le Monde, le Parisien

What's happening with the two sensitive dossiers of the newspaper industry?

Le Monde is still in a phase of interrogations. Last week, the closing proceedings were deeply disturbed by the action of the Spanish media group Prisa which refused to be diluted by the 3 new holders of the daily. Prisa wanted to be nothing else than the unsollicited fourth partner, part of the holding company "Le Monde libre" that belongs to Berger, Niel and Pigasse (called BNP). A last minute negociation between Jean Michel Darois, Prisa s'lawyer and the lawyers of BNP and the journalists association (SRM) led to a compromise that will allow Prisa to enter "le Monde libre" and give an advice on the main decisions. What is important is that Prisa agreed on the price of its withdrawal if it intends to leave: 3,5 million euros, the same amount Lagardère received for its exit, a sum BNP can easily afford.

What remains to be seen is the way BNP will sort out the big management challenges of the deficit ridden newspaper. Experts agree that the top priority is the printing unit. Its population of 300 workers could easily be reduced to 100. The net annual saving would be 12 million euros well enough to stop the global losses. Other challenges concern the advertising and the delivery. Most regional newspapers are willing to deliver le Monde through their very efficient network. It would be cheaper and better than Presstalis whose future looks dark indeed. All added, there is no reason to doubt that le Monde could at last break even within 2 years. A good news for BNP, if they act on time.

As far as le Parisien is concerned, the decision of its owner, Amaury to put an end to the sale offer can only bring trouble. The new CEO of the group, Philippe Carli, who has no experience of the media (his previous job was at Siemens), will have to appease the newsroom which is deeply disturbed by the attempt from its historic owner, to get rid of a good newspaper that doesn't make money. It won't be easy to make it more profitable in a declining market when sales and ads are going South.

Even more awkward will be the shaping of the future of the print in a group that believes more and more in electronic communications. Sooner or later, hard choices will have to be made and it is likely that the sale of le Parisien is only postponed. And yet, this sobering experience showed that the value of newspapers is not what it used to be. A hard lesson for Amaury executives;

However, President Sarkozy let it known that he was happy about the decision of Amaury to keep this influential daily.

Are journalists opinion makers?

Cevipof, a research center on French politics connected to Sciences Po and the school of journalism organized on Monday October 25 a fascinating debate on journalism and public opinion. The 3 speakers, Jean François Fogel, Dominique Reynié and Geraldine Muhlman are academics who have done a lot of research on these topics.

What is the relationship between journalism and public opinion? In a famous book "Public Opinion", published in the 1920's, Walter Lippmann described well this complex interaction. However, his position stressing the particular responsability of journalists was criticized by Dewey who favoured a form of community including journalists among others.

In the early nineties, Jay Rosen promoted the idea of public or citizen journalism. It was the idea, out of Dewey, that the journalists should listen more to the public and let them contribute to the production of information. The aim was to get back readers who had been moving away as early as the eighties, well before Internet.

Geraldine Muhlmann stated clearly that she considered the promoters of public journalism had gone too far. It is not enough to interest the public, good journalism implies a fair assesment of facts. One must find a middle way between the positions of Lippmann and Dewey.

Dominique Reynié did not disagree: the coverage of news is a proper job and must follow the rules of checking the facts. The public is not able to provide that kind of information but it is not possible to really influence the public opinion.

However, I would have liked to hear more from the speakers on the last events in the American world of the media: what about the manipulation of the press before the invasion of Irak? How to explain the success of blatantly biased TV Channels such as Fox or CNBC? Is it due to the influence of public opinion? A lot more could be said but time was too short.

digital is the solution

The New York Times and the Figaro group have just published their financial results. Both show uneven figures for the print and promising increases in digital activities that amount to 20% of the income of the Figaro with an increase of 40% of Internet ads in 2010. The Times has reduced its losses for the third term of the year but the circulation of the print newspaper is going down by 4%. However, the website registers a steady rise of advertising.

Still it is a long way before the web provides enough resources for top newspapers like the NYT, the Figaro or le Monde. The I-pad and I-phone applications won't be the solution as the cash they provide will be shared with avid tablets makers such as Apple and others.

The figures delivered by Mediametrie for the audience on mobiles are not very exciting for the media. Figaro is 11th and le Monde is 19th. Google and Facebook dominate the market and will, doubtless get the reward in terms of advertising. Obviously, a new strategy has to be thought out if the media intend to depend less on social networks and agregators.

le Parisien again

Are we getting close to a solution for le Parisien? Here, there are two schools of thought.

Some argue that the withdrawal of Dassault whose whole staff apart from Mougeotte, the Figaro editor, was hostile to the takeover, deprives Amaury, the owner, of any possibility to negociate. There remains only one candidate, Groupe Rossel and Capital fund which is not the best way to improve the selling price. In that case, Amaury would pull out and wait for a better opportunity.

