Local World, a new newspaper conglomerate headed by David Montgomery, former Trinity Mirror chief executive, was launched today as Northcliffe Media and Iliffe News & Media announced they had been sold to the new venture.
It what amounts almost to a fire sale, Daily Mail & General Trust has sold its titles for £52.5million and will have 38.7 per cent shareholding in Local World. Steve Aukland, Northcliffe managing editor, will become the new group's chief executive.
The Iliffe family, owners of Yattendon Group, will have a 21.3 per cent stake. Trinity Mirror has bought a 20 per cent stake, (in a £14.2m deal) but will not be putting its regional papers into the business. The remaining Local World shares will be purchased by other investors, including Artefact Group, an Investment fund associated with billionaire Tory donor Lord Ashcroft, and Odey Asset Management.
DMGT announced: "Local World will become one of the UK's leading regional newspaper publishers, online content providers and local advertising platforms, with more than 107 print titles and 60 websites. DMGT will contribute more than 80 titles to the new venture, with another 36 coming from Iliffe News & Media."
The group's titles now include the Leicester Mercury, Bristol Post and Derby Telegraph, Cambridge Evening News and the Hertfordshire Mercury.
David Montgomery, chairman, said the new venture would have an enterprise value of about £100milion on completion of the deal and employ more than 2,800 people.
Barry Fitzpatrick, NUJ deputy general secretary, 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.
"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."
David 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 fight back in Britain's regional media industry."