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Guardian Media Group's Manchester Evening News

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9:30 am, December 17, 2009
Guardian Media confirms talks on Manchester Evening News sale

Guardian Media Group confirmed today that it has held "exploratory" talks about selling its GMG Regional Media division, which includes the Manchester Evening News.

The Daily Telegraph reported that it has discussed a possible disposal with to main market-quoted Trinity(LSE: TNI), which publishes the Liverpool Echo and about 240 regional papers as well as the Daily Mirror.

Trinity is said to discussed buying the division, which comprises MEN Media Ltd, owner of the evening title and a string of 21 weekly titles in Greater Manchester, Cheshire and Lancashire and television station Channel M, plus the Surrey Advertiser group.

GMG issued a statement saying its portfolio of titles was "under review on an ongoing basis".

It added: "Since the publication of the Digital Britain report we have been considering the potential for further consolidation within the regional press sector, and as part of this there have been some exploratory talks regarding our regional media business.

"However these are at a very early stage and it is not clear whether they will progress or what the outcome is likely to be."

The Daily Telegraph story cited an unnamed source as saying that GMG was prepared to cut its ties with Manchester, which go back nearly 200 years, in order to maintain the owning Scott Trust's main purpose of securing the future of The Guardian. It said the sale may raise as little as £40m.

GMG has admitted that profits in its regional division collapsed by 85 per cent in the year to March due to the recession and the migration of advertising revenues from jobs, property and motors to the internet.

The Manchester Evening News has been forced to cut its free city centre copies to 20,000 from 80,000 on Monday, Tuesday and Wednesday in order to cut costs and as a result is unique in the regional press in no longer having an ABC certificate, which verifies the number of copies distributed.

MEN Media has also cut more than 100 jobs so far this year including about 80 journalists.

Crain's reported last month that the company is now considering whether to abandon its purpose built headquarters in Manchester's Spinningdields district in favour of a move to offices on Trafford Park industrial estate owned by Trafford Park Printers, a company part-owned by GMG.

GMG lost £89.8m in the year to March, compared with a profit of £306m in 2008, when it had a windfall gain from the sale of 49.9pc of the company which owns Auto Trader.

Its national newspapers and websites lost £36.8m and the company considered but then abandoned plans to close down The Observer to stem the losses.

GMG Regional Media's results for the year to March 2009 showed operating profits of £500,000, down from £14.3m in 2008, on turnover of £94.5m, down from £120.5m.

The company said in August that the regional newspapers, which will face heavy exceptional costs to cover redundancy payments in the current financial year, had been trading at a loss for six months.

An MEN Media spokesperson today told Crain's it had no comment to make on the report.

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