moody’s report makes clear, the Co-op “underestimated the risks” of a deal that brought a collection of soggy property loans and sub-prime mortgages. Nor would salvation have arrived via the now-abandoned deal to buy 632 branches from Lloyds. The Co-op would have become bigger in banking but there were “a number of challenges in terms of capital, liquidity and execution risk,” in Moody’s polite language.
Sutherland, who joined this month, is not a banker. He’s out of B&Q by way of Superdrug. His job now is to find some banking expertise, pronto – a point one assumes the regulators have made already. His second task is to spell out to his members what being a bank entails. Peter Marks, his predecessor, used to assert that there was unanimous support within the Co-op for expansion in banking. Really? Sutherland should find out.
How to make £1m. Sir Stuart Rose, when he agreed to become chairman of Ocado in January, was given 452,000 shares as a golden hello. The value of that award at the time was £400,000 and it matched the size of Rose’s purchase of Ocado shares from his own pocket. Now that Ocado’s share price has started to motor (90p to 224p since January), Rose’s freebie award is worth £1m. He can’t bank the sum since vesting depends on his remaining chairman for at least three years. Even so, he’s off to a flyer. Including the gain on the shares he bought himself, he’s up about £1.6m on paper. No bad going before he’s actually chaired a board meeting.
BT broadband customers get its three sports channels for free, so is it worth switching and what will you pay?
BT has announced that its broadband customers will get free access to its three sports channels from 1 August.
What sport will be available?
BT is offering three channels – BT Sport 1, BT Sport 2 and ESPN – which will show a range of sport from football to women’s tennis. The broadcaster has the rights to show 38 Premier League football matches and exclusive rights to show live games from rugby’s Aviva Premiership. There will also be some FA Cup games and Scottish Premier League games.
If you’re a football fan you will probably want to run BT Sports alongside your existing Sky Sports package, if you have one. If you are a rugby fan you might just want BT Sports.
How much will I have to pay?
If you are a new customer the monthly cost of taking broadband from BT is £10 on copper broadband or £15 on superfast fibre broadband with capped usage, or £16 a month for unlimited usage. On top of that you will also face a line rental charge of £15.45. To get the sports offer you have to commit to a 12-month contract. Anyone who signs up before 1 August when the channels go live will get free HD channels for a year; those who sign up afterwards will need to pay £3 a month.
When you join you will need to pay £6.95 P&P for the hub. That will be enough to let you watch the channels online. If you want to watch via your TV you will need to get BT TV. This costs £199 upfront with no contract, or £49 if you sign up for a TV package. The cheapest package is £5 a month and you need to sign up for a year. Signing up for BT Infinity, the package delivered through the fibre optic network, means an additional upfront “activation cost” of £30, while the alternative – watching through the TV aerial – will require you to buy a card for £10. Upfront costs can add up to more than £80.
I’m already with BT for broadband and TV, will I get the channels automatically?
No. You will need to commit to a 12-month broadband contract to get it, so you have to actively opt in to receive them. If, for example, you have two months left on an existing contract it can just be extended to 12 months; if you are two months into an 18-month contract you don’t need to make any extra commitments.
I’m with BT for broadband but have a Freeview box. What will I pay?
You can watch the sports channels on your iPad or PC for free through an app. If you want to watch on your TV you will need a set-top box. This costs £199 upfront with no contract, or £49 if you sign up for a TV package. The cheapest is £5 a month and you need to sign up for a year. There are also upfront activation costs (see above).
I’m with BT for broadband but have a Sky box. What will I pay?
You can watch BT Sports through your Sky box for free. You just need to call and request it, giving the details of your set-top box.
I’m with Sky for broadband, phone and TV. What would I pay to get the BT channels?
It depends what you want to do. BT and Sky have done a deal to show each others channels, so you could stay with Sky and add the BT Sports package to your existing deal. This will cost £12 a month, or £15 if you want HD channels.
If you decide to switch entirely you won’t need to pay for a new phone line, but you will need to pay for a new BT set-top box and pay all the activation costs detailed earlier. The cost of your line rental will also increase from £14.50 a month with Sky to £15.45 a month with BT, as will the cost of broadband, from £7.50 with Sky to £16 with BT.
