Robert Maxwell

Overview

This profile considers publisher Robert Maxwell.

It covers -

early history
comeback
collapse
aftermath
studies

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 Maxwell’s 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.

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.