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overview
This
profile considers publisher Robert Maxwell.
It covers -
Robert
Maxwell, aka the Bouncing Czech, demonstrated that you
can have a lot of fun in publishing ... especially if
you are using other people's money and are not inhibited
by ethics or concern about legality.
early history
Ian Robert Maxwell was born in Czechoslovakia
in 1923 as Jan Ludwik Hoch. He moved to the UK in 1940
and fought with the British during the 1939-45 War, changing
his name at that time.
During the occupation of Germany he became the sole UK
and US distributor for the Springer
Verlag scientific publications. In 1951 he paid £13,000
for Pergamon Press, a publisher of textbooks and scientific
journals that had been established in 1948 as a joint
venture by Springer Verlag (later part of the Bertelsmann
empire and the heart of what is now Springer Science+Business
Media) and Butterworths.
Maxwell was elected to the UK Parliament in 1964 as a
Labour member. In 1969 he was severely censured by the
English High Court as unfit to run a public company after
a failed attempt to sell Pergamon to US finance group
Leasco. He did not stand at the next election and lost
control of Pergamon.
In 1973 a report by the UK Department of Trade & Industry
declared that he was "not a person who can be relied
on to exercise proper stewardship of a publicly quoted
company". He was thwarted his attempt to buy the
News of the World, which instead went to Rupert
Murdoch.
comeback
Bizarrely,
he was able to borrow enough money to repurchase Pergamon
in 1974.
Pergamon is often regarded as the prototype scientific
journal publisher
that pays authors nothing, pays editors a pittance and
increases prices at a significantly greater rate than
the cost of living.
In 1980, using borrowed funds, he acquired the British
Printing Corporation (BPC), subsequently renamed Maxwell
Communications Corporation.
In 1984 he bought Mirror Group Newspapers (MGN) - owner
of the tabloid Daily Mirror - from Reed
International, taking them downmarket in an unsuccessful
war with Murdoch's News group.
In 1988 he bought the US book publishing group Macmillan
Inc (independent of the UK Macmillan headed by former
UK Prime Minister Harold Macmillan and later acquired
by Holtzbrinck). In the
following year he sold his childrens' book publishing
interests.
His BPC and MGN holdings by then included -
- the
Mirror group of national and regional newspapers (including
the Daily Mirror, Sunday Mirror, Daily Record, Sunday
Mail, The People and Sporting Life)
- the
UK's second-largest printer
-
Nimbus Records
- Maxwell
Directories, including Official Airline Guide (bought
from from Dun & Bradstreet
and later sold to Thomson)
- Prentice
Hall Information Services
- Macmillan
Inc (including Collier books)
- the
Berlitz language schools
- Pergamon
Press
- 50%
of MTV in Europe
- 20%
of UK Central TV
- 12%
of the French TFI television station
- Maxwell
Cable TV
- Maxwell
Entertainment, a major provider of European television
programming
The
late eighties saw a giddy purchase and disposal of stakes
in other media groups, paper producers, printers, banks,
insurance and leasing companies and even Christian Dior.
It is unclear whether the 'churn' generated substantial
profits and whether it was driven by Maxwell's ego rather
than speculative gains.
collapse
During
1991 he sold Pergamon and Maxwell Directories to Elsevier
for £440 million, floated MGN as public company and bought
the tabloid New York Daily News.
In October 1990, as his new European newspaper
bled money, an investigative journalist had explored apparent
manipulation of the pension schemes run by Maxwells businesses.
Despite letters from concerned scheme members, there was
no action by UK or US financial regulators. During May
1991 it was reported that Maxwell companies and pension
schemes were failing to meet statutory reporting obligations.
Maxwell died while cruising off the Canary Islands, found
floating in the ocean. His death has variously been attributed
to natural causes, suicide, covert action by the secret
services of sundry agencies and even aliens. In the weeks
prior to his death he was being investigated by Scotland
Yard's war crimes unit, under the War Crimes Act 1991,
for allegedly killed unarmed German civilians in cold
blood in 1945.
Maxwell's shareholders presumably wished that he'd stuck
round. It was belatedly discovered that hundreds of millions
of dollars had been looted from the group to finance a
lavish lifestyle and unsuccessful corporate expansion.
One of his former PR staff thus commented in 2007 that
Maxwell
bought up companies that had nothing to do with his
core publishing business, whose main attraction seemed
to be their healthy pension funds. Sometimes, he sold
them on, but first he transferred the pension funds
to a City company that he controlled.
