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Gordon's Republic

Could the Independent close?

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Billionaires are fighting over its future. With Denis O'Brien saying that if he wins control of Independent News & Media he will sell the UK newspapers off, which some commentators are now saying could lead to the 22-year-old loss-making Independent closing.
The Independent News & Media chief executive and founder, Tony O'Reilly, has a very tough battle on his hands against O'Brien, who seems to have a massive grudge against his fellow Irishman and owns 22.2% of the company making him the biggest shareholder after O'Reilly.

The unpleasantness between the two dates back to 2001 when O'Reilly thwarted O'Brien in a battle for control of Irish telecoms firm Eircom. Now O'Brien wants his own back.

And what a feud it is. He is using his many millions to slowly buy up IN&M, which owns the Independent in the UK as well as the one in Dublin and various newspaper assets in Australia and New Zealand.

We know it's a grudge as IN&M is doing pretty well under O'Reilly, as former Guardian editor Peter Preston pointed out in the Observer.

"Denis O'Brien, the 'dissident shareholder' who wants to take over Tony O'Reilly's Independent News and Media group, obviously thinks he can run it much better. Pause and scratch head. Better than operating profits up 6 per cent in 2007? Better than margins boosted to 21.9%? Better than ad revenues growing at 5.4%? Better than online cash jumping 108%?"

It is unlikely O'Brien can do any better and so he seems to purely want to put one over on O'Reilly, and part of his plan calls for the sale of the Indy, which loses around £5m a year. That is a lot of money, but not in terms of a national newspaper, but it is an asset that O'Reilly values very highly. Whether it is worth that is another question.

As Robert Greenslade points out in his Guardian blog, O'Reilly calls the Independent and its sister Sunday title a valuable "calling card" and says they contribute to the rest of his empire. Greenslade seems to doubt that, which goes to the heart of the problem with the British titles. As if they are not then what are they there for? Are they little more than vanity publishing?

There has been much talk over the newspaper's (I say newspaper but really viewspaper is more accurate, having long since drifted away from putting hard news on its front page in favour of nice graphs and editorials) future of late with MediaGuardian reporting insistently that former Observer editor Roger Alton will take over as editor and relaunch the newspaper.

But whoever took on that task would have a tough job on their hands. Part of the reason it's more views than news is because it runs a tight ship with less staff and resources than its rivals. That's what keeps its losses down to £5m presenting a challenge to whoever wants to reinvigorate it and boost its sales.

That would be a huge and possibly costly challenge and it would come in the wake of not well-received recent relaunch of the Independent on Sunday.

Greenslade wonders, as does former Sindy editor Peter Wilby whether the papers have a future should O'Brein wins control.

"Former Sindy editor Peter Wilby, in his Guardian column today, also puts his money on O'Reilly, arguing that "the papers might well close" if O'Brien sold them off. I agree. There will be bidders, of course, but it would take a Rupert Murdoch to save them if INM is forced to sell. And that is surely out of the question, isn't it?"

Would we miss the papers if they were gone? Well, yes I think we would and I'm not a fan of either. The loss of the two would reduce the market leaving a 200,000 plus hole for the competition to fill and it would also reduce the vibrancy of the British market as well, which would be a shame.

Published Mar 31 2008, 10:47 AM by Gordon Macmillan

Filed under: newspapers, The Independent

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