Conrad and Lady Black: Dancing on the Edge. Tom Bower

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СКАЧАТЬ and the company was losing about £1 million a month. The reasons were painful. Compared to its rivals, the Telegraph’s advertising revenues had fallen steeply, and the trade unions were effectively blackmailing the company. Every year the employees hired to compose, print and distribute the newspaper were illicitly pocketing millions of pounds, either by threatening to strike just before the paper was due to be printed, or by signing on under names like ‘Mickey Mouse’ and disappearing to work in another newspaper or as taxi drivers. Within its decrepit headquarters in Fleet Street, the Telegraph’s ageing executives appeared helpless, and refused to recruit younger experts to stem the haemorrhage of money.

      Isolating himself in a sanctum on the top floor of the Telegraph’s building was Lord Hartwell, formerly Michael Berry, the newspaper’s seventy-five-year-old chairman and editor-in-chief. Abstemious and shy, Hartwell cared passionately about journalism, reading every word he published. His solution to the trade unions’ theft was radical. Two modern printing plants were under construction in London’s Docklands area and in Manchester. By using computers rather than traditional printing craftsmen, he could expel his dishonest employees from the industry forever. Hartwell’s experts had estimated the modernisation would cost £130 million.

      One aspect of the Telegraph’s poor management was the inaccurate accounts prepared by Coopers Lybrand, the auditors. Consistently, the company’s costs were underestimated. The Telegraph’s drift towards insolvency had remained unnoticed until, halfway into the Docklands plant’s construction, Hartwell was told that the building costs had increased by £89 million. Unperturbed, he asked his old friend Evelyn de Rothschild, the chairman of the merchant bank N.M. Rothschild, to find lenders on the market. Trusting the famous bankers to care for his interests, Hartwell approved Rothschild’s prospectus to raise the money. The result was disappointing. A group of banks agreed to lend £50 million only if Hartwell provided a further £30 million. To Hartwell’s surprise, by May 1985 he had found only £20 million. A further £10 million was needed before the loan could be secured. Sketchy rumours about Hartwell’s plight had reached Andrew Knight before he flew to America for the Bilderberg Conference. He returned to London with the news of Black’s enthusiastic interest.

      Travelling on the Tube from Heathrow airport to London, Knight was surprised to read a Times report of the Telegraph’s failure to find sufficient money. He immediately telephoned Evelyn de Rothschild. ‘I think Michael Richardson must have leaked it,’ said Rothschild. Richardson was the bank’s director responsible for raising the loan. Greedy and sly, Richardson would in later years find it difficult to prove his integrity, but in 1985 he was still trusted. ‘We need another £10 million,’ continued Rothschild, ‘and can’t find anyone.’ ‘Would any money be welcome?’ asked Knight. ‘Even from a North American?’ ‘I would see no problem,’ replied Rothschild. By the next day, Knight had received the prospectus and other reports. ‘Horrendous,’ he muttered. At the outset, Richardson had failed to warn Hartwell that £130 million would be insufficient to build the new printing plants, and had subsequently refused to seek out other reputable investors.

      Excited by the news, Knight telephoned Black. The time in Toronto was 8 a.m. on Monday, 20 May, and it was Victoria Day, a public holiday. Black was asleep, and to Knight’s surprise refused to take the call until lunchtime. Knight interpreted that rebuff as an amusing idiosyncrasy rather than the lazy arrogance he would later perceive. For a fleeting moment he considered telephoning Katharine Graham, the impeccable owner of the Washington Post who would make an ideal proprietor of the Telegraph. The thought soon evaporated.

      Once awake, Black rapidly understood his latest chance of taking advantage of another’s distress. ‘I’ll fax you Rothschild’s papers,’ said Knight. ‘I don’t have a fax machine here,’ replied Black. Noting his casualness, Knight sped to meet Lord Hartwell. ‘Would you be prepared to accept a Canadian investor?’ asked Knight. Trusting the emissary, Hartwell agreed to meet Black in New York. Knight was doubly delighted: first by Hartwell’s eagerness, and second by Rothschild’s failure to undertake any enquiries about Conrad Black’s reputation and probity. Unbriefed, Hartwell flew by Concorde to New York on 28 May, under the mistaken assumption that the money was being offered by Conrad Ritblat, a London property developer. Behind him in the aircraft sat his directors and Michael Richardson, uncertain of his loyalties.