Others think that the sale will take place with Rossel anyway because the future of print is not promising, to say the least and le Parisien will be a less valuable asset in five years.

Rossel people are willing to move forward but don't intend to fulfill Amaury's unrealisitc wishes. They consider that the press group is worth at most 120 million euros. They hope to reduce drastically the operating costs of the two dailies, Parisien and Aujourd'hui en France and improve the Website in order of making the whole business very profitable. However, it will be a long and costly process and agreement on printing on Amaury presses is a stumbling block that could derail the negociation.

It is not easy, these days to sell a newspaper.

The press dossiers go on

On October 13 the annual party of the regional newspapers association (SPQR) was, as usual the great gathering of the powers that be in media and politics. Contrary to his predecessor Jacques Chirac, Nicolas Sarkozy did not show up but the prime minister, François Fillon and a dozen of members of the Government did the trip to Cercle Interallié and discussed with the barons of the regional press.

There were, of course, many questions and few answers on the topic of the day, the sale of Le Parisien-Aujourd'hui en France. Two candidates are still running: Dassault and Groupe Rossel. Both are working hard on the dossier and don't favour the exorbitant price suggested by Amaury. The deal should be fixed within 3 weeks, at about 100 millon euros. The new buyer will obviously face huge expenses for financing the departure of journalists and various executives who fill the ranks of a heavy and costly organization. However, one of the candidates told me that he was fairly optimistic about the outcome. The newspaper could be very profitable in the future.

Things don't look so promising for Presstalis the giant delivery organization that stumbles from one crisis to another. If le Figaro is distributed by le Parisien and le Monde by regional newspapers, Presstalis will lose a not profitable but important share of its business. Tough decisions will have to be made before the end of the year.

the value of classified

The announcement of the sale by Spir of 50% of leboncoin.fr to its partner, Schibsted, came as a surprise. It was even more so if one considers the amount of the sale: 200 million euros which means that the site of free ads founded 4 years ago, has a value of 400 millions. If you remember that the Parisien-Aujourd'hui en France, with a circulation of about 480 000 copies could be sold for 100 million, you realize that there is quite a premium on internet and classified ads. They are obvously more sexy than cumbersome newspapers which are too be printed by huge presses and carried all over the country.

However, a closer look at facts and figures makes a different impression. In his excellent newsletter http://www.mondaynote.com, Frederic Filloux shows that the growth capacity of classified ads on Internet is still impressive. Moreover, there is little competition for free ads in France. Leboncoin can apply with great success the Scandinavian system of its sister site Bloket which combines a huge offer of free ads and a more limited but very profitable paid service for professionnals;

Still, there is another explanation for the buying by Schibsted. The Noewegians intend to set up a European group of classified web sites included in Schibsted Classified, a company due to be introduced in 2012 on London stock exchange. In that case, the soaring value of the shares could bring a tremendous profit for this very dynamic media group.

Journalists should be very happy that aging tycoons like Murdoch or Dassault are still willing to invest in old fashioned newspapers. On that point, see the comment of Jack Shafer in http://www.slate.com where he explains that the British press is lucky to get the subsidies of Murdoch for the failing Times and Sunday Times.

Parisien. The Dassault solution

It is common knowledge that President Sarkozy will never let the Parisien fall into hostile hands. It is the reason why I never believed in a foreign solution. The fall of David Montgomery, chairman of the press group Mecom makes it even more unlikely. Montgomery has always been interested by French newspapers, considering probably that their poor management left a lot of opportunities for improvement. Now, he is gone and his successors will probably look elsewhere for quick profit.

Sarkozy has two friends willing to invest in newspapers, Bolloré and Dassault. It appears that Bolloré proved too stingy for the taste of the sellers, Amaury family. So, what about Dassault? He certainly has enough cash to buy the regional daily of Ile de France and its companion, the national Aujourd'hui en France. His team includes competent managers, headed by Francis Morel, who proved fairly efficient with le Figaro.

As for synergies, things look a bit awkward. The delivery network owned by le Parisien could prove useful for le Figaro in Ile de France but Figaro's printing unit is probably not big enough to produce two morning dailies. It means that the eventual buyer would have to keep Saint Ouen, the printing unit of le Parisien, an unwelcome prospect.

Still, Serge Dassault who wants to get back his job as mayor of Corbeil and intends to keep his position at the Senate has a strong incentive to own the regional newspaper. He only needs to offer a decent price to Amaury family. The sellers expected 200 million euros. It is said that Bolloré offered 50 million. Would a 100 million offer make the deal? We'll know pretty soon.