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July 25, 2008

Not only in Kamchatka: What happened when Mr Sabbagh went down to the woods. . .

By Peter Kirwan MM blog

As this week’s events in Kamchatka reminded us, bears have sharp claws and teeth. The latter bite chunks out of investors frequently. And commentators get bitten, too.

The Times has had a torrid time of it in recent weeks. On 16 July, its reporter Robert Lindsay suggested that an analyst had concerns about Trinity Mirror breaking its banking covenants.

Breaking promises to bankers ranks as one of the City’s greatest sins. Accordingly, Trinity’s shares slumped. Acting rapidly, the company pushed out a highly unusual announcement outlining the actual terms of its agreements with the banks.

Next, Sly Bailey reached for her lawyers. What is being coyly described as an “exchange of lawyers’ letters” ensued with The Times.

On 17 July, Dan Sabbagh, the paper’s media editor, wrote up what seemed like a considered account of Trinity’s position.

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(That said, Sabbagh did quote Richard Desmond’s mischievous suggestion that he would look to buy Trinity Mirror when it went into administration. The following day, for good measure, he wrote an accompanying piece hinting darkly that it simply wasn’t good enough for Trinity to blame its predicament on “irrational advertisers and an advertising downturn”.)

But this, it seems, wasn’t the end of The Times’s media reporting troubles.

This morning, in a space normally reserved for one of Sabbagh’s jaunty vignettes about the media business, The Times carries a curious legal-sounding clarification.

It suggests that Telegraph Media Group was irritated by a piece by Sabbagh that appeared in the paper’s Media Business section on 4th July.

Partly or wholly written by m’learned friends, the “clarification” makes it clear that Sabbagh had no business comparing Trinity Mirror with The Telegraph Media Group.

Why not? Well, as the clarification points out, Trinity Mirror has a pension fund of £1.5bn and a deficit against that liability of £125m.

We’re further informed that the Telegraph Media Group has no pension fund liability — and “more than sufficient funds to discharge all of its borrowings whenever it chooses”.

Oddly, I can’t locate the original article via Times Online’s search engine. (Perhaps the Media Business section is filed away in a special cupboard somewhere on the site. Maybe Mr Sabbagh will reply to my inquiring email with a link. . . )

But given that the Barclays are to the Telegraph what Roman Abramovich is to Chelsea Football Club, the clarification does seem a little superfluous.

Funnily enough, it may achieve the opposite effect to the one intended.

Although I haven’t considered the possibility until now, it seems entirely obvious that the Barclays will need to write down the value of their vast property estate during the next year or two.

Whether this will force a change in the tempo of investment at Telegraph Media Group is anyone’s guess.

But in the current market, prospects that once seemed as far-flung as Dr Who’s travel itinerary are rapidly becoming as real as the bus stop at the bottom of the road.

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