le monde to be bought by france telecom??

Posted on June 17, 2010

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Imagine a world in which a mobile phone carrier and a bathroom pump maker owned a newspaper. Well, keep dreaming…

France Telecom (NYSE: FTE) is teaming with SFA PAR to bid €80 million ($98.8 million) for 65 percent of troubled Le Monde, SFA owner Claude Perdriel tells WSJ.

It would be the end of Le Monde as we know it – the equivalent of AT&T (NYSE: T) owning The New York Times (NYSE: NYT), a potent symbol of the contrasting fortunes in media and technology…

The paper has been majority-owned by its own journalists since being formed on the order of General Charles de Gaulles 1944. But lost €25 million last year and racked up €125 million of debt against sales of €397 million, including a €25 million emergency loan from BNP Paribas that must be repaid next year, so was placed for sale, The Times reported.

Suitors speculated about include Spain’s Prisa, Italy’s L’Espresso, Switzerland’s Ringier and a consortium comprising a Lazard banker, the founder of France’s Iliad telco group and an Yves Saint Laurent’s partner Pierre Berge.

France Telecom, which is, like several French companies, part-owned by the state, is no longer just a telco. Aside from broadband, landline and mobile, it has growing content ambitions, including operating one of most successful IPTV services in what is the IPTV country capital of the world, owning rights to broadcast French top-flight soccer, running Orange Vallee VOD (a kind of French Hulu) and owning a web ads sales house alongside its mobile ad sales operation.

The telco’s CEO is reported to have speculated about tying up Le Monde with Orange’s Actu 24/24 news portal. But there’s no need to lay down money for that – Actu 24/24 is an aggregator that takes feeds from multiple sources, including Le Monde.

Running a newspaper would be a departure from what is a mostly audiovisual-led content odyssey. France Telecom would offer between €20 million and €25 million in the bid next Monday, Perdriel tells WSJ, adding: “By 2011 we can make the paper break even.” That reportedly would include 100 layoffs.

Perdriel’s SFA doesn’t just make bathroom plumbing – he also publishes Le Nouvel Observateur weekly news magazine.

France’s newspaper market is in a worse state than many other countries’ and teters on “the edge of the economic precipice”, president Sarkozy said two years ago: “The problem of the internet is considerable because how do you expect people to buy their papers in a shop if they’re free on the internet?”

He has proposed a series of levies on internet advertising and ISPs to fund traditional media, including giving all 18-year-olds a free newspaper subscription to re-encourage a newspaper-reading habit. France’s newspaper sector has been hampered in its re-invention by old-fashioned distribution chains and by the strong voices wielded by the employees who would be most affected by change.

from paid content.org

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