However, BT is offering free broadband for six months, and as such over the first year it claims that the full phone, broadband and TV package will cost £134.65 a year less. After that you will pay £76.50 a month to get a full package including Sky and BT’s sports channels from Sky, and £73.95 a month to get it from BT.
A third option is to keep your Sky TV package and box and to move your phone and broadband. For that your only upfront cost will be £6.95 P&P for the hub.
I’m with Virgin Media for everything. What would I pay to get BT Sports?
Unfortunately at the moment you can’t add BT Sports to your Virgin Media TV package, so you need to switch provider entirely if you want the deal. You will need a new phone line, which means an upfront charge of £30, and your line rental will go up from £14.99 a month to £15.45 (although you can reduce that to £10.75 if you pay for a whole year in advance).
BT claims its total monthly cost of a TV, phone and broadband package including Sky Sports is £55.45, while with Virgin Media it is £66.74. If you wanted a package with TV, broadband and phone and just BT’s sports channels, not Sky’s, it would cost £35.45 a month at BT.
Is this just a one-year deal or will I have to pay next season?
BT says it has no plans to charge for sports next season, but the free HD offer will end after a year. After that, customers who want to continue with HD will pay £3 a month. The company has Premier League football rights for three years and the rugby rights for four years.
Should I be worried about switching provider?
We have had lots of complaints from readers who have tried to get BT phone lines fixed or installed in recent months, so you would be right to have reservations. However, BT says it has taken on new call centre staff and engineers to cope with the demand it expects, but if you want to make sure you get the channels in time for the start of the football season you would be wise not to leave it until the last minute.
Friends and colleagues of BSkyB exec pay tribute to ‘universally liked and generous-spirited family man’
Nick Milligan, the BSkyB head of advertising sales who was killed in a speedboat accident in Padstow, Cornwall, on Sunday afternoon, has been described as a “universally liked and generous spirited” family man in tributes from media industry colleagues.
Milligan, 51, had a 30-year career in TV advertising airtime sales, and while seen as a fierce competitor and canny operator in a sector often characterised by a macho, cut-throat culture, he was also described as one of the industry’s more likeable, well-rounded characters.
He worked for several ITV companies and UK Gold before becoming Channel 5’s launch sales director. As managing director of Sky Media, he had been in charge of the satellite broadcaster’s airtime sales operation for the past nine years.
“Everyone at Sky is deeply shocked and saddened to learn of the tragic accident involving the Milligan family. Nick has been a great friend and colleague for many years and his loss will be felt across our company and the industry. Our very deepest sympathies are with his family at this time,” Sky said in a statement on Monday.
Amanda Mackenzie, chief marketing officer at Aviva, who lived just a few streets away from Milligan in Wandsworth, south-west London, said he had been happy to help out recently when she asked him to do a favour for the National Youth Orchestra.
“There was no hesitation, it was ‘what can I do to help?’, that is what he was like. He was universally liked and generous spirited,” Mackenzie added.
Ben Fenton, media consultant with PR firm Edelman and former FT media correspondent, described Milligan “as probably the best practitioner of the dark arts of ad sales of his time”.
“He was also one of the kindest and most pleasant men you could hope to meet. He was funny, irreverent, relaxed, massively on top of his brief and a joy to have as a friend,” Fenton said. “He was generous with his time; he helped people who were in trouble even if they were rivals, and he was always looking for a laugh out of life. I will miss him more than I can possibly say.”
A former colleague who worked with Milligan for more than 15 years in TV ad sales described him as being in the first wave of a new generation who rose to the top of the sector in the late 1980s and 1990s.
“He rose through the ranks fast, he was good at what he did and he was fun to be with,” the industry insider said. “He climbed to the top of the tree and was a family man. He was not of the old school, hard-nut negotiator mould; he was the very first of a new generation of smarter TV sales man, less reliant on aggression and bullying to drive deals.”
