David Montgomery (pictured), former editor of Rupert Murdoch’s Today (defunct) and the boss of the Mecom European newspaper empire (much reduced) is having another bash at saving the newspaper industry – this time with Local World, a joint venture between Daily Mail and General Trust, Yattendon (which owns the Cambridge Evening News among others) and Trinity Mirror.
Local World will include over 100 British regional newspapers but not very many that are making money.
Montgomery and co are racing to close the deal by Thursday when DMGT, which also owns the Daily Mail and Mail on Sunday, announces its annual results. A glimmer of hope for the group’s local titles would be a relief for Jonathan Harmsworth, chairman and de facto owner of DMGT, who turned down a £1bn private equity bid for his Northcliffe regional newspaper business a few years ago, holding out for £1.2bn. Now the papers are valued at no more than £100m, making his decision one of the more expensive in British newspaper history.
On the face of it Local World will likely pursue the slash and burn policy which has reduced regional newspapers to a shadow of their former selves in the face of competition from the internet and classified advertising rivals like Auto Trader and moving house site Right Move. But Local World will be free of debt and pension liabilities, which gives it half a chance.
Investors in the new business include hedge fund magnate Crispin Odey and former Tory Party chairman Lord Ashcroft, both millionaires several times over. We shall see if they know something the rest of the market appears not to.