David Montgomery: from subeditor to media boss. What next?

The background to the departure of the chief executive of Mecom
CEO Mecom Group Plc David Montgomery
David Montgomery who is leaving his job as chief executive of Mecom. Photograph: Anna Gordon/eyevine

In the wake of David Montgomery's enforced departure as chief executive of Mecom, the European newspaper company he founded a decade ago, it is fair to ask where it all went wrong.

Having taken counsel from several people who have known Montgomery throughout his career it is possible to give a simple answer: he was a good journalist and a poor manager. Simple, but also simplistic. In truth, Montgomery's problems at Mecom stem in part from the same economic blight that has savaged the fortunes of many media companies in the past five years. For Mecom in particular, given that its finances were already stretched, the advertising downturn proved to be catastrophic.

The empire

There is a larger question to ask, however, about the very existence of the Mecom empire, which acquired publishing groups in Germany, Norway, Denmark, Poland and the Netherlands. Why? To answer that, it is necessary to understand Montgomery's character, his driving ambition, and the state of his career at the time he created Mecom in 2000.

The year before, he had been forced to step down as chief executive of Mirror Group Newspapers after being at the helm for eight years. The axe was swung by the company's then chairman, Sir Victor Blank, who was promoting a takeover of the group by the regional newspaper chain, Trinity, which opposed Montgomery remaining in place. Despite a handsome pay-off, it was galling. His stewardship of the company that published the Daily Mirror – where he had started his journalistic career – meant a great deal to him.

He had been unpopular with his former colleagues because of his ruthless cost-cutting and a widespread belief among Mirror journalists that he had compromised the group's liberal ethos by bringing aboard former News International executives, such as Kelvin MacKenzie, and hiring Piers Morgan as editor.

It looked to outsiders as if Monty, as he has always been known, had had his moment in the media limelight. But we need to go back just a little further to understand one of the key factors in his make-up.

Prior to his Mirror Group job he had fallen out with his previous employer, Rupert Murdoch. He was editing the ill-fated Today newspaper at the time and had upset Murdoch by covertly attempting to put together a consortium to engineer a management buy-out. It led to his swift departure from News International.

The attempt to become a newspaper businessman rather than a newspaper editor was not only due to his own burning ambition but also a sign that, like so many other people who have worked closely with Murdoch, he believed he could emulate his master. As with any journalist who makes it to the top, he had plenty of detractors. The dislike was reinforced by his not mixing easily with colleagues, his often dour manner, and his naked ambition.

But his supporters regarded him as a superb editorial operator. Nick Lloyd, who was his Sunday Mirror boss for a period, remembers him as having "a forensic ability to analyse stories and produce excellent newspapers".

Amanda Platell, now a Daily Mail columnist, was promoted by Montgomery to be his deputy editor at Today. She says: "David had great journalistic skills and great eye for design." She recalls how, on the outbreak of the first Gulf war, he returned from dinner to design the front page, write the splash headline, and draw up four succeeding spreads. "He did it all quickly, off the top of his head," she said. She also points to his promotion of women in the 1980s. He appointed several to key roles – such as Jane Reed, Sue Ryan, Jane Moore, Tess Hilton and Sandra Parsons – all of whom went on to senior positions at other papers.

Like Lloyd, Platell remembers a driven and independent individual who appeared unafraid of confrontation and did not shirk from taking unpopular decisions. "He was a terrible taskmaster," she says, "a tough boss."

His relentless cost-cutting at Mirror Group after the death of Robert Maxwell won him enough admirers in the City to ensure that he found backing for Mecom, an investment company that he grandly announced in 2000 would specialise in the merger and acquisition of media companies across Europe.

Forced to sell

For a while, it looked as though he would become a mini-Murdoch. He embarked on a series of deals that resulted in Mecom owning Germany's Berliner Verlag, the publisher of the respected Berliner Zeitung. But Mecom was eventually forced to sell its German titles due to a combination of the advertising downturn and the powerful opposition of journalist unions.

Meanwhile, the cumulative financial loss at Mecom went on rising to an estimated £1.1bn. For a company with a market capitalisation of £243m, of which £143m was the result of last year's rights issue, the outlook looks grim.

Shareholders had had enough and it is they who forced him to step aside. Even so, he still has his supporters. Lorna Tilbian, the Numis analyst, believes that he was pursuing the right strategy. "He did what was needed," she says. "The investment case at Mecom relied on squeezing down staff numbers and he reduced them by 10% last year, and by more than people expected this year."

So Monty is down again. He is now 61, but it would be foolish to write off a man who has had comebacks to rival those of Frank Sinatra. As he said when the Guardian bumped into him at last week's party to celebrate 40 years of Saatchi & Saatchi, "Some people think me and retirement don't go."