Regional publishers Northcliffe Media and Iliffe News and Media are now in new ownership after being sold to the new Local World consortium led by David Montgomery.
The new group said it “intends to transform regional publishing to create a one-stop shop for local content to serve the community and business in every aspect of life.”
Northcliffe’s former owner DMGT will become the biggest shareholder in the new venture with a 38.7pc equity stake as well as receiving £52.5m upfront, while Trinity Mirror has paid £14.2m for a 20pc stake.
Iliffe parent company Yattendon will own 21.3pc of the company while the remaining 20pc will be split between various smaller investors including hedge fund manager Crispin Odey and former Conservative Party deputy chairman Lord Ashcroft.
Steve Auckland, the former chief executive of Northcliffe, will continue in the same role with Local World, with Mr Montgomery as non-executive chairman. Northcliffe finance director Rachel Addison will be chief financial officer.
Trinity Mirror chief executive Simon Fox, Yattendon chief operating officer Lisa Gordon, and Kevin Beatty, chief executive of DMGT’s A&N Media division, will all serve on the board of directors of the new company, which will be based in Leicester with an office in London.
The group will own 16 daily titles including the Hull Daily Mail, Cambridge News and Leicester Mercury, 36 paid-for weeklies and 40 free weeklies as well as 63 local websites and a number of niche products and magazines.
Announcing the new venture, Mr Montgomery said: “This is an entirely new type of media business. The value of Local World will lie in its people, its franchises and its IP. It will be unencumbered by the infrastructure of the industrial past such as property, printing presses and large scale distribution or any legacy issues such as high levels of debt. Local World signals the fightback in Britain’s regional media industry.”
Early plans for the new venture will include an expansion of Local World’s digital presence with the investment of an additional £10m in a bid to attract a younger audience.
The new company, which will rely on digital for 8.4pc of total revenue and 11.2pc, of advertising revenue at launch, said it aims to more than double its digital revenues to 20pc of the total.
Incoming chief executive Steve Auckland said: “Local World is a new beginning with a team dedicated to growing the local markets they serve.
“Our plans give us a real opportunity to produce a business that is positive, engaging and a pleasure to work with. This takes time, dedication and brilliant execution, and is somewhere everyone in media would want to work.”
The new Local World website which went live today.
DMGT chief executive Martin Morgan said: “This is good news for DMGT, for all who work at Northcliffe and for the future of local news media. With this move we receive cash from the sale and also retain a stake in a business with excellent prospects.
“Local World has talented people and a clear vision for the future of local media. I think the media industry has been waiting for this logical next step for regional newspapers.”
Lisa Gordon said: “The Iliffe family has owned and published newspapers for more than 120 years and are great believers in the ongoing demand for valued local content. We have a shared vision with Local World about the long term opportunities for local media and the need to adapt in a rapidly changing media landscape.
“The commitment of our long-held assets to this venture reflects our belief in the strategy being adopted by David Montgomery, Steve Auckland, Local World management and shareholders.”
And Simon Fox added: “Alongside our continued focus on the creation of One Trinity Mirror, our investment in Local World reinforces our commitment to local media and enables us to participate in a compelling business opportunity with the consolidation of two strong local media businesses.
“In addition, the investment builds on Trinity Mirror’s existing commercial services for the provision of contract printing and national advertising sales to Northcliffe. We look forward to working with the Local World team.”
The National Union of Journalists descried the deal as a “fire sale” and said it intended to hold Local World to its promises in relation to local content.
Deputy general secretary Barry Fitzpatrick said: “Once again a huge swathe of our media has changed hands with little transparency and, some could say, by stealth. The increasing consolidation of the regional press under fewer and fewer owners is a great cause for concern.
“Local World said it has a ‘vision to create comprehensive content for local communities’. Experience shows that large groups soon lose contact with their local communities as they close local and district offices.
“We want to hold Local World to its word that it will protect news coverage for local communities.
Added Barry: “We would like to see hard evidence that the dash to digital can be backed by a solid business case. We want guarantees from David Montgomery that revenues will not be lost in the switch from print to online.
“We also want guarantees that there will be a print option for many in the community who do not get access to local news and information online.
“We would also like to warn the managers of Local World that there is no fat left on these titles to cut. Year- on-year cuts to staffing and resources have left very little to trim. These cuts mean that courts are not being covered and councils are not being held to account.
“This democratic deficit is further increased when large sections of the community, who do not have access to computers or smart phones, are unable to get access to their local news.”
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Interesting times but ‘famous brands include the Cambridge Evening News’ made me chuckle.
I don’t know much but I do know the Cambridge Evening News is not a famous brand!
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And Mecom shares did what ?
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“A number of new innovative working practices will be put in place to help transform the business.”
If there could be an even bigger heart-sink moment than the realisation that Monty is back, it was reading that.
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Lets be clear.
Local world is owned by :
20% Trinity Mirror
38.7% DMGT
21.3% Yattendon Trust
20% Others
I think you will find that for for OFT purposes over 25% is deemed a controlling interest.
The others appear to have paid £50m for 20%
Unclear where pension liabilities sit.
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Yes, I’m sure it’ll be all change given that it’s the same old faces in charge. The ownership too is sure to bring about a radical rethink – after all those journalism prophets DMGT and Trinity Mirror are renowned for revolutionising and revitalising journalism…
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So basically all the jargon and business speak b~~~~~~s means “local news for local people”? Hmm, that’s a new one.
