Any takers for The Express?

NOW THAT the high-stakes poker game surrounding the future ownership structure of ITV has seen Granada Media and Carlton Communications emerge with the strongest hands, speculation about the future of Express Newspapers, part of Lord Hollick's United News & Media, is reverberating throughout Fleet Street.

NOW THAT the high-stakes poker game surrounding the future ownership structure of ITV has seen Granada Media and Carlton Communications emerge with the strongest hands, speculation about the future of Express Newspapers, part of Lord Hollick's United News & Media, is reverberating throughout Fleet Street.

The list of potential buyers ranges from big publishing groups such as Gannet, the publisher of USA Today, to Trinity Mirror, the regional and national newspaper publisher. There is also the inevitable parade of egos who might relish the status and power of media moguldom, such as the Barclay brothers, owners of the Andrew Neil-managed Scotsman and Sunday Business, are currently thought to be out of the frame. Meanwhile, mischief-makers continue to talk up the possibility that Mr Mohamed Al Fayed or Sir Richard Branson may step into the breech.

All of this must be rather galling for Lord Hollick, the Labour peer, who has somewhat disingenuously insisted that Express Newspapers is not for sale. For what it's worth, and that may not be much now that his grip over United News shows signs of slipping, advisers say the titles' sale is hypothetical, in the words of one insider, due to "the extreme paucity of credible buyers".

How the Express came to this unfortunate juncture is one of the most well-documented stories in the history of Fleet Street. Founded in 1900, The Daily Express came under the hand of the future Lord Beaverbrook in 1916. Circulation rose from under 300,000 during the First World War, to its peak in the 1950s of around 5 million. Since then, the decline has been long, slow and, in recent years, increasingly painful.

Lord Hollick came to preside over the newspapers when his MAI financial services to the ITV conglomerate merged with Lord Stevens' United News in 1996. Reflecting the fashion of the time, Lord Hollick flogged off the group's regional newspaper interests for £450m. That's now considered a major strategic blunder as regional newspaper brands have gained renewed life - and profits - from their ability to deliver local readers to internet e-commerce sites. Ironically, United's former titles, which include The Yorkshire Post, are now up for sale for a reported £650m.

But what of the business prospects for the Express Group? Annual revenues, including those of the Daily Star, are estimated to total around £275m annually. Operating profits last year were estimated at around £8m, although the figure is likely to have shrunk this year. In April and May, The Daily Express instigated a round of cover-price cuts, while promoting aggressively. Advertising revenues are thought to be growing on the back of the economy's continued strong run, but circulation, if no longer in free fall, is still shrinking.

If that endures, it would mark a turn around of sorts for editor Rosie Boycott. In the January to June period, average daily sales were down 2.8 per cent to 1.065 million. In the same period, the Daily Mail showed little sign of losing momentum as sales rose 1.1 per cent to an average 2.38 million.

A City media analyst, currently advising one of the media groups circling United, believes the titles could have a future under the right ownership. "The rate of decline has certainly slowed. It's gone from being a fairly precipitous decline to a modest decline. There are signs of stability coming through, but not quite growth."

It is undeniable, however, that the current uncertainty surrounding United's future raises question marks about the future of The Daily Express. Should Lord Hollick fail to secure an amicable sale of his ITV franchises - Anglia, HTV in Wales and Meridian along the south and south-east coasts - Granada Media could make a hostile bid. That could see the Express and United's other trade publishing interests put up for auction, or hived off and refloated on the stock market.

But few media groups seem prepared to invest any great sum reversing the decades-long decline. One rival newspaper executive notes: "To take on the Express would be brave indeed." Moreover, the remake into New-Labour friendly mid-market tabloids, while brave, had just begun to gather momentum when the government's fortunes nose-dived.

In the final analysis, Lord Hollick is, first and foremost, a businessman. If The Daily Express can be sold for the right sum, an amount thought to be upwards of £200m, a deal will almost certainly be done. Yet that might only represent half of what it would take to give it a fighting chance in the years ahead.