Fighting Back
Cherwell, one of the oldest student newspapers in the country, is facing an uncertain future after experiencing an unprecedented financial crisis this summer.
According to the new editor, "gross mismanagement" and "abuse of company resources" by former staff members brought the newspaper close to insolvency, before a substantial bank loan enabled Cherwell to remain in print for Michaelmas. Although the company remains confident they will pay off all debts by January, it is still not known whether Cherwell will eventually have to be bought. The Oxford Union has already expressed an interest.
Cherwell is currently produced by Oxford Student Publications Limited, the largest independent student publishers in Europe. In addition to the newspaper, OSPL is also responsible for Isis - the oldest student magazine in the world. Both publications have spawned countless famous alumni, including David Dimbleby, Michael Heseltine and Rupert Murdoch. The issues of Michaelmas 2001 could signal the end of the run, however, following the "incompetent and naïve" behaviour of last year's management staff.
The crisis unfolded over the summer vacation, when incoming Cherwell editor Jon Boone attempted to retrieve money from several sources. Last year's Cherwell website had featured sponsorship from Goldman Sachs, Morgan Stanley and IBM. Cherwell staff had believed the sponsorship deal to be worth £30,000 and had accrued outgoing expenses accordingly. The OSPL office was renovated throughout Hilary and Trinity, and was equipped with new furniture and computers. On investigation, however, the deal was discovered to be worth just half the amount. Further difficulties ensued when it emerged that through the "incompetence and naivety" of OSPL management, the contracts had never been signed in the first place. Consequently, the institutions refused to pay out any money.
Further investigation revealed that invoices had not been sent out over the last year, and that management staff had failed to submit tax returns for the past three financial quarters. The company must now pay a heavy increase on the original tax demands. Boone claims that this "failure to do simple paperwork" and "the management team's inability to keep track of accounts" has caused OSPL to be "not in the financial good health that it should be."
Other surprises in store for the new editor included a mass of unpaid bills, including a substantial account with Cherwell's printers. Phone lines were also cut after some impossibly large bills had not been paid. Boone claims there had been "a lot of abuse of the company's resources", including telephones being used to make personal calls, often to mobiles or abroad for hours at a time. "Completely crazy" advertising deals had also been struck, with summer ball committees being offered full page colour advertisements (normally sold for up to a thousand pounds) in return for a couple of free ball tickets.
Although Boone is reluctant to name individuals, the person largely assumed to be responsible is Jared Dann, OSPL Chairman last year. A student at St Peters, Dann was responsible for co-ordinating OSPL's Council of Management, including Managing Director Rishi Kansagra, and Business Manager Nick Jones. Dann himself blames the events on "problems with understaffing" and regards Boone's accusations of poor management as "unfair in the circumstances." He claims that a "family crisis" prevented him from being able to help the OSPL team during the summer, but has been working closely with them since, despite his contract having expired. In short, "it wasn't my responsibility." Boone disputes this, however, claiming that Dann was "notable by his absence throughout the holiday" and that his involvement was "not as great as that of a chairman of a company facing a major crisis should be."
With less money than they had banked on, and an plethora of unpaid bills, Cherwell had an "enormous cashflow problem" and found themselves "in quite a perilous situation". A bank loan of £25,000 has at least provided breathing space, and a small group of students has worked tirelessly through the summer to ensure some kind of future for the company. Boone claims that there has been a "phenomenal amount of goodwill" towards the newspaper, as news of the crisis spread through the ranks of ex-editors and current lawyers, bankers and media moguls - Heseltine and Murdoch are both past Business Managers, and contacts at Clifford Chance have offered to provide free legal advice.
Nevertheless, the future seems bleak for Cherwell. Though Boone states "we are certain we'll be able to pay off all our debts by January", even then there will be decisions to make. For now, "the issue is staying in print". In eight weeks time they must decide whether OSPL can make a go of it, or whether instead they must sell the company. Many institutions have already expressed a keen interest in buying OSPL, including the Union, which is believed to have already approached the management team. One Frewin Court insider told the Oxford Student that "if Cherwell were looking for financial support then the Union would certainly be interested."
A final option being considered by OSPL is to go out of print in January, for either one or two terms, in order to mount a national campaign to save the Cherwell. If successful, OSPL could then implement long-term changes to the structure of the company, such as registering as a charity with ownership of the Cherwell and Isis titles, and keeping a subsidiary company to own the equipment. All depends on what happens in the immediate future.
Michaelmas publications from OSPL will certainly feel the pinch. Isis is due to be reduced to just one issue at the end of term, in place of its usual three. Isis Editor Adrian Cornell du Houx remained pragmatic: "We're upset, of course, but we're concentrating on raising the money we need and getting a good issue out." Back at Cherwell, meanwhile, phone lines have been reduced, digital cameras are being used wherever possible, no expenses are being refunded, and Business Managers must operate without commission. As a temporary measure, JCR subscriptions are also being increased from the current 8p a copy (each costs 33p to produce). Colour content is being dramatically reduced in the newspaper itself, and pages have had to be cut ruthlessly. Drastic measures, but, comments Boone, "there's simply not enough money to carry on as we were."
4th Oct 2001