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Guardian gets £7m in cash, but what about Channel M?
In 2002, a consortium of private equity investors sold a long-forgotten grouping called Regional Independent Media to Johnston Press. The price was £536m. The deal brought together such flagship media titles as the Yorkshire Post, the Yorkshire Evening Post, the Lancashire Evening Post, the Blackpool Gazette and the Sheffield Star. By any standards it was a good deal for the sellers – led by private equity group Candover.
Today, the Manchester Evening News, once the largest selling regional newspaper in the land, was sold by Guardian Media Group (GMG) to Trinity Mirror for just £44.8m. Except it hasn’t really, the price was £7m in cash, the cost to Trinity was £44.8m because it paid off a long-term print contract.
The details of the deal are as interesting for what has been left out. Channel M, the baby of Mark Dodson, GMG’s chief executive, is not being bought, and neither is Dodson. Some newspapers in the south of England are also excluded. But Channel M has been a controversial strategic diversion for The Guardian.
The whole point of the Scott Trust, owners of The Guardian, is to safeguard the future of the UK’s leading liberal newspaper. But to have received just £7m in cash for the MEN hardly shores up the long-term future of The Guardian, which is what the £675m sale of a stake in Autotrader yielded in 2007.
Sly Bailey, chief executive of Trinity Mirror, commented in the way chief executives of merged companies tend to when she said the deal was “a perfect strategic fit”.
What chief executives don’t tend to say when they’re crowing after a deal is that they’ve picked up an absolute steal. But there is a sense that with the slate wiped clean, the major cuts already implemented and the loss-making Channel M out of the way, that’s exactly what they’ve got.
Comments? Email Michael Taylor, editor, Insider
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