City AM, the London-based business newspaper, is close to calling in administrators after a weeks-long search for a buyer failed to produce a solvent deal.
Sky News has learnt that the directors of the title’s parent company are preparing to appoint BDO, the accountancy firm, to commence an insolvency process in the coming days.
Sources said on Tuesday that executives remained in discussions with prospective buyers of the nearly 18-year-old free sheet title, which saw advertising revenues hit hard by steep declines in commuter footfall as a result of the COVID-19 pandemic.
Soaring print costs have also exerted a toll on the finances of City AM and its rivals.
One insider said a pre-pack sale – in which administrators are appointed to a company prior to an immediate sale of some of its assets – was a strong possibility, with a notice of intention to appoint administrators likely this week.
City AM, which has been given away at hundreds of transport hubs and other locations in London and the home counties since 2005, has a daily print run of 70,000 and an audited circulation of more than 67,000.
The newspaper is 50%-owned by a group of Dutch investors, with 25% stakes held by Lawson Muncaster, managing director, and chief executive Jens Torpe.
Announcing the search for a buyer at the start of this month, Mr Muncaster said: “As London continues to bounce back from the pandemic, the time has come to think about the next chapter of City AM’s story.
“As a local paper at the heart of the financial universe, the brand is perfectly positioned to expand into new areas and develop new revenue streams that take advantage of the new media landscape.”
The hunt for a buyer was initially led by FRP Advisory, another specialist restructuring firm.
City AM says its website has up to two million monthly unique visitors, while its latest circulation figure is only 10,000 lower than pre-pandemic figures.
Edited by Andy Silvester – a former public relations executive at The Sun who joined in September 2019 – the newspaper added a four-letter anacronym to Britain’s business jargon, in reference to workers who turned up in the office only on Tuesdays, Wednesdays and Thursdays.
As a consequence of those changing commuter habits, City AM ceased publishing its Friday edition in January, resulting in it becoming a four-days-a-week title.
The newspaper employs just over 40 people across its editorial and commercial operations.
Douglas McCabe, a media analyst at Enders, was quoted earlier this month as saying: “If a buyer was going to put in money it’s because they believe they can do something with it as a digital brand.
“Free print media is tough.
“The pandemic has removed commuting in scale across the City across the five days but Brexit has also affected the paper’s corporate advertising.”
Mr Silvester and a BDO spokesman declined to comment.
City AM’s appointment of insolvency practitioners will come as The Daily Telegraph, its Sunday sister and The Spectator prepare to be put up for sale by receivers who were called in by Lloyds Banking Group last month.
Lloyds lost patience with the Telegraph’s former owners, the Barclay family, over a £1bn loan which has yet to be repaid.
Last week, Mike McTighe, a boardroom veteran who chairs Openreach, was named chairman of the Telegraph and Spectator’s respective parent companies.
Bankers will be hired imminently to conduct an auction of the titles.
Note: Mark Kleinman is a paid columnist for the City AM newspaper.