The Nyhedsavisen aftermath

The closure of free daily Nyhedsavisen in Denmark (see previous post) is far from being a finished business. Owner Morten Lund recently accused Mecom CEO David Montgomery (right) of having a hand in the shutting down of the free quality paper.

According to Nyhedsavisen’s editor in chief Simon Andersen, Montgomery offered DKr 200 million (€27m) to Morten Lund to shut down Nyhedsavisen. Business.dk – the financial website of Berlingske – also reported that the news was confirmed by Nyhedsavisen director Morten Nissen.

David Montgomery called the accusation “total rubbish”. Mecom could not afford such secret dealings according to the CEO: “we only do legal things”.

In a full interview in business.dk Montgomery again denied the accusations. Business.dk has seen an (unsigned) document where Mecom promised to pay Comet Media Limited, a company associated with Morten Lund, £15m (Dkr 140 million, €19m) for a consultancy report on digital media, the deal is only effective if Nyhedsavisen closes. Business.dk argues that the money could not be transferred to Lund directly, so it could stay outside the Nyhedsavisen debts.

Montgomery denies this Comet Media deal, but actually not all deals, in the interview:

Mecom will never enter into an agreement in which we pay to close Nyhedsavisen. We have never negotiated to pay to close Nyhedsavisen. We were obviously ready to consider different ways to work with Morten Lund and his company. But it should have given industrial sense. It should have been to both parties’ advantage. We would never pay money to close Nyhedsavisen. It is not something that we have ever been ready to do.”

“We discussed quite simply if we could cooperate in media. And both parties understood that the existing free paper market would not be sustainable for all the titles that existed. We agreed and we looked for solutions that would improve the sector and in which we could work together. We did not come to an agreement. The document is not something we have created.” (Google translation)

Mecom owns paid papers Berlingske Tidende and B.T in Denmark as well as the free daily Urban. Shutting down Nyhedsavisen would mean less competition for Urban, and as a result less pressure on advertising rates.

Morten Lund himself explained the Nyhedsavisen drama on his blog:

First of all I’m really really sorry to say that my Newspaper project did not survive – not sorry for me (I take all responsibilities) – I just hate myself for bringing other people (employees and partners) and service providers into trouble – it feels unfair and coward-like… The recession and my stupid communications over summer (we delivered the yearly report 2 months too late) killed us. The simple explanation is that sales did not meet budgets and therefore since Thursday I have been talking to the people backing me and to myself (I have personally put DKK 105 million into this project – money that I have been borrowing – VERY BAD CHOICE) – and over that weekend I had to make a hard decision.

DKK 75 million was suddenly not enough – since the price to break- even suddenly doubled – and after working 9 months 24/7 (having learned more then the previous 10 years) with an increasingly dried up (dead) financial market – I simply could not see a way to continue…

Lower sales, recession, his own inexperience, fierce competition and his own ego killed the paper in the end according to Lund, who, however, also points to a possible joint venture with another publisher. He claims he had 15 to 20 conversations with Montgomery:

This Irishman with 35 years in the industry has been playing me like a piano – always suggesting collaboration – potentially buying – but always just cool and impossible to get a firm agreement with.

Lund ends in style: “I’ll be back” (read the whole stuff)

The Nyhedsavsien saga even got uglier when Simon Andersen posted an online message that directors Morten Nissen and Sven Damm both were guaranteed one year salary after a possible closure. Andersen, however, deleted the posting later. (MediaWatch)

Update Sunday September 14, 22:00: The ‘Comet-contract’ was made by Lund’s lawyers, to get some money back. (MediaWatch)

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