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sub be good to me you clearly don’t know much Cambridge News dropped the Evening part 3 years ago!
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The Cambridge Evening News is such a famous brand that Local World manages to get its title wrong. I think I’m right in saying that it dropped the ‘Evening’ from its title a few years ago. Or perhaps Local World is returning it to evening print times …
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“It will be unencumbered by the infrastructure of the industrial past such as property, printing presses and large scale distribution”
So – online only then.
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‘The value of Local World will lie in its people.’
My God, let’s hope so…..
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Forget the utter junk being spouted by the usual suspects . Northcliffe is now valued at WHAT!!!!!!!!!!!!!!!!!
£52,000,000.00 (I’ve put the zeros in so that it looks to be a “big figure”) oh yes and the share optioned percentage.
Lets just remind ourselves of the valuation in 2005 of Northcliffe!!!!!
Talent – yes of course there must still be great talent in the new company – but it’s probably buried deep within the new organisation and will have to fight to see the light of day me thinks.
Those of us who can remember back to the heady days of only 5 years ago will have seen loads of very talented individuals get thrown out or get out once they saw what was happening to a great company. Yes I know it’s very tough now (tell me about it) but I only thought that you could “throw the baby out with the bath water” ONCE – well apparently not. A very, very sad state of affairs.
BUT – things move on and I personally wish all involved good luck….
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Sounds like a lot of journalists, subs and other staff should be getting Plan B to Z sorted. New owners will only be interested in profit not local people
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Mmm – looks like they paid about 50 million too much. Only answer to online provincial journalism in the future will be in the shape of not for profit websites and apps maybe in short term linked to weekly print version to be phased out.
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I can remember not so long ago a group of prominent free newspapers selling for £27 million.
Now it seems that the once mighty Northcliffe have slipped silently in to the night for a sum that a few years ago would have been allocated to expenses and client entertaining.
It makes you wonder what the current value is for the remaining goups, both individually and collectively.
There must be a few very concerned CEO’s out there and some very interested predators.
Anyway,Ladies & Gentlemen lets all raise a collective glass to the future of Regional Press in the U.K?
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Monty as non-executive chairman – er, I don’t think so somehow.
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As a boy I soon learned early on that “See next week for a thrilling announcement” meant that the comic I was reading would be no more.
Some things don’t change.
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That’s the worst line, as Steve C says, the ‘unencumbered’ quote. We all read things as we want, but sounds to me that they are going to find the geographical centre of the ‘Local World portfolio’ and plonk 90 per cent of staff there (or whatever figure). Where any local staff will be, it’s anyone’s guess. Upstairs above the local pawn shop? Whatever, there’s little positive news in this.
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NB to anyone about to join Northcliffe…that’ll be the end of your much-vaunted pension prospects. DMGT are maintaining the pension scheme, which is indeed excellent, but I will be very surprised if it applies to any new recruits…
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Interesting point about 2005 @last one out
I seem to recall DMGT turned down offers northwards of £1 billion in 2005. Whoever was prepared to pay that must now be mightily relieved. Imagine turning £1 billion into £52 million in just seven years….
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If Trinity has paid £14.2m for a 20% stake, the company is valued at £71m.
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Producing newspapers without printing presses eh? Great idea. Why didn’t I think of that? Photocopiers it is then Mr Auckland you well paid genius!
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I wonder how much someone got paid for that Local World logo? You have the letters WOO joined up… then it comes to an abrupt dead end.
Anyway, good luck to all on the journey to the latest Brave New World (somehow I think the local bit will get further lost along the way, as it has in so many of the big groups in recent years).
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Phew! Never has so little been said by saying so much. I tried cutting between the upper-echelon management speak but there was just too much!
Still, at least the NUJ have roared their toothless roar – I bet Local World are quaking in their designer bespoke hand-made boots – Not.
Glad I got out over a year ago……But touch my dwindling pension Monty and……….well, I know where you live.
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Just another bunch of asset-stripping profiteers ripping the last bit of flesh off the carcass. Delighted to be out of it.
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It’s quite encouraging that all the miserable gits out there immediately panning this deal are no longer employed in the industry. Draw your own conclusions from that.
Someone putting some cash in to continue our regional press industry. That’s good news. Northcliffe – or the new company – isn’t saddled with massive debt like JP and it isn’t being dragged down by a floundering holding company like Trinity.
I think this could actually be a good move. And let’s hope so for a lot of dedicated staff.
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It might be a good move for the “high ups” at Northcliffe, who have run the company into the ground. But for the poor “little people” who work hard and going to lose their jobs (and maybe their houses) its awful.
This isn’t to save the industry, its get to the last drops of blood from newspapers. Some will make some money from this and lots of people will get stepped on. Of course you are going to get stupid comments about “miserable gits” The fact is you can have the most dedicated staff.and the company will treat you like crap as they can replace you
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The pension fund is the long story here
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It’s the redundancy terms I’d be worried about. It would be truly shocking if loyal staff got the heave-ho on statutory terms.
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You’ve hit the nail on the head – a new company formed not called Northcliffe but still owned by DMGT, means new terms for long standing employees. Probably reduced pensions and statutory redundancy payouts.
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