Educated at Millfield school, Somerset, Milligan began his TV sales career at ITV south of England company TVS in 1983, moving to another ITV franchise, Central, as general sales manager three years later. By 1988 he was at ITV London weekday company Thames in the some role, and promoted to be the company’s sales controller two years later. In 1993, he joined the launch team for pay-TV channels UK Gold and UK Living. Three years later he was on another launch team as founding sales director of Channel 5, the fifth and final UK terrestrial network, which went on air in 1997.
Milligan stayed with Channel 5 for seven years, rising to become deputy chief executive, before switching to managing director of Sky Media in 2004.
Sky Media sells advertising for about 100 satellite channels, including in-house services such as Sky Atlantic, Sky News, Sky Movies and Sky Sports, and for third parties including MTV and Discovery.
In a rare 2011 interview with trade magazine Campaign, Milligan, who was married with four children, listed his interests outside work as “The kids, skiing, golf, motorbikes, anything outdoors”, and his most treasured possession as a beach house in Trebetherick, Cornwall, situated just across the Camel estuary from Padstow.
World’s largest marketing services group continues to grow, but questions remain what would happen if its chief left
This week MediaGuardian 25, our survey of Britain’s most important media companies, covering TV, radio, newspapers, magazines, music and digital, looks at WPP.
L’Oreal is one of the seemingly few global advertisers that Sir Martin Sorrell hasn’t managed to snare, yet after he pocketed almost £18m for running WPP last year some investors have been left muttering a version of the beauty brand’s famous strapline: “Is it really because he’s worth it?”
WPP’s chief executive took a rare blow on the chin last week, bowing to shareholders’ outrage at the scale of his pay packet, accepting a £150,000 salary cut, a 20% reduction in bonus and a significantly reduced long-term incentive programme.
Investors will get a chance to have their say at WPP’s annual meeting in June, with some complaining the board is too quick to kowtow to the company founder’s will. “WPP will probably trot out ‘oh but he formed this company from scratch …’, and he has sold [people] that [line] over and over again,” says one City source. “Entrepreneurs only tend to get paid out once when they float their company. Sorrell likes to be paid like an investment banker.”
It has been 28 years since he took the gamble on Wire and Plastic Products, a stockmarket-listed manufacturer of wire baskets, which he has used as a vehicle to create the world’s largest marketing services company. Last year WPP made more than £1bn in pre-tax profits and £10bn in revenues. It has a market capitalisation of more than £13bn.
“WPP is doing incredibly well, I think Martin is a force of nature and has built an amazing company,” says a senior advertising executive who once worked with Sorrell. “It is the most successful communications group in the world and Martin has led it brilliantly.” But some wonder whether the sprawling juggernaut – which employs 165,000 staff globally – is getting beyond the control of even the indefatigable Sorrell.
“It is too big, it is a bit like the Roman empire and is held together by one man’s force of will,” says the senior adman. “Therein lies the danger, there is something Napoleonic about it all. WPP is so big, it is almost unmanageable.”
Maybe so, but City analysts love the company – last year WPP’s share price rose 31% from 675p to 888p: “It will take more than another fat pay cheque to Sir Martin to spook the shareholders into selling,” says Anthony de Larrinaga, managing director at financial research company WYT.
Although there is an ongoing debate about whether Sorrell, who hates to see a prize asset go to a rival, overpaid in deals such as the £1.1bn purchase of research firm TNS, WPP is ticking the right boxes. “WPP is well-postioned from the three key angles of geography, clients and devices/product mix,” says Johnathan Barrett at Singer Capital Markets.
WPP’s engine is fuelled by its massive media buying capability: its Group M division uses its advertising buying power to get the best deals for clients across media including TV, press, radio and online. The advertising and media buying operation made £4.2bn in revenues last year, almost 42% of the total, and operating profits of £755m, just under half of WPP’s total.
The growth rate of WPP’s media buying operation alone, which is well over double the size of any rival in the UK, was a storming 7.4% in 2013’s first quarter. Group M controls about £1.2bn of UK TV ad spend, 30% of the market, and is almost as strong in other media. Potentially most concerning is that in most cases the closest rival media agency group is lucky to hold a market share of about half that of WPP.
