'Don't treat us like MUGs,' partners to tell Metro bosses

Anderson: frustrated that the potential of Metro is not being recognised

Associated’s national urban news-paper Metro, three years old this month, and its three regional franchisees are falling out over the cost of the title – claimed to be losing £7m a year.

Earlier this year, Guardian Media Group, Regional Independent Media and Trinity Mirror formed the Metro Users Group – its acronym is apt, they feel – to try to persuade Associated to reduce the costs, particularly in editorial, to them.

Sources within the companies say that of the claimed £7m loss, £4m is borne by Associated and the rest by them. An independent audit commissioned by the franchisees shows costs could be cut significantly, they say. They have had a meeting with Metro executives in the last month to raise their concerns.

Reluctant franchisees at best, they are co-operating in their territories of Manchester, Birmingham, Sheffield, Leeds and Newcastle, only to avoid an outright newspaper war.

The same sources claim the commuters’ free newspaper hasn’t met its financial projections, particularly when the economy is in a downturn and regional newspapers are cutting costs. They also say distribution of Metro is not hitting its targeted audience of young urbanites in their areas and that sales of some of their own papers are down where Metro is active.

But Mike Anderson, managing director of Metro, disputes the loss figure and says costs are in line with what the franchisees signed up for. He is impatient that the potential of Metro is not being recognised by his partners.

With Metro back up from 40 to 56 pages last week, he is betting that in the next few years sales of their newspapers will increase as Metro "churns" its market into paid-for title readers.

Stressing that the free was "not going to go away", Anderson said: "We are very much about trying to make two quid rather than save one quid. It’s what works. What we are on to collectively is probably the best chance the regional press has had of getting success in 30 years."

He insists National Readership Survey figures for Metro (64 per cent ABC1 readers, 77 per cent under the age of 44) show it is getting to its young, in-work audience. But he agrees there is work to be done on the 830,000 distribution in the time slot – 7am to 9.30am – where Metro should be concentrated to catch them.

"Distribution will rise – we are already the sixth biggest newspaper in this country," said Anderson. "And I think some of the biggest falls in regional circulation have been in areas where there are no Metros, like Cardiff. Any new business has teething issues, with which we are dealing."

He feels the partners are not getting their head round the fact that Metro is a national newspaper, bigger than The Times, and needs a commensurate budget.

"We operate in a way where editorial is the king. For a national our budget is tiny. For a regional newspaper, it looks quite high," he conceded.

By Jean Morgan

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