In the deal, announced this morning, Daily Mail General Trust is receiving a cash payment of less than one-twentieth of what their local newspapers were valued at just seven years ago.
The collapse of the local newspaper market has seen the Sadvertiser flee Croydon, being published outside the borough for the first time in its 140-year history, in an effort to cut overheads by sharing office costs with Surrey and Sussex titles.
There has been a raft of redundancies among staff, its pages are now sub-edited in Essex and its sports desk run from Tunbridge Wells. And its slogan remains “making local matter more”, without a hint of irony.
After going to a part-free (in the south of the borough), part-paid-for (in the north of the borough) distribution, the Sadvertiser‘s circulation has collapsed by 40 per cent in the past year. The Sadvertiser now sells barely 8,000 copies a week, according to the latest Audit Bureau of Circulations figures.
Under the deal announced by DGMT, they will create a venture called Local World with the local titles and websites run by Trinity Mirror and Yattendon. DGMT will receive £52.5 million and hold a a 38.7 per cent stake in the new group. Mirror will have a 20 per cent holding, Yattendon 21.3 per cent in the group, which includes more than 100 local titles.
The Financial Times is reporting today that among the other share-holders is Artefact Group, an investment fund associated with Lord Cashcroft, the former Conservative party deputy chairman, tax avoider and past employer of Gavin Barwell, the Croydon Central MP.
The slump in the local newspaper business has seen Northcliffe Media’s value fall from £1.5billion in 2005 to the £52.5 million cash that the company received today.
It is the nature of such business deals that a period of what the new management will undoubtedly describe as “rationalisation” – mergers, job cuts and possibly even title closures – may not be far away.
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- Trinity Mirror to buy 20% stake in Local World (guardian.co.uk)