Johnston Press, owner of The Scotsman and the Yorkshire Post, said it has conditionally agreed to acquire the business and certain assets of the cut-price i newspaper from Independent Print Ltd for £24 million.
The Scotsman owner said it will give the i newspaper — which currently sells for 40p on weekdays and 50p on Saturdays — its own dedicated website.
Meanwhile, the print versions of The Independent and Independent on Sunday are to be closed down in March, leaving only the online edition, owners ESI Media told staff in an email (*see below.)
Johnston said the i has a 20% market share of the newspaper “quality market” or 8% of the combined “quality” and “mid-market” newspaper sector and was named National Newspaper of the Year in 2015.
Regional press specialist Johnston, which owns more than 200 regional and local news titles, said 77% of i readers are from the ABC1 demographic category.
It said said the average reader of the i is aged 53 and that 63% of its readership is male.
Ashley Highfield, chief executive of Johnston Press said: “This is a transformational acquisition for Johnston Press and an important step towards delivering our long-term strategy.
“i is a highly regarded newspaper with a clear market position and a loyal readership.
“By joining with Johnston Press the combined circulation will be equal to 9% of national daily circulation, making us the fourth largest player in the market.
“This enhanced reach represents a significant growth opportunity for Johnston Press in terms of national print and digital advertising revenue. It also rebalances our revenues towards less volatile circulation revenues.
“With our considerable digital experience the combination of Johnston Press and i will also allow us to grow digital audiences and revenues through the creation of inews.co.uk.
“We are delighted with the positive reaction of shareholders to the deal and are excited by the opportunities this acquisition brings. We look forward to working with the team at i as we deliver the next phase of Johnston Press strategy.”
Johnston listed what it considers the benefits of the acquisition by saying:
1. “The Directors believe that the combination is a strong strategic fit. i will help build the group’s national print and digital display advertising revenues through access to a number of strategically important local markets and the large and attractive ABC1 demographic category which comprises 77% of i’s readership, as well as a number of blue chip advertisers, the majority of whom do not currently advertise with Johnston Press’ titles.”
2. “Increased scale and contribution of circulation revenues. i’s circulation revenue grew at 24% year on year in 2015 and accounted for 64% of its total revenues in the financial year to 27 September 2015 — the equivalent figure for Johnston Press in the financial year to 3 January 2015 being 29%. This higher proportion will help Johnston Press to stabilise its combined circulation revenues.”
3. “Accelerating growth of digital audiences and digital revenues. i does not currently have a standalone website. The directors believe this offers an opportunity to launch and develop digital products associated with i’s brand using Johnston Press’ network, and will help grow the 1XL digital advertising network.”
4. “Developing primary news brands. The directors believe that the acquisition of i would build strength into the existing portfolio of Johnston Press’ brands, such as The Scotsman, The Yorkshire Post and the Belfast based-Newsletter, enabling the group to offer a package of ‘premium brands’ to the market.”
ESI Media owner Evgeny Lebedev explained his company’s moves in a long email to staff. Here are excerpts:
“Today the Independent titles announce an historic transition. At a time when our journalism is read and respected by more people in more places than ever before, we are embracing an exclusively digital future …
“We faced a choice: manage the continued decline of print, or convert the digital foundation we’ve built into a sustainable, profitable future.
“In choosing the latter, we will create 25 new content roles, launch a new subscription mobile app, enhance the redesigned, thriving independent.co.uk, open new editorial bureaux in Europe, the Middle East and Asia, and invest further in our New York-based US operation.
“We will rename the hugely successful i100 site as indy100.com
“I can now confirm we are selling The Independent’s sister paper, i, to Johnston Press, subject to Johnston Press shareholder approval.
“In addition, we will cease to print The Independent and Independent On Sunday. The Independent’s last edition is expected to be on Saturday 26th March and the last Independent on Sunday is expected be on Sunday 20th March, enabling us to focus our collective energy on the digital Independent.
“I believe this is the right decision at the right time for the world’s most free-thinking news brand …
“We expect a significant number of employees to move across to Johnston Press under the Transfer of Undertakings (Protection of Employment) Regulations, known as TUPE. A number of employees at Independent Print Limited will be made redundant.
“I regret this, but can confirm that all those on employment contracts and long-term casuals who are being made redundant will receive two weeks’ pay, subject to conditions, for every year worked, plus your notice period …
“My family bought and invested heavily in the titles because we believe strongly in its values …
“Over the past six years alone we have launched a sister title that now outsells The Guardian, grown independent.co.uk to nearly 70 million global users a month, and won countless awards for our unique contribution to news and culture, with values of bravery, compassion, scepticism and wit to the fore.
“With the spirit of a start-up, and all the authority of our heritage, this transition means the world’s most innovative newsbrand can embark on a sustainable future. As we set about that, I would like to thank everyone for the part they have played in the development of this great institution.”