Independence at last?

February 23rd, 2010

Friday is the deadline for a deal for Tony O’Reilly to sell the Independent in London to Russian mogul Alexander Lebedev. Let’s hold thumbs.

I don’t wish any evil on the Independent in London, although it is a shadow of the wonderful newspaper it was in its early days. But getting rid of this massive loss-maker, may enable O’Reilly to stop bleeding his South African newspapers and start investing in some long-term growth and some resources for his squeezed editorial teams in this country.

The Independent papers here have been in the ridiculous position of making a fantastic profit, but having to send most of it to London to cover the losses there, and cutting costs relentlessly back at home.

Lebedev went to Downing Street yesterday to meet Prime Minister George Brown, seen as a courtesy visit as the deal is being finalised. Staff have accepted reduced redundancy entitlements to facilitate the deal. O’Reilly desperately needs to get rid of the paper (or close it) to satisfy shareholders who have been baying for his blood over his running of a public company rather like a family business and his tolerance for the long-term losses of the Independent.

Lebedev already owns the Evening Standard and has created a free edition of this traditional London newspaper in a bid to bolster its decline and take on the London free-sheets which have hurt its circulation. He is becoming a master of picking up London papers in trouble. He got the Standard for “a nominal amount” and it looks like O’Reilly will have to pay up to £20-m (paying to get out of print contracts, writing off losses, etc) to get rid of the Indie. Since the price of closure has been given as £35-m, he is getting off lightly and you can be sure the delay in the sale is because Lebedev is pushing a hard bargain to get it for next to nothing - knowing O’Reilly has his back to the wall.

it is probably naive to think the London sale is going to mean a change of ethos back here. But the South Africa group has slid from being the biggest English newspaper group in the country to second to Media 24 (measured in terms of number of papers sold daily), and its dependence on classified advertising makes it extremely vulnerable to the rise of the Internet. It could well do with some investment, some vision and some TLC.

It contributed a massive Euro26-m to international profits in the last available figures (at a fantastic margin of 31%), so a few million moved to editorial will hardly touch sides.

Entry Filed under: Anton Harber, Journalism, Print