The City finally sees cracks in the Mirror

Trinity Mirror (TM) is still Britain's largest regional publisher in terms of circulation. It publishes one of the country's iconic national newspapers, the Daily Mirror, and Scotland's most famous popular title, the Daily Record. But those papers are way past their best, surviving only on past glories, and their owner does not even share that history. It has an inglorious past, a dismal present and is contemplating a doomladen future.

TM's share price has taken yet another knock in recent days, finishing last night at 490p 22p down on a week ago since it was forced to come clean about the fact that its recent disposal of assets will not achieve anything like its anticipated target.

It baffles me why the City's media analysts didn't realise this from the start, confirming again that they are paid way beyond their merits.

Plenty of us could see that the sell-off of hard-pressed local newspapers in the current climate would never attract top-dollar buyers.

So instead of TM's original promise to realise £600 million from the disposal of its sports division, which includes the lucrative Racing Post, and a variety of local papers, it has now conceded that the best it can hope for is about £450 million. That is, by some measure, a staggering shortfall.

It is still negotiating the Racing Post sale and that of the Midlands down for The Indy division, which includes the ailing Birmingham Post. Both sets of bidders are driving hard bargains but, according to TM, it will complete deals before the end of next month.

Then what? How does TM's chief executive, Sly Bailey, intend to drive the business forward, to use one of her own beloved phrases? Back in December, when she revealed the results of a review of the company's situation by its board, she didn't exactly give much away, apart from a pledge to save £20 million a year through cost-cutting.

Instead we learned that, following the disposal of assets, the company would "focus on national newspapers, key regional titles and UK digital assets." That is a breathtaking announcement. Was the company failing to focus on those titles before? If it wasn't, why not? If it was, why bother to say so? These are purely rhetorical questions, of course, because the statement is just one of those anodyne corporate declarations that is largely meaningless. But its vacuity is a metaphor for TM's stewardship of newspapers since it was formed in 1999 from a merger between the Trinity regional chain and the Mirror Group then run by David Montgomery.

As many a commentator remarked at the time, there is precious little, if any, synergy between national and regional papers. Trinity, despite its undoubted success in the regions, soon proved that it had no real clue how to run the Mirror titles.

By 2003, when Bailey was appointed with a mission to "improve performance and enhance shareholder value", both arms of the company were suffering from a lack of vision and investment.

In fairness to Bailey, she inherited a tough assignment that grew tougher with the downturn in newsprint advertising and a pronounced circulation decline. She has been playing catch-up ever since, trying to invest in new digital products to retain ad revenue while relentlessly cutting costs.

The writing was on the wall last year when TM appointed a new chairman, Sir Ian Gibson, whose immediate previous roles had been as a business seller rather than a business creator.

So it has come to pass. Piece by piece a large group is being dismantled in order to manage decline as profitably as possible. Profitable for investors and directors, of course, rather than editors and journalists.

A slimmed-down TM is close to losing its status as the number one regional publisher. It now has many fewer titles than both Johnston Press and Newsquest. Its Scottish papers have already ceded their once-dominant positions.

As for the nationals, both the Daily and Sunday Mirror editorial staffs strive hard to compete without the resources of their rivals. Despite my occasional disquiet at some content, there is no doubt that the journalists go on trying their best.

But they are working for a public company that is obliged to worry more about its investors than about its journalists. It is surely significant that the shareholders, though they will benefit less from the sell-off than they expected, will not suffer as badly as the papers, because there will be little money left to invest after they have been satisfied.

People may complain about private media ownership but the lesson from Trinity Mirror is that it has many advantages over public ownership.