View all newsletters
Sign up for our free email newsletters

Fighting for quality news media in the digital age.

  1. Archive content
January 15, 2009updated 16 Jan 2009 5:58pm

Mecom emerges from debt trap — for now

By Peter Kirwan MM blog

Mecom’s sale of its German newspapers will allow the company run by David Montgomery to pay off around one-quarter of its â‚¬650m net debt.

Mecom is selling Berliner Zeitung and the Hamburger Morgenpost for €152m.

You might be inclined to think of this as an object lesson for Mr Montgomery. After all, he cumulatively laid out some €200m to break into the German market.

But that would be to ignore the effect of currency movements since London-based Mecom ventured into Berlin and Hamburg.

According to Dan Sabbagh at the Times, the pound’s recent collapse means that Mecom will “roughly break even” on the deal. By contrast, the best guess of Scandinavian media blogger Kristine Lowe seems to be that Mecom will absorb a small loss.

Either way, David Montgomery appears to have secured his company’s future and emerged from the credit crunch on something like an even-stevens basis. It could all have been a lot, lot worse.

The remaining journalists employed by Mecom in Scandinavia will probably agree that it couldn’t have happened to a nicer man. Some might regret the fact that their papers weren’t sold instead. But presumably their jobs look a mite safer this week.

Content from our partners
Publishing on the open web is broken, how generative AI could help fix it
Impress: Regulation, arbitration and complaints resolution
Papermule: Workflow automation for publishers

If you’re a debt-laden publisher, finding a buyer for newspaper assets is hard enough. Emerging from any subsequent deal without losses is quite a feat.

Executives at Johnston Press, Newsquest and Trinity Mirror must be green with envy. 

Email pged@pressgazette.co.uk to point out mistakes, provide story tips or send in a letter for publication on our "Letters Page" blog

  1. News
January 15, 2009

Mecom emerges from debt trap – for now

By Peter Kirwan

Mecom’s sale of its German newspapers will allow the company run by David Montgomery to pay off around one-quarter of its â‚¬650m net debt.

Mecom is selling Berliner Zeitung and the Hamburger Morgenpost for €152m.

You might be inclined to think of this as an object lesson for Mr Montgomery. After all, he cumulatively laid out some €200m to break into the German market.

But that would be to ignore the effect of currency movements since London-based Mecom ventured into Berlin and Hamburg.

According to Dan Sabbagh at the Times, the pound’s recent collapse means that Mecom will ‘roughly break even’on the deal. By contrast, the best guess of Scandinavian media blogger Kristin Lower seems to be that Mecom will absorb a small loss.

Either way, David Montgomery appears to have secured his company’s future and emerged from the credit crunch on something like an even-stevens basis. It could all have been a lot, lot worse.

The remaining journalists employed by Mecom in Scandinavia will probably agree that it couldn’t have happened to a nicer man. Some might regret the fact that their papers weren’t sold instead. But presumably their jobs look a mite safer this week.

Content from our partners
Publishing on the open web is broken, how generative AI could help fix it
Impress: Regulation, arbitration and complaints resolution
Papermule: Workflow automation for publishers

If you’re a debt-laden publisher, finding a buyer for newspaper assets is hard enough. Emerging from any subsequent deal without losses is quite a feat.

Executives at Johnston Press, Newsquest and Trinity Mirror must be green with envy. 

Topics in this article :

Email pged@pressgazette.co.uk to point out mistakes, provide story tips or send in a letter for publication on our "Letters Page" blog

Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
  • Business owner/co-owner
  • CEO
  • COO
  • CFO
  • CTO
  • Chairperson
  • Non-Exec Director
  • Other C-Suite
  • Managing Director
  • President/Partner
  • Senior Executive/SVP or Corporate VP or equivalent
  • Director or equivalent
  • Group or Senior Manager
  • Head of Department/Function
  • Manager
  • Non-manager
  • Retired
  • Other
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
Thank you

Thanks for subscribing.

Websites in our network