Le Monde looking out for new suitors

In newly liberated Paris in 1944, a French journalist, Hubert Beuve-Méry, founded Le Monde in the spirit of the Resistance, pledging to keep the newspaper “politically, economically and morally” independent.

To preserve those freedoms, the reporters and editors were granted extraordinary powers, including a controlling ownership stake and the right to dismiss their editor and publisher.

Now, in a distinctively French twist on a story that has been playing out at many newspapers around the world, one of Beuve-Méry’s three pillars of independence, the financial one, is set to fall. When it goes, many of the journalists’ privileges may go, too. That, it appears, is the cost of survival at one of the world’s most renowned newspapers.
Le Monde, a frequent critic of global capitalism, has put out an international tender for new investment that could result in the journalists and other employees handing control to an outsider within weeks. Without new funds, the newspaper might not be able to keep printing and paying wages through the summer.

Fortunately for Le Monde, several potential buyers have emerged. With key meetings of Le Monde journalists and directors set for the middle of this month, the paper’s reporters, editors and managers are auditioning them to see which would be most likely to uphold the newspaper’s traditions while giving it the stability needed to plan for the future.

Among the potential investors, the most vocal expressions of interest have come from Claude Perdriel, owner of Le Nouvel Observateur, a news magazine. Le Nouvel Observateur shares Le Monde’s centre-left worldview, which is reassuring to the newspaper’s journalists. But there are obstacles to a deal with Perdriel. Analysts question, for example, whether he would be able to muster the necessary funds, including an initial investment of perhaps €100 million, or $122 million, to secure a majority stake and keep the paper running.

“If the conditions for us to make a profitable company are not satisfied, we will not go there,” said Denis Olivennes, the publisher of Le Nouvel Observateur.
Perdriel’s approach has flushed out other potential bidders, including a team led by Matthieu Pigasse, a banker who heads Lazard France; Pierre Bergé, co-founder of the
YvesSaintLaurent fashion house; and Xavier Niel, a telecommunications entrepreneur.
Several foreign publishers have also said they are looking at Le Monde, including Ringier of Switzerland and the Espresso Group of Italy. Fottorino said he had no objections to foreign ownership, which can be a sensitive subject in France, as elsewhere. “Le Monde has always been a very European newspaper,” he said. “One would think that, if we share the same sensibilities, why not?”

Any new investor would inherit big challenges, including debts of around €100 million. Like other French newspapers, Le Monde struggles with high printing and distribution costs, a problem exacerbated by the tenuous hold that a powerful printers’ union exerts over that side of the business. Analysts say this contributes to low newspaper readership levels in France; some French newspapers are kept alive largely through government subsidies, and several have been sold recently.

Like newspapers everywhere, Le Monde has had a hard time generating new revenue from its website, which it has struggled to integrate with the print operations. The separation is underlined by a complex shareholding structure, under which another French publisher, Lagardère, owns a 34 per cent stake in Lemonde.fr.
Lagardère has said it is not interested in increasing its investment in Le Monde. But it has not said how it might react to a new investment from outside, which would dilute the value of Lagardère’s existing investment. Another existing shareholder, the Spanish publisher Prisa, which owns the newspaper El País, is in a similar position. There has long been speculation that Prisa, which owns 15 per cent of Le Monde SA, might be also be interested.

But any such bid could face opposition from Le Monde employees, who worry about the Spanish company’s reputation for cutting costs. And Prisa, like Le Monde, is already weighed down with debt.

Threat of bankruptcy looms
If no new investment is found for Le Monde, the threat of bankruptcy looms. That could result in the separate sale of the company’s assets, including the newspaper, though analysts see little chance that Le Monde would cease publishing. “Like a bank, it’s too big to fail,” said Thierry Dussard, a journalist who teaches at the Institut d’Études Politiques in Paris. “Despite all its failings, it remains the best French newspaper.”
Assuming it comes through the immediate crisis, Le Monde will have to find a way to end a slide in readership and advertising. Over the past decade, circulation has fallen by about a quarter, to little more than 320,000. Advertising revenue fell about 20 per cent last year.

“A newspaper can only survive if people read it,” said Pierre-Henry Beuve-Méry, a son of the founder, who has been watching the developments at Le Monde with apprehension.
Known for weighty political analyses, Le Monde has moved to make its content more accessible and succinct. The paper has prominently featured a series of scoops about a sex scandal involving French soccer stars, for example.

Fottorino, a former journalist, said the recent changes would have the newspaper on the right track once its immediate financial squeeze eased. He said he would fight to protect editors’ and reporters’ jobs in any agreement with new investors.
While the journalists realise that they will have to give up their right to choose the publisher of Le Monde, said Gilles Van Kote, president of the organisation that controls the journalists’ stake in the company, they hope to maintain control over the choice of the top editor. They also want guarantees of job protection, after several rounds of job cuts over the past five years reduced the number of newsroom employees by about 25 per cent, to 270.

In the newsroom, journalists said the mood had improved markedly in recent weeks on news that several potential investors had emerged. “It’s like a new page in the book,” Van Kote said. “We are journalists, not businessmen.”
International Herald Tribune