France's newspaper industry sank deeper into crisis this week after two of its top dailies stepped up rescue talks with investors, leaving observers sceptical about the likelihood of an imminent recovery. Even though the French take great pride in the writings of their intellectuals, few people read newspapers compared to other European nations, and the numbers are declining further.
Dwindling advertising revenues and competition from free publications have compounded problems caused by the byzantine distribution system and powerful unions, leading to deficits, layoffs, and a hunt for fresh investors.
Lagardere, France's second-largest media group, said on Friday it was in talks with the highbrow daily Le Monde about setting up a partnership in advertising and potentially taking a stake through an equity exchange. However, Lagardere said it did not wish to invest directly in the newspaper.
On Monday, Le Monde parted ways with its long-standing editor amid speculation about an internal row as it intensified its search for an investor willing to plug a deficit of at least 50 million euros ($66.7 million), one insider said.
No one at Le Monde was available for comment on Friday.
Meanwhile, Liberation, an icon of the French left which also lost money last year, said this week it entered exclusive talks for two months with the blue-blooded former banker Edouard de Rothschild about a 20 million euro cash injection.
Rothschild will take a stake in Liberation of between 34 and 49 percent between now and 2010, "depending on the company's profitability and the success of its developments", editor Serge July wrote in the paper on Friday.
"The French journalistic left is discovering the virtues of capitalism in difficult circumstances," a journalist at Le Figaro, who did not wish to be named, said on Friday.
"The crisis which has hit the French press is very serious," said a journalist at Le Monde who did not wish to be identified. "And it is difficult to see how we will get out of it."
According to the French Society of Newsprint Manufacturers, France has fallen to 31st place in the world rankings for the number of newspapers distributed per 1,000 inhabitants.
France's top selling daily, the regional Ouest-France, sells about 780,000 copies a day, while Le Monde sells about 400,000 copies, Le Figaro 350,000, and Liberation fewer than 200,000.
By comparison, Britain's top-selling Sun tabloid sells about 3.4 million, The Times (of London) about 650,000 copies a day, and the Daily Telegraph, the UK's best-selling broadsheet sells about 900,000. Italy's La Repubblica sells about 619,000 daily.
France's papers also face high fixed costs, partly because the country's distribution network and printers are controlled by powerful unions who refuse to bring prices down.
But France's industrial barons still have an undiminished appetite for ownership of the nation's unprofitable papers.
They include Bernard Arnault, head of the world's biggest luxury goods maker LVMH, who has invested in the money-losing French business daily La Tribune.
Serge Dassault, billionaire defence magnate and now senator, acquired the conservative Le Figaro and stamped his authority by sacking its editor at the end of September.
But if they are to receive any returns on their investment beyond prestige and influence, analysts say they will have to wait for the medium term, and hope the advertising market remains firmly on the path of recovery.