Metro sells 3 US papers to ex-CEO in $2m deal

Metro International publishes 81 editions in 22 countries

Metro Boston, a free newspaper distributed primarily at subway stops, is getting a new owner.

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Metro International is selling its stake in the Boston tabloid and two sister papers, in New York and Philadelphia, for $2 million to Seabay Media, both companies said yesterday. The three papers, which are aimed at commuters in their 20s and 30s, have a combined daily distribution of 590,000.

Metro Boston, which has a daily distribution of 165,000 copies and an estimated readership of 300,000 people, is published through a partnership with The Boston Globe. The New York Times Co., which owns the Globe, bought a 49 percent stake in Metro Boston in 2005 for $16.5 million.

Officials at Metro Boston did not return calls seeking comment. The Globe declined to comment.

Just a few years ago free newspapers were all the rage, hailed as the future of print journalism because they were low cost and aimed at young readers used to getting content online for free. But their distribution and advertising revenue have shrunk, just as traditional newspapers have lost circulation and advertising.

Metro International, which publishes 81 editions in 22 countries, said the three US Metro newspapers have been hit particularly hard by the recession and concurrent advertising slump because the free tabloids do not offer subscriptions. Revenue for the papers plummeted about 42 percent to $7 million last year.

The US Metro tabloids have been losing money for nine years, said Per Mikael Jensen, president and chief executive of Metro International. "What we want to do is concentrate on fewer markets than what we've done so far. . . . Our global strategy is to focus on some of the European markets."

In a written statement, Pelle Tornberg, founder of Seabay Media and former Metro International chief executive, said he "recognizes the challenges ahead" for the newspapers, but is optimistic.

Under the agreement, Seabay Media will continue to publish the US papers under the Metro brand name, logo, format, and content, and Metro International will continue to sell advertising for the papers.

The sale is expected to be completed by June 1.

"We are excited and look forward to continuing the business after completion and to further develop Metro in the United States," Tornberg said. "We will give Metro our full attention."

Christopher Daly, a Boston University professor who teaches the history of journalism, said the sale seems to be part of a "bigger trend and that is the struggle to find new models that will pay for original reporting."

"That's the real problem, " said Daly who is writing a book on the struggles of newspapers to remain financially viable.