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Business

Russian tycoon buys UK's Independent newspaper

Text by News Wires

Latest update : 2010-03-25

Russian tycoon Alexander Lebedev, a former KGB spy turned media mogul, has paid one pound (1.1 euros) to acquire leading British newspaper, the Independent. The sale highlights the effect of dwindling advertisement revenue on print media.

AFP - Russian tycoon Alexander Lebedev bought Britain's struggling Independent and Independent on Sunday newspapers for a token sum Thursday, a year after acquiring another top British title cheaply.

Lebedev, an ex KGB agent, paid one pound (1.1 euros, 1.5 dollars) for the papers, while its current owners will pay 9.25 million pounds in the next 10 months to his firm Independent Print Limited for taking on future liabilities.

The sale highlights the problems faced by many British newspapers who, like titles around the world, are struggling to attract advertising revenue and keep circulation high in the digital age.

The two titles' previous owners, Dublin-based Independent News and Media (INM), announced the long-expected sale in a statement.

"I believe that the Lebedevs will be progressive and supportive owners of the Independent titles which have played such an important role in British public life for nearly 25 years," said INM's group chief executive Gavin O'Reilly.

Lebedev bought London's Evening Standard newspaper for a nominal one pound in January last year in a deal which made him co-owner with his son Evgeny. It became a free paper in October.

The wealthy Russian oligarch, who has interests in banking and aviation, already co-owns with ex-Soviet leader Mikhail Gorbachev a 49-percent holding in the Novaya Gazeta newspaper, which has been critical of the Kremlin.

The Independent was launched in 1986 by three journalists as a counterweight to other broadsheet titles owned by global media tycoons. The slogan for the new paper was: "It is. Are you?"

In 2003, it became the first British broadsheet to change to a tabloid format, a move later copied by rival The Times.

But its circulation has dwindled and it has been forced to shed jobs and re-locate its offices -- moving into the same building as the Evening Standard in west London.

The Independent's average circulation last month was 183,547, down from 205,964 for the same month in 2009, according to the Audit Bureau of Circulations (ABCs). This is the lowest of Britain's five daily broadsheets.

The Independent on Sunday's circulation last month was 155,661, down from 179,487 for the same month the previous year.

Following the sale, staff on the two linked papers will become employees of IPL but continue to operate from their current offices in Kensington, central London.

In results out Wednesday, INM reported 2009 operating profits of 177.2 million euros, a slump of 39 percent on the previous year. It completed a rights issue and restructuring in December.

The group publishes over 200 newspapers and magazines around the world including India's Dainik Jagran, the New Zealand Herald and the Irish Independent.

O'Reilly described the sale as a "most satisfactory and positive outcome".

"After our successful refinancing in late 2009, this transaction marks an important milestone in the repositioning of our group and will allow INM to focus solely on its market leading, cash generative assets in Ireland, Northern Ireland, South Africa, Australia and New Zealand," he said.
 

Date created : 2010-03-25

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