Five weeks after his death, it emerged that they had
all been looted. About £440m was missing. That
was not all that Maxwell stole, but it was the greatest
scandal in the history of the pension industry. It meant
that 32,000 serving or retired employees had been robbed
of their savings. They included a large number of elderly
people scattered around the West Midlands who had never
knowingly worked for Robert Maxwell, whose old firms
no longer belonged to Robert Maxwell, but whose pensions
were gone.
Eventually, they were rescued by the sheer awfulness
of the robbery, and the shadow it cast over the whole
private pensions industry. Most of their pensions were
restored by a combination of government money and payments
from the banks who had profited from their dealings
with Maxwell. But it took four anxiety-filled years.
aftermath
Maxwell's companies filed for bankruptcy protection in
1992. His son Kevin went bankrupt in 1991 with debts of
£400 million.
Mirror subsequently merged with the Trinity
group, becoming the UK's second largest regional and national
newspaper operator.
In 1995 Kevin Maxwell, Ian Maxwell and two former directors
went on trial in one of the UK's largest fraud cases.
The sons were acquitted in 1996. Kevin Maxwell was accused.
in the 2001 Department of Trade & Industry report
on the collapse, of acting "inexcusably".
He had chaired dot-com telco Telemonde, which went into
Chapter 11 in 2002 with debts of £105 million after
claims that it was worth £1 billion
studies
For a detailed account of misappropriation, expansion
and churn see the 382 page Mirror Group Newspapers
PLC report
by UK Department of Trade & Industry in 1995.
Most of the literature on Maxwell has centred on his colourful
lifestyle and death - including speculation about a KGB,
Mossad or mafia 'hit' - rather than serious study of how
the empire operated, why the watchdogs slept and why financiers
handed over the cash. Two examples are Robert Davies'
Foreign Body: The Secret Life of Robert Maxwell (London:
Bloomsbury 1995) and From Bevan To Blair: 50 Years'
Reporting from the Political Front Line (London:
Pluto Press 2003) by Geoffrey Goodman.
Tom Bower's Maxwell: The Outsider (1992) and Maxwell:
The Final Verdict (London: HarperCollins 1996) and
Roy Greenslade's Maxwell's Fall (New York,
Simon & Schuster 1992) are serviceable acounts. Maxwell:
A Portrait of Power (London: Corgi 1988) by Peter
Thompson & Anthony Delgado is uncritical but more
detailed than Nicholas Coleridge's chatty Paper Tigers
(London: Heinemann 1993).
Joe Haines' Maxwell (London: Macdonald 1988) was
an 'authorised' biography. Brian Cox's 2002 'The Pergamon
phenomenon 1951-1991: Robert Maxwell & scientific
publishing' in
Learned Publishing is - for us - similarly indulgent.
A Mind of My Own (London: Sidgwick & Jackson 1994)
by his widow Elizabeth Maxwell is self-serving; we suggest
instead Flash! Splash! Crash! All At Sea with Cap'n
Bob: My Astonishing Adventures with Robert Maxwell
(London: Mainstream 1996) by Mike Maloney & William Hall
or Nicholas Davies' The Unknown Maxwell (London:
Pan 1992). The Assassination of Robert Maxwell
(London: Robson 2002) by Gordon Thomas & Martin Dillon
suggests that Bad Bob was murdered by an Israeli government
agency; one of our clients blames the CIA or creatures
from outer space.
For the Mirror see Hugh Cudlipp's Walking in
The Water (1976), Cecil King's Strictly Personal
(London: Weidenfeld & Nicolson 1969) and Ruth Dudley
Edwards' Newspapermen: Hugh Cudlipp, Cecil Harmsworth
King & the Glory Days of Fleet Street (London:
Secker & Warburg 2003). There is a broader account
in Charles Wintour's The Rise & Fall of Fleet Street
(London: Hutchinson 1989), Northcliffe's Legacy: Aspects
of the British Popular Press 1896-1996 (New York:
St Martins 2000) edited by Peter Catterall & Colin
Seymour-Ure, The Mirror: A Political History (London:
Hamilton 1966) by Maurice Edelman and The Market For
Glory (London: Faber 1986) by Simon Jenkins.
Kevin Maxwell was prematurely lauded in Forbes Great
Success Stories: Twelve Tales of Victory Wrested From
Defeat (New York: Wiley 2000) by Alan Farnham.
For Springer Verlag - unrelated to the Axel
Springer group - see Sarkowski and Götze's two
volume Springer-Verlag: History of a Scientific Publishing
House (Berlin: Springer 1996) and other works highlighted
in the profile on Springer
Science+Business Media.
next
page (Maxwell chronology)
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