Only a day after Mexican billionaire Carlos Slim Helú agreed to invest $250 million in The New York Times (See: The New York Times raises $250 from Carlos Slim), another business tycoon has evinced interest in the print media. Russian billionaire Alexander Lebedev is buying a majority interest in the Evening Standard newspaper for a nominal sum, current owner Daily Mail & General Trust (DMGT) said.
Lebedev, a former Russian intelligence agent who worked for the KGB while posted to Moscow's embassy in London, said last week he was interested in influential British newspapers, in crisis as advertising revenues plummet. A new company, Evening Standard Ltd, will be set up to own the Evening Standard with DMGT retaining a minority stake of 24.9 per cent, DMGT said Wednesday. (See: Russian billionaire Lebedev eyeing the London Standard: Reports)
Lebedev, 49, is part owner of the Novaya Gazeta newspaper, one of the few Russian media outlets critical of the Kremlin, and is part owner of Russia's Aeroflot airline. He was ranked by Forbes magazine last year as the world's 358th richest man, worth more than $3 billion, although his fortune has been hit hard by the global economic downturn.
He is part of a wave of Russians who have snapped up UK assets in the past few years. Roman Abramovich bought London's Chelsea Football Club in 2003, Alisher Usmanov is the largest investor in the Arsenal Football Club and Nikolai Smolensky owns British sports-car maker TVR Engineering Ltd.
Lebedev said in a statement that he and his family "are strong supporters of a free and independent press and we greatly admire the Evening Standard as an iconic publication with its pedigree of fine journalism and commentary."
"We are committed to strengthening the newspaper's competitiveness and look forward to working with Associated, which will continue to be involved as a minority shareholder," he said. He assured people that he does not intend to interfere with the Standard's editorial direction.
"The investment planned by Lebedev secures the future of the paper," DMGT chief executive Martin Morgan said. "DMGT will benefit from the reduction in losses and will continue to invest in the development of our newspapers and other businesses."
Lebedev has also signaled interest in The Independent, a UK national newspaper with daily circulation of about 200,000 that has experienced job losses, budget cuts and a decline in ad revenue from print display and classified advertising amid the credit crunch.
The Evening Standard, which has lost market share in part because of competition from free newspapers passed out on London streets and at train stations, had an average circulation of about 287,000, the most recent figures from the Audit Bureau of Circulation show.
The transaction is expected to take place in February following consultation with employees.
Lazard & Co advised DMGT, whose shares were down 2.4 per cent at 254.25 pence after the widely expected announcement, slightly underperforming a 1.9 per cent weaker European media index.