How big are the hidden costs of tabloid excess?

No doubt Colin Myler, editor of the News of the World, carries around in his head a moral profit and loss account that allows him to balance his Catholic faith against the occasional need to broadcast footage of S&M orgies on the web.

In the real world, it was left to Chris Horrie, writing in the Guardian on Monday, to take a crack at the numbers behind the News of the World‘s brief liaison with Max Mosley. Horrie’s P&L is vague but it goes something like this:

Revenue/Positives:

Rumoured 200,000 sales boost in print on publication

Video footage establishes New of the World as “global brand”

Also attracts younger online readers — positive in demographic terms

Fear of Mosley-type cases will freeze some rivals out of the kiss-and-tell market

Costs/Negatives:

£1,000,000

The costs of ongoing promotion to retain new readers

Potential costs of forthcoming Mosley libel action

Quantifying stuff like this on a spreadsheet is the kind of thing that delights young consultants from the Boston Consulting Group, which has been retained by James Murdoch to oversee the remaking of Wapping.

More than most of us, consultants appreciate that you can’t manage what you don’t measure.

However, before declaring an pre-tax profit on the Mosley affair for News International, the rosy-cheeked MBAs should pick up the phone to Louis Charalambous of Simons Muirhead and Burton.

As Patrick Smith’s recent piece in Press Gazette demonstrated, Charalambous is that rare thing: a solicitor who is visibly, righteously, angry — not on behalf of Max Mosley, but on behalf of his client, Robert Murat.

Murat has just picked up £600,000 plus apologies from — wait for it — The Sun, News of the World, The Daily Mirror, The Sunday Mirror, Daily Star, Daily Record, Daily Express, Sunday Express, Daily Mail, Evening Standard and Metro.

(I thought I’d mention the roll-call: as Max Clifford said: “Because all of them are guilty with Robert Murat you hardly read a thing.”)

Here’s part of what Charalambous had to say:

‘There was a pack-dog mentality here and my clients and their families were the prey. The children of Robert and Michaela, little girls, one not much older than Madeleine, were hounded and had to go in and out of their homes with coats over their heads.

‘I’d like to invite the editors of the worst of these titles to have tea and cake with them and explain why they let their journalists and photographers harass them. They are now recovering but the effects are long-lasting.”

(Tea and cake? Perhaps Mr Myler could stop by for slice of Battenberg, brandishing one of his spiritual spreadsheets. . .)

Charalambous is surely on to something when he says that cases like Murat/McCann result in trust ebbing away among 15m Red Top readers.

That’s one way of looking at it. Another involves reading a bit of Irvine Welsh — and understanding the transformed morality of an audience that’s at liberty to snort vast quantities of cheap coke, buy bondage gear on the High Street and consume a staggering variety of porn on the web.

Coincidentally, this same audience has become intimately familiar with the previously hidden mechanisms that propel the celebrity merry-go-round.

This is the kind of leisure regime that changes perceptions. To the extent that we the readers are less shockable, we’re also liable to become more cynical about tabloid motives.

From both directions — the decline of trust and the rise of cynicism — the tabloids incur exceptional costs at the extremes of operational procedure. Inevitably, this involves a write-off against the assets on News Corp’s balance sheet. Sooner or later, an exceptional cost on the profit and loss account will follow.

Next: how about a risk analysis?

The risk in question involves a plaintiff who is less foreign than Murat, less unsympathetic than Mosley. A plaintiff who unexpectedly takes the tabloids to the cleaners — and very obviously secures the sympathy of the public.

It’s just possible that a fracas of this kind could result in what Charalambous recommends — the scrapping of the conveniently hapless Press Complaints Commission and its replacement by ‘an Ofcom-type body set up to impose swingeing fines on papers which just don’t give a damn”.

Somehow, the boys and girls from the Boston Consulting Group need to get that risk into their spreadsheet.

They need to quantify it in terms of both advertising and circulation. Next, they need to balance it against Rupert Murdoch’s political influence and the skill of Wapping’s editors.

The net risk remains small. But it’s growing. Given the wrong (right?) circumstances, things could change very quickly for the Red Tops.