Business newspaper CityAM set to appoint administrators amid falling revenue

Free business newspaper CityAM is on the verge of falling into administration, with talks over a potential rescue deal reported to be ongoing. The paper, which was set up 18 years ago and employs approximately 40 members of staff, is 50 per cent owned by two Dutch private investors, while Managing Director Lawson Muncaster and Chief Executive Jens Torpe own around 25 per cent.

CityAM has a daily run of approximately 70,000 newspapers, as well as a strong online presence. However, the business has been hit by a range of factors, including COVID-19, which has had a significant toll on its readership as commuter numbers have fallen due to increased flexible working.

It has also had to contend with declining advertising revenues and rising print costs. These factors have also been felt by other major names across the industry, including rival papers The Daily Telegraph and The Spectator, which are to be put up for sale by receivers.

Earlier this month, CityAM was reported to be looking for a buyer, with Managing Director Lawson Muncaster saying: “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.”

However, the company now appears set to appoint administrators, with accountancy firm BDO reportedly set to be appointed over the coming days. Talks over a rescue deal for the paper are already underway, however, with online retailer and software group THG reported to be in advanced talks with BDO to acquire CityAM in a pre-pack deal once it enters administration.

Discussing the struggles facing print media in the current environment, Enders media analyst Douglas McCabe said: “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.”

CityAM’s physical paper is distributed from approximately 400 travel and commuter hubs, as well as in around 1,600 London offices. In its accounts for the year to December 31 2021, the company’s fixed assets were valued at £337,989 and current assets at £1.5 million. At the time, the company had £1.6 million in net liabilities.


Update: Manchester-based e-commerce technology company THG has completed a pre-pack deal with CityAM and its administrators BDO to take over the business for an undisclosed figure. THG sells own-brand and third-party luxury goods, dietary supplements and cosmetics online. Certainly on the face of it, the acquisition does not seem to be a very good fit, however the owner of THG, multimillionaire businessman Matthew Moulding, disagrees: “We’ve long been reviewing opportunities in the disruptive media space but have waited for the right time and the right opportunity to make a digital step-change in adtech capabilities for [the firm]." Apparently, City AM’s 40 editorial and commercial staff will be brought across to join the THG Group. However City AM co-founder and CEO Jens Torpe will retire from the business.

Read about how advertising is driving M&A activity in online content businesses.

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