Old family money, newspaper publishing, and new economy success…few do it better than DMGT

The newspaper business is in torment. Most titles are struggling, due to a slump in advertising and competition from social media. Even Warren Buffett capitulated in 2020, and sold Berkshire Hathaway’s US titles for thumping loss.

Jonathan Harmsworth, 4th Viscount Rothermere, may be old money, but he has hired a series of smart operators to build a string of tech-driven businesses around his DMGT (Daily Mail and General Trust) titles, led by the Daily Mail and Mail on Sunday. 

This has delivered a world-beating 15 million global unique browsers and shedloads of advertising. It is the most read online English-language newspaper in the world

His key player is CEO Paul Zwillenberg, former senior partner at Boston Consulting Group, who set up DMGT’s digital operations in 1996.

On 29 March, the company delivered, yet again, through the $1.35 billion sale of a minority stake in Cazoo, which restores used cars and delivers them to buyers. Not a bad return for an investment that cost DMGT $161 million.

It’s sad for the UK that the business is being bought for $7 billion by a New York-listed SPAC, led by Danny Och. 

But business is business, and the news is sweet for Cazoo chief executive Alex Chesterman, who started it in 2018 following his success with online estate agent Zoopla.

DMGT merged its online Digital Property Group with Zoopla in 2011.  When Chesterman sold the business to Silver Lake for $2.2 billion DMGT took $660 million out of the deal.

Rothermere’s MailOnline has never made much profit, but it has played the long game by remaining free to view, while others charge. This has delivered a world-beating 15 million global unique browsers and shedloads of advertising. It is the most read online English-language newspaper in the world. 

MailOnline helps to keep DMGT’s newspaper titles relevant. Its experience in running an online business should help Rothermere squeeze more profits out of the New Scientist, bought by DMGT on 3 March for £70 million.

DMGT Ventures looks after a range of B2C  investments. Cudoni, a fashion resale business, recently raised £4.6 million from high-net-worth investors. GP Nutrition offers dietary supplements. Yopa is a new generation online agent. Kortext supplies digital textbooks to universities. Zipjet offers a laundry service. And so on.

The selection looks random, but venture capital investors like diversified portfolios. The services on offer would tend to interest Daily Mail readers. Investments are handled by Manuel Lopo De Carvalho, who once worked at Goldman Sachs, and Rachel Muzyczka, previously at Talis Capital.

Elsewhere, DMGT is a leader in catastrophe risk modelling for insurers through RMS, a market leader. It offers tech-driven property services and an events business, which has been hit by the pandemic. 

Over the years, Rothermere has been in a good position to help find backers for his ventures. His people have also tapped the media zeitgeist for talent. 

Consumer media currently contributes 45% of operating profits following success for its business arm. Despite the pandemic, it has just increased its dividend. And Rothermere has retained control of DMGT through ownership of voting shares without generating a fuss. 

None of this is as dramatic as the rise of Rupert Murdoch. 

But it is nevertheless impressive not least because it is neatly led by a fourth-generation viscount in an era of tech-driven disruption.