“It has reached a stage that [media owners] can’t say no to Group M,” says a senior executive at a rival agency. “Their clout is unmanageable.” An example is Group M’s highly-publicised move to pull its £300m annual TV ad spend from Channel 4, close to a third of the £1bn the broadcaster takes in ad revenue annually, in a bid to drive down prices on commercials for WPP clients.
“[The outcome] was a draw, of sorts,” says one TV industry insider. “Group M didn’t come out looking so good reputation-wise, the publicity and the boycott turned out to be an uncomfortable place to be.” WPP would counter that such views are rivals’ sour grapes.; that other media groups have pulled client ad spend to get better deals, and that Channel 4 is perhaps not the force it was in terms of value for money Rival Aegis Media once boycotted Channel 5 for the best part of nine months, and more recently there was a spat with News International over the value it delivers for advertisers.
“Dominance and market leadership are two different things,” says a spokesman for WPP. “There is no lack of competition in the market. Group M is a strong leader in this highly competitive market, and benefits of leverage accrue to the clients.”
ITV’s family of channels has a 46% share of the TV advertising market, Channel 4 about 28%, Global Radio almost 60% of the radio advertising market and News International’s newspapers 25% share of press advertising. They are big enough to handle forceful negotiations, some say, adding that if you want to look at market dominance focus on Google’s 92% share of the UK search market.
“ITV and Associated [owner of the Daily Mail] may be able to withstand Group M, but most others are bullied and fall over,” says the senior media industry executive. But for how long will WPP still have that kind of power? What happens when Sorrell steps back is the question WPP-watchers describe as the elephant in the corner of the room.
The 68-year-old has ruled with an iron grip and there are those who believe that WPP will founder without him. “They’ll be fine until he goes,” says a senior advertising executive. “Then it’s a house of cards.”
Philip Lader, WPP chairman, said last week that there are twice-yearly discussions to prepare for Sorrell’s eventual departure – which could theoretically be abrupt, given his contract allows him to leave “at will” – and that the aim is not to “identify another Martin”.
“We earnestly endeavour to remain prepared for this inevitable transition,” Lader told shareholders. “That time, however, is not now. There’s no ‘elephant’ in the [WPP board] room.”
Need some overblown nonsense about heroic truck drivers and impressive-sounding numbers? Send for Eddie Stobart
“Eddie Stobart is shifting up a gear,” we’re told at the start of series five (five!) of Eddie Stobart: Trucks and Trailers (Channel 5). “They’re already one of the kings of road and rail. Now they’re aiming high, flying to an ever-growing number of international destinations.”
What, there’s now an Eddie Stobart airline, is there? With green-and-red planes whose pilots are Yorkie-eating men with big bellies and tats? Oh, no – they now have one plane de-icing truck, operating at Southend Airport, glamorously. This show does a lot of that: turning the mundane into the extraordinary. So putting the plane de-icer to the “ultimate test” turns out to be … de-icing a plane. Guess what “the ultimate test” for trucker Peter Grant’s snow chains is? Yup, driving on a bit of snow. (The chains, incidentally are the “ace up [Peter's] sleeve in his fight against the frost.”)
The show throws a lot of impressive big numbers into the mix. Eddie Stobart’s red and green lorries drive half a million miles every day, the same distance as to the moon and back. The forest in Scotland where Peter, Eddie Stobart’s one and only log-wagon specialist, is picking up his logs is 100,000 acres in size, the same as 50,000 football pitches, and home to 40m trees. His monster 500-horsepower timber truck – Laura Jane – carries 25 tonnes of logs, the same weight as five elephants … etc.
Then there’s the odd truck-sounds-a-bit-like-fuck gag. Welsh driver Ashley Maddox has a day from “trucking hell” (he takes a few rolls of loft insulation from Wales and delivers them around London). And there’s a truckload of alliteration in the narration. “From the forests to the factory to the final destination in Kent is an epic 500-mile journey.” More big numbers, more heroic drivers, and a heroic rock guitar soundtrack, and there you have it, Eddie Stobart: Trucks and Trailers. I’d say it was more like an Eddie Stobart marketing film than a TV documentary. But then I’ve always been more of a Norbert Dentressangle man myself.