As Independent News and Media shareholders gather for their AGM in Dublin today, reports are gaining momentum that the company is to sell the Independent to Alexander Lebedev.
Back in January, when it emerged that the Russian billionaire was in talks to buy the London Evening Standard, Lebedev told Bloomberg he was interested in buying the Independent titles.
Yesterday, Media Week claimed that Lebedev was now in advanced talks to buy the Independent titles.
Sources close to Lebedev have now confirmed that a deal is likely, with one telling The Guardian: “This is a conversation in its eighth or ninth month.
“Simon Kelner [managing director] and Lebedev get on well and there are fairly advanced discussions, but you can’t assume with any deal that it gets done until it is actually done. But there have been good conversations.”
IN&M chief executive Sir Anthony O’Reilly bought out the remaining half of Independent Newspapers that he didn’t already own for £30m in 1998, also assuming the company’s debt.
Ten years on, he looks finally set to let go of the Independent titles as he steps down from the leadership of the company today to be replaced by his son Gavin.
Over that period the Independent titles are reckoned to have lost an average of £10m a year.
After a successful and much-admired tabloid relaunch in 2003, The Independent picked up the British Press Awards newspaper of the year prize in 2004 and had seemed to have a fair wind behind it putting the paper on course to finally move into profit.
But despite successive rounds of cost-cutting, the Independent titles have continued to lose money for parent company INM.
In March 2007, some 30 Independent journalists were made redundant, then earlier this year a further 60 editorial jobs were cut as part of cost savings aimed at shaving off £10m a year from the budget.
As part of that restructuring the Independent titles left their offices in Docklands, East London, and moved into rented office space at the Associated Newspapers building in Kensington where the Standard is based.
This would make any buy-out of the Independent by Lebedev more attractive and pave the way for some sort of merger between the two titles, as the Indy and the Standard are now based in the same building.
INM does not publicly break down the profit and loss figures for the Independent but in April it revealed that UK operating profits had fallen from â‚¬15.5m to just â‚¬200,000.
INM’s other main UK asset is the Belfast Telegraph, which has always been highly profitable, so these figures suggest that the Independent’s losses wiped out the Belfast Telegraph’s profits in 2008.
The Independent has suffered an acceleration in sales decline over the past year, despite fresh editorial impetus and a relaunch under former Observer editor Roger Alton, who took over in April last year.
But his efforts have largely been hogtied by being saddled with the highest cover price of any mainstream national quality title – the price was raised from 80p to £1 in September. In May, sales of the Independent dropped 15 per cent year on year to 204,413.
A report in the current print edition of Press Gazette finds Lebedev to have been broadly welcomed as proprietor of the Standard and, considering the likely alternative, he may also be welcomed by journalists working on the Independent titles.
One Standard source told Press Gazette: “Going into a recession being owned by people who genuinely want to own you and have a track record can only be a good thing.
“They have given it three years to break even. In three years time we either have to hope that the general financial situation has improved, or that the Lebedevs have fallen in love with the power and esteem of owning a newspaper. In the short term, its saves us from being closed.”