The parent company of The Guardian newspaper is in talks to sell its regional titles to a rival publisher in a move that would sever its historic links with Manchester.
Guardian Media Group (GMG) admitted yesterday that in the past few months, senior management have held "exploratory talks regarding our regional media business".
The group is understood to have held talks with Trinity Mirror, which has about 240 regional titles, in a deal that could fetch up to £40m. GMG Regional Media, headed by Mark Dodson, publishes titles across Greater Manchester as well as in Surrey and Berkshire.
Media groups are suffering heavily in the downturn, smashed by the worst advertising recession in living memory. Regional papers were especially affected as classified advertising has been pulled or moved online. Operating profits at GMG's regional arm plunged from £14.3m in the year to 29 March 2008 to just £500,000 the following year as the advertising downturn bit. Over the same period, its classified advertising revenues fell 30 per cent.
The group admitted it had been considering options for the titles since the Government's Digital Britain report was published in June. The report dealt a blow to regional newspaper publishers which had lobbied to relax merger controls on the industry. Publishers had hoped they would be able to trade assets and merge, to protect against the threat from the internet.
A spokesman for GMG said the discussion to offload its regional titles, which include the Manchester Evening News, were "at an early stage and it is not clear whether they will progress". GMG's flagship newspaper was launched as The Manchester Guardian in 1821 before becoming The Guardian in 1959.
The Guardian is protected by the Scott Trust, which was set up in 1936 to secure the financial independence of the newspaper. However, the Trust does not cover The Observer or its regional titles. This comes after GMG reported it had swung to a full-year loss of £90m from a £306m profit a year earlier.
The group is looking to cut costs, following a strategic review in the summer. It emerged last month that The Guardian is axing up to 10 per cent of its editorial staff.
The announcement followed a move to overhaul The Observer the same month, which included shutting down three of its supplements, as part of a plan to slash £2m. This followed rumours, which emerged over the summer, that GMG was considering shutting the paper completely. The company publicly denied the rumours in August.Reuse content