Mecom: Montgomery out, Thillieux in
David Montgomery, CEO of Mecom, will go on ‘planned retirement’ in January 2011. In fact, he is kicked out by discontent shareholders, who demand even firmer cost cuts from new CEO Patrick Tillieux.
Three major shareholders, Aviva, Invesco and Legal & General, together owning more than half of the shares, were behind the move. In May of this year a similar attempt to fire Montgomery failed.
In Denmark, Mecom owns free newspaper Urban, one of the three titles competing in the country. In the Netherlands, Mecom-controlled Wegener distributes, prints and handles sales for free daily De Pers while it is also in involved in distributing free daily Spits.
Montgomery planned to build a pan-European newspaper company, but after acquiring publishers in Germany, Norway, Denmark and the Netherlands, the operation came to a halt. An acquisition in France failed; while some assets (most important in Germany) were sold, to pay off the huge debts of the company that piled up during the recession.
Although most papers involved were not too happy with Montgomery, called an ‘arch-costcutter’ by City AM, the new boss will probably be even worse. Share prices have already risen after the announcement.
Mecom-newspapers never profited form being part of Montgomery’s empire; they were just sucked dry to pay off debts. Mecom was never a publishing house, it was a hedge fund in disguise.
Papers involved will see more cost-cuts in the future. In Denmark, the Berlingkse group said that the change at the top will not alter the company’s strategy, but that is in fact very doubtful.
The big question is actually why the former owners of Berliner Verlag, Telegraaf, Orkla and Wegener were so happy to hand over their papers to Montgomery and why there was so little protest at that time from politicians, trade unions, scholars and media journalists (except in France).
In an excellent piece in The Guardian, Roy Greenslade covered Montgomery’s past and present misadventures. How he ever could be regarded as a trustworthy party is really a mystery. My only explanation would be that most of his failures took place before the advance of the Internet, so these were not online.
After being sacked as CEO of the UK Mirror group, Montgomery probably wanted to get back to the UK market and show his enemies how wrong they were. Mecom was his vehicle to get there, but it stranded before it was even halfway, leaving lots of casualties on the way (and with more to come).