MercoPress. South Atlantic News Agency

Former KGB spy buys London Evening Standard

Mr. Alexander Lebedev

Russian ex-KGB agent turned businessman Alexander Lebedev announced Wednesday the purchase of the London Evening Standard newspaper for the sum of £1.

The paper's publisher - the Daily Mail & General Trust (DMGT) said that its newspaper division, Associated Newspapers Ltd, has agreed the sale of a majority interest in the Evening Standard for a nominal sum to Evening Press Ltd, a company formed by Alexander Lebedev and his son Evgeny Lebedev and owned by Lebedev Holdings Ltd. A new company, Evening Standard Ltd, will be established that will own the Evening Standard and in which Associated will be a minority shareholder with 24.9%. Associated will continue to provide services, including printing and distribution, to the Evening Standard for an initial period, with the opportunity to extend these arrangements by agreement. Alexander Lebedev is the major shareholder, alongside former President Mikhail Gorbachev, in the well-regarded and independent Russian newspaper, Novaya Gazeta. Novaya Gazeta is one of the few pro-democracy newspapers in Russia and has a reputation for high-quality reporting. Evening Standard Ltd will establish a new editorial committee that will safeguard the principle of editorial independence. The Chairman and President of the Board of Evening Standard Ltd will be Alexander Lebedev. Justin Byam Shaw, an adviser to Lebedev Holdings, will be Deputy Chairman and Evgeny Lebedev will be Senior Executive Director. Completion of the transaction is expected to take place in February 2009, following an employee consultation process. No other newspaper publication owned by DMGT plc is involved in the transaction pointed out Evening Standard Ltd. "We are very proud to have owned the Evening Standard. It has a long and distinguished history as one of the world's great city newspapers, based on outstanding journalism", said Lord Rothermere, chairman of DMGT plc. He added that "Alexander Lebedev shares my commitment to newspapers and will continue to invest in the Evening Standard. I would like to take this opportunity to re-iterate that DMGT remains fully committed to journalism and newspaper ownership". Alexander Lebedev, Chairman of Lebedev Holdings, said that his family "is delighted to be investing in the Evening Standard. We are strong supporters of a free and independent press and we greatly admire the Evening Standard as an iconic publication with its pedigree of fine journalism and commentary. We are committed to strengthening the newspaper's competitiveness and look forward to working with Associated, which will continue to be involved as a minority shareholder". "We believe that the agreement announced today is in the best interests of the staff and our shareholders. The investment planned by Mr Lebedev secures the future of the paper. DMGT will retain a 24.9% stake. We will continue to provide a range of support services to the paper but will not have a seat on the board or any involvement in its editorial policy. DMGT will benefit from the reduction in losses and will continue to invest in the development of our newspapers and other businesses" said Martin Morgan, CEO of DMGT plc, According to BBC Mr Lebedev's fortune, which is reported to be worth around 3.1 billion US dollars, was made mostly through banking, insurance companies and from his stake in the Russian airline Aeroflot. In 2006, he teamed up with ex-Soviet leader Mikhail Gorbachev to buy shares in the Russian paper Novaya Gazeta and his property portfolio includes a string of boutique hotels across Europe. BBC media correspondent Torin Douglas has said the Evening Standard had been hit by the advertising downturn and a fierce free newspaper battle in London. Mr Lebedev has also expressed an interest in buying out other struggling newspapers both in the UK and the United States. In related news it was announced that The New York Times is set to receive a 250 million US dollars investment from Mexican billionaire Carlos Slim to help the paper finance its business. Faced with having to pay back substantial debts, the loan from the telecoms magnate will give the paper some financial breathing space. In return, Mr Slim's stake in the paper will be increased, making him the second largest shareholder. The biggest shareholder in the paper is the Ochs-Sulzberger family, which has controlled it for 100 years. The paper's chief financial officer James Follo said Mr Slim's interest is purely financial. The New York Times has a circulation of around a million, making it the third biggest selling newspaper in the US. US newspapers have been hit by a decline in traditional advertising as the economy has slowed and some people have turned to the internet for their news. Last month, Tribune Co, which owns the Chicago Tribune and Los Angeles Times, filed for bankruptcy protection as it became unable to pay back 13 billion in debt. Last week, the Minneapolis Star Tribune also filed for bankruptcy protection.