psmith, journalist

It was the title they’d never sell. Despite everything – INM’s massive debt and pending bond repayments, the falling revenue, the potentially rebellious staff – Independent News & Media‘s goal over the last two years has been: maintain and protect The Independent at all costs.

But now sell is exactly what INM is doing, handing the title to Alexander Lebedev for £1, the price of one copy – and paying him £9.25m to take it off their hands, due to long-term printing deals Independent Newspapers can’t get out of.

So here’s a lesson in why not believe a word that media executives say about the future of their businesses, especially when it concerns newspapers.

Though a sale was never ruled out, INM executives privately and publicly said that INM would rather sell off its digital investments and equity shares in media businesses around the world than divest its most famous title. Then followed sell-offs of stakes in digital companies and foreign publishers.

INM CEO Gavin O’Reilly’s protestations that the company didn’t want to sell the paper – because, he argued, they wouldn’t need to – now look like the bizarre mixture of fantasy, denial and spin. This is O’Reilly talking to The Observer in January 2008:

The point about the Independent’s losses is it allows for extremely efficient tax-planning. It is cash-neutral… There are people who don’t want to listen, but the Indie is the epicentre of the group.

By this point the bitter row with dissident shareholder Denis O’Brien had already spilled over into the press – the Irish business magnate desperately wanted INM to sell off the Indie for hard-boiled business reasons: it made a fat loss while other parts of INM were profitable.

O’Brien’s argument always made sense. Unless you believe in news for news’s sake – and unlike Lebedev, institutional shareholders do not – surely there’s a case for selling the Indie? Not for World Association of Newspapers president O’Reilly, who kept on spouting about the power of print.

Take this ludicrous example of Mandelson-esque media handling from O’Reilly when asked a perfectly reasonable question from The Guardian’s Richard Wray about if the Indie will be sold:

All of these stories, whether on MediaGuardian or Marketing or Media Week, have been sensational but wrong. The Independent remains an important part of the group and is certainly proving more resilient than most of its competitors – I am not saying it in a bitchy way, but even more so than Guardian Media.

Fast forward 18 months and the Indie is sold to a benevolent Russian oligarch. Roy Greenslade called it right when he said that O’Reilly was less committed to the Indie than his father Tony, who built up INM to a global empire and bought the Indie.

Where does this leave O’Reilly’s rhetoric about the power of newspapers? He can’t think they are that powerful if he’s prepared to sell INM’s flagship “calling card” title. Lebedev has promised editorial investment and safeguards – making the sell-off more morally acceptable to all concerned – but O’Reilly is, he says, a true believer in the commercial power of print in the UK and elsewhere. That fervour rings hollow now.

This story tells us two things: 1. Don’t fully believe anything a CEO says about the strength of a division when the figures quite clearly show it is in crisis and 2. everything is for sale.

p.s. It sounds ridiculous at first, but should we really dismiss rumours that Rupert Murdoch will at some stage sell off The Times?

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• Billionaire buys Independent for £1 (news.bbc.co.uk)
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