      Conrad Black had not yet arrived when the group entered a scruffy suite in the Hilton Hotel at Kennedy airport. Twenty minutes later, he appeared. He was struck by the Dickensian eccentricity of Hartwell and his entourage, seemingly carrying the dust and smells of olde London from which they had reluctantly taken a day’s leave. Hartwell resembled the battered Ford Cortina car in which he daily drove himself to Fleet Street. The others looked like characters from The Pickwick Papers. Sitting next to Hartwell was Black’s old friend Rupert Hambro, who had been in the plane from London. Frustratingly, Hartwell had spent the entire flight scrutinising every word of that day’s Telegraph, which prevented the banker from initiating a probing conversation. His misfortune was rectified by Richardson’s opening remarks: ‘Lord Hartwell needs an investor offering £10 million,’ said the banker, confirming the Telegraph’s plight.

      Black required no advice about his tactics. His cultivated performance, concealing a burning ambition to become a media tycoon, suggested a gentle knight coming to the rescue. ‘All I have to worry about is which pocket the money’s coming from,’ he told Hartwell as he described his achievements and his limitless cash flow.⁷ There was no hint that his bankers in Toronto were demanding the repayment of loans, or that he was being publicly described in some quarters as dishonest. Nor did he reveal that he would need to borrow the £10 million he was offering Hartwell. Before committing himself, however, he wanted to tilt the odds in his favour. He and Hambro excused themselves and went for a walk, despite the heat and humidity, in the hotel garden. Hartwell, they agreed, was clearly on his last legs. The question was how to use the loan to capture ownership of the Telegraph. Knight had suggested that Black should only agree to invest £10 million in exchange for one strict condition: if Hartwell needed more money, he would be contractually bound to first ask Black, who would then become the Telegraph’s majority shareholder. ‘It could take five years before he needs the money and you get the newspaper,’ Hambro cautioned. There was, he explained, uncertainty about Britain’s newspaper industry. Eddie Shah, a printer, had provoked a bitter battle outside his premises at Warrington in Lancashire by using non-union labour. If Shah won, the trade unions’ grip over the Telegraph might be weakened, but nothing more. Neither Hambro nor Black knew that Rupert Murdoch, owner of The Times and the Sun, was building a new printing plant in Wapping, near Tower Bridge, and was secretly planning to destroy the print unions by printing all his newspapers with non-union labour. Better-informed than Hambro, Knight had estimated Hartwell’s eventual downfall within two years. Either way, the two men agreed as they returned to the suite, the opportunity was astonishing. ‘It’s a wonderful entrée,’ concluded Hambro. Black nodded. He scented blood.

      Hiding his excitement in a performance that would have been worthy of an Oscar, Black formally made his offer of £10 million for 14 per cent of the Telegraph’s shares, on condition that if Hartwell needed to raise more money, Black should have the right of first refusal, and that any investment would give Black a majority shareholding in the company. At that moment Michael Richardson ought to have intervened to warn his client about the possible consequences. Instead, he remained silent. Hartwell, he had decided, was beyond saving. ‘My role,’ he would later say, ‘was to ensure the successful placement of the loan, not to care for the Berry family’s interests.’ Unprotected by Rothschild’s, Hartwell replied without fully understanding the implications of Black’s condition, ‘I don’t think, Mr Black, we can resist that.’ Convinced that he would not need more money, Hartwell agreed to gamble his empire for just £10 million.

      As Black watched Concorde take off for London carrying Hartwell and his entourage, he understood the astonishing opportunity organised by Andrew Knight. He had cast СКАЧАТЬ