The most extraordinary deal in UK newspapers for years is very much alive: Russian billionaire and former KGB agent Alexander Lebedev is set to buy the London Evening Standard, Guardian.co.uk and Bloomberg report, with a deal expected to be signed by Lebedev’s son Evgeny that would give the oligarch a 76 percent controlling stake.
The UK title, owned by the newspaper group DMGT, is loss-making and has not managed to build a large online audience or hold its paid circulation amid a free newspaper war in the capital — and its prospective owner doesn’t see it as a cash cow: “As far as I’m concerned this has nothing to do with making money. There are lots of other ways. This is a good way to waste money,” he says. No price has been mentioned, but with a fortune of at least $2.5 billion (£1.53 billion), there isn’t much chance of him being priced out of a deal.
And it doesn’t stop there: Bloomberg reports he has signaled interest for troubled INM’s The Independent and Independent on Sunday. No details on that, but it is no secret that the papers represent a burden on INM with their high costs, falling circulation and growing but comparatively small online audience. INM is soon to move in to DMGT’s Associated Newspapers office in High Street Kensington from its Docklands home in an apparently unrelated cost-saving move.
So why would a 49-year-old Russian billionaire buy London’s only city-wide, paid-for newspaper? We know it’s not for profit — the paper reportedly makes losses upwards of £10 million ($16.29 million). Lebedev is a vocal supporter of press freedom and liberty in Russia, he was a member of the Russian parliament until 2007, and his Novaya Gazeta, the newspaper he co-owns with former Russian president Mikhail Gorbachev, is a rare critic of Vladimir Putin and the Kremlin. Yet he has ruled out using the Standard for propaganda, telling Guardian.co.uk “my influence would be next to zero.” Lebedev in fact has a more personal connection to the paper: as a KGB spy in the 1980s one of his jobs was to analyze the UK media, including the Standard, and report back on what people were saying about the Soviet Union.
Update: Times Online now reports that Lord Rothermere, chairman of DMGT, is still seeking assurances about the deal and that his company is not best please by all the publicity surrounding it.