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Business Comment

Ian Burrell: The return of Rommel as he marches into Britain's local newspaper industry

The Ulsterman seems to have microscopic vision for the merest traces of meat on the tiniest piece of bone

David Montgomery's return to British newspapers yesterday has provoked mixed reactions, as you might expect of someone who is referred to in newsrooms as both "Monty" and "Rommel", often in the same sentence.

Mr Montgomery has a reputation as a ruthless cost-cutter. Like a purveyor of competitively-priced fried chicken, the Ulsterman seems to have microscopic vision for the merest traces of meat on the tiniest pieces of bone. Most other media entrepreneurs thought the British local newspaper industry offered nothing more to feed on – but Monty sees margins that can still be improved.

With his faith in the enduring popularity of print media he would love to be seen as a saviour of the regional press. His Local World's purchase of DMGT's Northcliffe stable and its merger with the Iliffe-owned portfolio creates a powerful new player in a sector that has been starved of investment.

The parlous state of the local press can be seen in the staggering fact that Northcliffe was valued at £1.5bn as recently as six years ago. And now DGMT, which is increasingly focused on its B2B interests, has sold its local papers to Montgomery for £52.5m (retaining a 38.7 per cent stake).

But staff and readers of such titles as the Bristol Post and the Leicester Mercury should not anticipate an injection of new resources. Mr Montgomery's view is that papers can only survive by abandoning their traditional models and employing small teams of highly flexible, multi-skilled workers.

This will not reassure those who worry that local courts and council meetings are no longer being reported on.

Mr Montgomery has a chequered record. In national newspapers (where he acquired the Rommel nickname because "Monty was on our side") he is remembered as a successful tabloid journalist (he edited the News of the World and Today) and a brutal manager.

After founding Mecom Group in 2000, he marched into Germany (a gift to headline writers) to introduce his efficiency savings. Mecom's acquisition of 300 titles from the Netherlands to Poland, was counter to the narrative that print was in decline.

But the recession caused a collapse in advertising. Mecom posted a pre-tax loss of £944m for 2008 and sold its German papers, including the Berliner Zeitung.

Early last year, the shareholders forced Mr Montgomery out. For the sake of local democracy we must hope this phase of his eventful career has a happier ending.