In rocket scientist parlance, escape velocity is the speed needed to break free from Earth’s gravitational field. Last Friday, by an overwhelming majority, Le Monde’s staff voted to escape the black hole of French politics — or, at least, to give their paper the best chance to do so.
Disassembling the utterly complex chain of ownership control at Le Monde would take most of this column. Let’s just say the newsroom, which historically controlled 22% of the company, gave a resounding 90% vote for a triumvirate including the head of Lazard France, Matthieu Pigasse (41); the co-founder of Yves-Saint-Laurent, Pierre Bergé (80); and Xavier Niel (43), the founder of Free, France’s largest non state-related telecommunication company. Together, the investment banker, the philanthropist, and the telco maverick are likely to become the main shareholders of the most prestigious French newspaper — one that is facing a severe cash crisis (see last wee Note Le Monde on the Brink). The journalist’s choice was supported by most constituencies in a position to influence the group’s fate. Only one voting body chose the other bid; technically it can trigger a deadlock for the ultimate vote at the board level, scheduled for this Monday; this is a highly unlikely scenario, one that would immediately lead to a bankruptcy filing.
Two years ago, such choice would have ben unthinkable. On paper, the other bid, led by Claude Perdriel — owner of the left-leaning newsweekly Le Nouvel Observateur —, supported by the Spanish group Prisa and by France Telecom-Orange, would have got the prize. But their offer got mired in politics, and Le Monde’s staff reacted strongly against it.
Nicolas Sarkozy’s involvement doomed the Perdriel bids. When he summoned Le Monde’s current CEO, Eric Fottorino, to warn him, it felt like George Bush telling the New York Times’CEO: “You have two choices, here is my preference, be careful.” For any journalist, this type of ultimatum is the perfect repellent. Especially when, hoping to influence the decision, the executive branch pushes every lever.
To understand how it works, here, you have to keep in mind how the executive branch keeps the French medias under the tightest possible leash. When a government-friendly columnist is unhappy about his employer, he calls Sarkozy’s chief of staff (nicknamed the vice-president) who, in turn, calls the head of the broadcast network to express his concern. It always works like a dream, especially when the CEO of a network (radio or TV) is a government appointee or, for a private company, when the main shareholder is a FON — Friend Of Nicolas).
When a key target such as Le Monde is at stake, every possible mean is activated. Take the paper’s cash-bleeding printing plant: over the last few weeks, two Sarkozy media friends — Vincent Bolloré, who owns the free paper Direct Matin/Soir, and Arnaud Lagardère, who publishes the major Sunday paper Journal du Dimanche — disclosed their intent to terminate their printing contract with Le Monde’s plant, further weakening its P&L. At the same time, the presidential entourage hinted the Pigasse-Bergé-Niel team would be deprived of the public funding set aside to subsidize the ailing printing plant. (It didn’t occur to the government staff that the trio doesn’t care).
At the same time, since Claude Perdriel was a bit short of cash, the French government induced the support of France Telecom-Orange (the state still controls 26% of its capital and its boss is a political appointee). As a kind of moral reinsurance, the Perdriel bid was able to secure the involvement of the Spanish group Prisa, owner of El Pais. Early in the process, Prisa wanted to take over Le Monde, but gave up after taking a closer look at the balance sheet. Unfortunately, the man who whispers into the ear of Juan Luis Cebrian, CEO of Prisa, is no one else than Alain Minc, who suffers from two handicaps: a) he was instrumental in the collective hallucination that led to Le Monde’s desperate situation, and b) he is one the closest advisors to… Nicolas Sarkozy.
The death-blow was given in front of Le Monde’s staff last week. The Perdriel-Orange-Prisa bid appeared ill-prepared, and incoherent. Perdriel said Le Monde should remain an afternoon paper whereas, in an earlier interview, Cebrian said it ought to shift to to a morning publication schedule. As for the digital strategy, Orange’s CEO hinted he thought the only viable asset in Le Monde’s galaxy was its website, to be unlocked from the mothership with a different capital structure (i.e. with a large stake from Orange). For the future of the paper and of its powerful editorial engine, this was the wrong message. Clearly, Stephane Richard, Orange’s CEO, dropped the ball (who the hell is advising the gent?). The fact is: Orange doesn’t have a clue about its overall internet strategy; it doesn’t have a technological edge; its tons of cash have yet to find a clever way to be used; and, in the news business, Mr. Richard is in desperate search of the type of visibility Orange enjoys in movies or in sports).
In addition, both Perdriel and Cebrian— who sits on Le Monde’s board — were questioned regarding their ability to prevent a recurrence of the of bad investments Le Monde made during the early 2000′s; neither Mr Perdriel’s age (84), nor Mr. Cebrian’s aloofness appeared to quiet down worries within Le Monde’s team.
Adding an excess of political involvement to a sloppy preparation doomed the Perdriel-Orange-Prisa bid. Yesterday, the Journal du Dimanche, published by one of the most trusted FON, Arnaud Lagardère, headlined : “Le Monde votes against Sarkozy”. Very telling…
In contrast, the Pigasse-Niel-Bergé team delivered a competent pitch. According to people who where in the room, they seemed driven by a genuine desire to work on Le Monde’s future with a long term perspective. Xavier Niel’s speech, recounting his modest origins and his “luck” to have ridden the right digital horse, was seen as reassuring. He spoke about his immense wealth (“which could be seen as indecent”, he said), his opposition to inheritance, and his resulting desire to use his money for meaningful purposes.
Although left-leaning, Niel doesn’t have a reputation for interfering with editorial. He seems more interested in Le Monde’s business prospects, such as increasing the digital assets’ role into the group’s overall strategy, and providing more resources to the newsroom.
As for Pierre Bergé, he hit the right spot by offering to hand €10m to a foundation that would hold a minority stake capable of preventing unwanted boards decisions. Lazard France’s chief, Matthieu Pigasse, has yet to convince he’ll be able to built a Chinese wall between his upcoming board membership at Le Monde and his day job at Lazard, and his friendship with the likely presidential candidate Dominique Strauss-Kahn, just to name one. As for now, journalists intend to give him the benefit of the doubt.
Le Monde is entering a new phase in its tumultuous 66 years history. For the first time, the paper’s staff is emerging largely reunited to support a new ownership. Granted, this triumvirate doesn’t have a media business track record (when you see the state of the French press, you wonder how it could be a prerequisite…) But they know how to manage companies for the long run, as opposed to the usual short term, Malthusian view that prevails in the industry.
- Le Monde on The Brink TweetWithin two weeks, the French newspaper Le Monde will run out of cash. By this Monday at noon, candidates to the takeover of the most prestigious French daily will have disclosed their offers. By June 28, the staff will vote and make the final decision for the fate of the 66 years-old paper. More importantly, [...]...
- Le Monde: a blueprint of a turnaround TweetThe iconic French newspaper Le Monde is about to begin a new chapter of its complicated history. Last September, what remains France’s most influential paper changed hands (see previous Monday Note Le Monde’s escape velocity and story in NY Times’ DealBook). Le Monde is now owned by a triumvirate: Xavier Niel, a telecom entrepreneur, provided [...]...