Le Monde rescue bid embroiled in politics

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To French people, Le Monde is an institution, similar to the BBC and the New York Times rolled into one: venerable, fair, fearless and independent.

Many are watching in concern as the country's most prestigious newspaper is up for grabs, with President Nicolas Sarkozy himself seen in the driving seat.

Launched in 1944 after France's liberation from the Nazis, the centrist afternoon daily has a treasure chest of scoops, from political skullduggery and corruption scandals to the botched bombing of the Rainbow Warrior, to add to its famously weighty features and commentaries.

Almost unique in the world's major media, it is controlled by its journalists, who hold a majority stake through a complex shareholding giving them veto over the choice of editor and editorial policy.

But, as its counterparts in other countries might wistfully agree, to have a fine history is one thing but a healthy balance sheet is another.

With daily sales last year of 288,000 copies, representing a fall of 4.2 per cent over 2008, struggling with declining ad sales, saddled with €94 million ($166 million) in debt and lacking a sugar daddy to pay the bills, Le Monde is sick - maybe terminally so.

Money to pay salaries runs out in July, prompting journalists to reluctantly agree to surrender their cherished autonomy in exchange for recapitalisation.

But politics, too, has intervened, and this already sad affair is turning into something deeply ugly.

According to the news magazine Le Point, Sarkozy last week phoned and then called in the director of Le Monde, Eric Fottorino, bluntly warning him against a bid by a trio of maverick businessmen who are either critics of the President or close to the opposition Socialist Party.

The three are Matthieu Pigasse, a banker who has branched out into media by the purchase of a music magazine called Les Inrockuptibles; Pierre Berge, the partner of the late fashion designer Yves Saint-Laurent; and Xavier Niel, who made €2 billion in telecoms and already has stakes in two anti-Sarkozy websites, Mediapart and Bakchich.

"If the Pigasse-Niel-Berge bid goes through, Le Monde cannot count on public help," Le Point quoted Sarkozy as saying.

Funding of around €45 million has been earmarked via a state bank, the Caisse des Depots et Consignations (CDC) to help Le Monde restructure its strike-riddled printworks under a media subsidy programme that last year totalled around €600 million.

Sarkozy objected to Pigasse because he is close to Dominique Strauss-Kahn, a Socialist heavyweight who now heads the International Monetary Fund (IMF), according to the report. Strauss-Kahn would be Sarkozy's biggest threat if he were to return from Washington to contest the 2012 French presidential elections.

Sarkozy also hit at Niel, describing him as a "peep-show man" in reference to his rise as a purveyor of soft pornography on the Minitel, a forerunner to the internet in the 1980s, the report said.

Denied or confirmed but downplayed by Sarkozy's lieutenants, the conversation has unleashed a firestorm, with critics likening the President to Italian Prime Minister Silvio Berlusconi, who has a steely grip on his country's media.

The President's friends own Le Figaro, the country's top selling national daily, as well as Les Echos financial daily, the top-circulation Sunday newspaper Le Journal du Dimanche and TF1, the most-watched TV channel.

A Sarkozy chum, Arnaud Lagardere, has owned 17 per cent of Le Monde since 2005 and a 34 per cent stake in Le Monde's successful website, Le Monde interactif. In addition, Sarkozy has recently changed the law to enable him to name the head of public TV, France Televisions.

"Sarkozy is worse than Berlusconi," said Socialist MP Benoit Hamon. Fellow legislator Julien Dray said, "It's intolerable political interference ... This is something we haven't seen for a very long time."

The Communist Party accused Sarkozy of "Berlusconisation of the media."

The other main bid so far lined up is headed by Claude Perdriel, who controls the Nouvel Observateur news magazine. He is looking for an industrial partner, rumoured to be the telecoms giant Orange, in which the state has a 34 per cent stake.

According to sources at the paper, it would cost between €80 million and €120 million to gain a stake of 51 to 65 per cent of Le Monde's capital. The group's supervisory board will meet on June 28 to decide the winning bid. But in any case, a new and difficult chapter seems set to begin.

"Even if Le Monde is saved financially, it will be the end of an era," the German weekly Der Spiegel commented.

HARD TIMES FOR FAMOUS PAPER

288,000 daily sales

4.2 per cent decline from 2008-2009

€94 million in debt

€45 million funding to restructure