The London freesheet is on the verge of engaging administrators due to its inability to secure a buyer.
City AM, a leading London freesheet, is on the verge of entering administration following unsuccessful attempts to secure a buyer amidst the pandemic aftermath. The publication, severely impacted by repeated lockdowns and the shift to remote working, is readying to involve BDO administrators to initiate insolvency proceedings.
The executives are currently aiming to arrange a pre-pack agreement, which would allow for an immediate sale of some or all of the company’s parts post-administration.
In an internal email, obtained by the Telegraph, editor Andy Silvester mentioned that administration had always been an option, but assured staff that the paper is still in “advanced negotiations” with a prospective buyer.
Silvester wrote: “I acknowledge this might be distressing news, but I want to reassure you that we continue to operate as usual, and are tirelessly working to ensure City AM’s future.”
Earlier this month, the company declared that it had engaged FRP Advisory to facilitate a sale, after failing to secure new investment. This disclosure led to an emotional reaction from readers, including Conservative MP Tracey Crouch, who decried the paper’s challenges as “outrageous”.
Crouch added, “City AM is unrivalled among freesheets. I’m hopeful a buyer will be found swiftly so that it can keep providing its exemplary coverage and insights for many more years.”
City AM was a significant casualty of the pandemic as the number of financial professionals commuting to the Square Mile reduced dramatically. It transitioned to a digital-only model in March 2020 and didn’t print for 18 months.
The business-centric newspaper has found it challenging to recapture its former readership due to the adoption of remote working. It now has a daily readership of approximately 68,000, a decrease of over 10,000 from the numbers it enjoyed before the pandemic.
Adapting to new work patterns, the publication stopped its Friday print editions starting in January. In a move reflective of changing workplace dynamics, the paper coined the acronym “TWATs” in October 2021 to label employees who only commute to the office on Tuesdays, Wednesdays, and Thursdays.
City AM is now primarily focusing on its digital presence, with monthly unique website visits ranging from 1.8 to 2 million.
Despite this, the company found itself grappling with £1.6m debt in 2021, hampered by inadequate funds for investment.
Adding to its challenges, City AM has been impacted by recent strikes in the Tube and train sectors, along with escalating costs for newsprint and distribution.
Ownership of City AM is divided such that a group of Dutch investors hold a 50% stake, while Managing Director Lawson Muncaster and CEO Jens Thorpe each possess a 25% share.
Both City AM and BDO chose not to provide any comments.
