London printing costs may force sale of newspapers
January 3, 2010 by Gareth
In any business it’s important to keep the costs down, and printing costs can mount up if you don’t find the right print company that can fulfil your print needs quickly and cheaply. Last month, Independent News & Media (INM) announced that they were considering selling their London newspapers because of the increased printing costs making the newspapers lose money. The company was courting Alexander Lebedev, a Russian businessman, with a view to selling their stake in the newspapers.
INM has agreed to speak with Alexander Lebedev exclusively, but the exclusivity agreement will only last until February 15th.
INM controls the Independent and the Independent on Sunday.
Mr Lebedev meanwhile already has interests in newspapers in London, controlling 75.1% in the London Evening Standard.
A spokesperson for INM added:
It should be emphasised that these discussions are still preliminary at this stage and are subject to due diligence, agreement on the financial consequences of the transaction for INM, and a number of substantive contractual conditions being fully satisfied to all parties.
One of the stipulations of the contract is for the printing services that the newspapers must continue to use. They are required to use the printing services of Trinity Mirror. Figures released earlier this year show that the printing contract with Trinity Mirror is costing INM dearly, as even closing the newspapers down would cost them €25 million – with the printing services contract forming the bulk of those costs.
INM announced earlier in 2009 that costs had been reduced at their London newspapers and they believed they could break even by the end of this year.