IN&M denies talks on sale of 'Independent'
INDEPENDENT NEWS Media (IN&M) has denied reports in the British media that it is in discussions with the owner of the Daily Mailin relation to a bid for the loss-making London Independentnewspaper and its Sunday sister title.
Speculation about a possible bid for the titles by Daily Mail and General Trust plc (DMGT) followed a statement by INM on Friday that the group is in discussions with a number of other publishers of UK national newspaper titles on sharing services such as facilities, IT, human resources and sub-editing functions.
The Observernewspaper cites unnamed media industry executives that an alliance with DMGT could go further than that. However, a spokesman for IN&M poured cold water on a possible bid yesterday and said no discussions were taking place along those lines.
"Any discussions with UK publishers were solely in connection with shared services," he said.
Deep cost cuts and job losses are expected at both the Irish and British operations of IN&M before the end of the year, but it is the UK division that is likely to suffer the heaviest cuts, with the group expected to seek 100 to 200 redundancies in the coming months - a reduction of up to 40 per cent of its workforce.
In a trading update on Friday, the group said it was "taking additional steps to resize its cost base" to reflect a tougher trading environment. "Total payroll costs across the group are currently under active review, with further headcount reductions being identified," it said.
As part of the cost-cutting process, the UK national division is in discussions "with a number of other UK national publishers" in relation to a sharing of services that it said would deliver "substantial efficiencies" and "create more efficient editorial work flows".
It is understood that these discussions are taking place with Telegraph Media and Trinity Mirror, as well as DMGT.
Such resource-sharing alliances are the result of tough times for the media industry. Advertising revenues have dried up in 2008 as economic growth in the UK and Ireland turned from growth to contraction, and fears have mounted that 2009 will prove to be an even more difficult year.
"All other costs are currently subject to intensive review and all discretionary costs are being eliminated," IN&M said. A cut in capital spending of about €50 million has been pencilled in for 2009.
IN&M chief executive Sir Tony O'Reilly has received regular criticism from dissident shareholder Denis O'Brien, who believes the London Independentand Independent on Sundayare vanity titles that should be offloaded. Mr O'Brien has criticised IN&M's decision to sell its Australasian media group APN, which is a profitable business, rather than the London papers.
The Belfast Telegraphhas underpinned the Independent's losses for many years and made the UK national division profitable, but it too is now suffering from a steep decline in classified advertising revenue.