The Independent newspapers in UK ushered in a new chapter in their history today when they were sold to Russian billionaire and former KGB agent Alexander Lebedev. Lebedev, who bought the London Evening Standard last year, has bought the Independent and Independent on Sunday for £1 from Irish publisher Independent News & Media.
INM will also pay Independent Print Limited, the company set up by Lebedev to publish the titles, £9.25m over the next 10 months. In exchange, IPL will assume “all future trading liabilities and obligations”. Lebedev said the acquisition by IPL would safeguard the Independent titles’ future. Ledebev’s son, Evgeny, is to be chairman of IPL. Lebedev will be a director. INM confirmed that the Independent titles and independent.co.uk lost £12.4m in 2009.
A small cheer is understood to have rippled around the Independent newsroom in Kensington when the news was announced.
The remaining stumbling blocks to a deal have been removed. They included the Independent’s deal with Daily Mail (LSE: DMGT) & General Trust to be based at its Derry Street HQ off Kensington High Street, where it has been based since last year, and INM’s contract with Daily Mirror owner Trinity Mirror (LSE: TNI) to print the titles.
A new five-year printing contract has been signed with Trinity Mirror at a reduced rate and for a shorter period. Trinity Mirror has also agreed to waive “significant” payments it was entitled to in the event of the previous contract being ripped up.
Dublin-based INM will continue to print some of Trinity Mirror’s titles in Northern Ireland, but it appears that it will receive less for this contract as a quid pro quo.
The Independent titles will continue to occupy DMGT’s Northcliffe House headquarters. But DMGT has also agreed to waive any penalties due for scrapping the original tenancy agreement signed with INM. That suggests the terms of the original deal may have changed, although no further details have been provided.
The two companies have also agreed a deal which will ensure content from the Independent titles can be used by INM’s other titles around the world.
Lebedev’s acquisition is subject to approval by the Irish competition authorities and is likely to be completed in May 2010.
The INM chief executive, Gavin O’Reilly, said: “This is a most satisfactory and positive outcome for the titles, their staff and for INM’s shareholders.”
“I wish IPL and the staff every success for the future in continuing the development of these important and influential titles. 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. I wish them, the titles and our former colleagues every success for the future.”
Ivan Fallon, the former journalist and chief executive of INM UK, has retired from the group with immediate effect. O’Reilly said Fallon, the author of a biography of Tony O’Reilly “has made a significant contribution to INM since he joined the group in 1994”.
The Lebedevs also announced plans to set up a not for profit organisation, Novaya Independent Media Foundation (NIMF) which will “finance global media projects”.
“In particular, we are talking about Novaya Gazeta in Russia, the Independent and the London Evening Standard in the UK,” Lebedev said.
“We hope that other philanthropists will also be interested in maintaining quality journalism to protect freedom of speech and encourage investigative reporting to promote greater transparency in society,” he added.
Readers and staff at the titles hope the sale will herald a revival of the paper, the smallest-selling national newspaper, which had a massive impact on Fleet Street when it launched in 1986 with the slogan “It is. Are you?” underlining its fresh approach to dealing with the news. The paper’s circulation peaked at 400,000 in 1989 and the Independent on Sunday launched in 1990.
But in February its headline circulation had fallen to 183,547 copies, with full-rate sales accounting for just under 50% of the total. Circulation was down 10.88% year on year. Its sister paper, the Independent on Sunday had an average circulation of 155,661, down 13.27% compared to a year ago. Full rate sales were 45.3% of the total.
Industry speculation has centred on whether Lebedev will make the titles free, like he did with the Evening Standard, tripling its distribution in the process. But the Russian tycoon and his son Evgeny apparently gave assurances to Gordon Brown, the prime minister, that they would remain paid-for titles when he visited No 10 recently.
Negotiations have been on and off since March last year and the sale is a coup for Simon Kelner, the papers’ managing director and editor-in-chief, who edited the Independent for a decade.
Former Observer editor Roger Alton and former Guardian journalist John Mullin became editors of the Independent and Independent on Sunday, respectively, in 2008.
Lebedev will be the fourth owner of the Independent after a consortium led by its founders, Andreas Whittam Smith, Stephen Glover and Matthew Symonds; Mirror Group Newspapers; and Independent News & Media.
Earlier this month deputy editor Ian Birrell announced he was leaving after 12 years.
The Independent revolutionised Fleet Street again when it launched a tabloid edition in September 2003, dropping its broadsheet edition entirely about six months later.
Kelner attempted to recruit outspoken columnist Rod Liddle to be the Independent editor but backed out of that plan following uproar.
This article originally appeared in Â© Guardian News & Media Ltd..