Media Headliner: Media divided over Lebedev's plans for The Indy

Rumours abound about what Alexander Lebedev might do with The Independent. Not everyone is upbeat.

The online service Answers.com is now lamentably out of date - and it has to be hoped that it acts urgently to make good. Ask it the question "what can you buy for a pound?" and it will reply that "it might get you a daily newspaper but not on a Sunday".

This was more or less accurate back in January 2009, when Alexander Lebedev, the former KGB operative, acquired a 75 per cent controlling interest in the London Evening Standard for £1.

But that was before the meltdown of 2009 forced us all to recalibrate - now Lebedev is poised to snap up not just The Independent but also The Independent on Sunday for a similar sum.

Now the fun can begin. In an era in which the media industry is seemingly run, increasingly, by grey and faceless technocrats, Lebedev is almost too colourful. So much so that there's an air of unreality (not to say circus) surrounding everything he does.

He joined the Soviet intelligence services as an economics graduate in the early 80s and was posted to the Soviet embassy, overlooking Kensington Gardens. He was largely an academic researcher into rather dry aspects of the UK economy, gathering much of his information by the fiendishly clever method of clipping the Financial Times every morning - although he claims in interviews that, while still under 30, he was propelled to the rank of lieutenant colonel.

Having left the intelligence services in 1992, he took his FT clippings and pitched headlong into business life, using his establishment connections (his father, bizarrely, was most renowned as a member of the Soviet water polo team, but he was also a well-placed Soviet apparatchik) to build his company, the Russian Investment-Finance Company, into a real force to be reckoned with, not least through its acquisition of the National Reserve Bank.

Contrary to what you might expect from this rather grand title, NRB was actually a small and slightly shaky institution - but, unlike its more illustrious rivals, it managed to survive the Russian financial crisis of 1998 and emerged as a major player.

It is (or has been) a prominent investor in the likes of Aeroflot, Ilyushin, the revered aerospace combine, and the energy company, Gazprom. Along the way, Lebedev became a member of the duma - a bit like being a Member of Parliament, but without the proud British traditions of rampant graft and low dishonesty.

He is well connected in the sphere of global politics (the former Soviet leader Mikhail Gorbachev is a close associate, Tony Blair is a friend); and thanks to his philanthropic works (he's a dollar billionaire several times over), liberal ideals and easy charm, he can namedrop effortlessly when it comes to celebrities too. Guests at his charity events, for instance, have included the likes of Hugh Grant, Madonna, Elton John and J K Rowling.

All good stuff - but this sort of colour has rather obscured any prolonged analysis about what he proposes for the Independent titles once the deal is finalised. Or indeed what the advertising industry can hope for. Their owner, Independent News & Media, has struggled grimly to make sense of these largely loss-making assets, which were kept on (some suspected) merely in a vainglorious effort by IN&M to prove it was an international top-table media owner. It has contrived to allow the daily's fully paid-for circulation to fall to 85,889 in the most recent Audit Bureau of Circulations figures.

Surely the fear now, though, is that The Independent becomes an even more flimsy sort of vanity project. Some observers were alarmed, for instance, at speculation that the editorship of the daily under Lebedev was about to be offered to the former Today programme editor and serial rabblerouser (not least through his columns in The Sunday Times and The Spectator) Rod Liddle.

Liddle is now supposedly out of the running but last week reports suggested that "star" names on Lebedev's wishlist for the editor's job include the former BBC director-general Greg Dyke and the Newsnight host Jeremy Paxman.

On the strategic front, there has been speculation that Lebedev might drop The Independent's coverprice and is minded to rein back on the Sunday product.

On the other hand, there have been rumours that he will authorise a substantial investment in The Independent on Sunday, confident that The Observer, despite the no-surrender stance implicit in its recent downsizing and relaunch, would give up an unequal struggle.

Dominic Williams, the press director at Carat, favours the former option. He explains: "There are too many Sunday products anyway, so the new owners should consider focusing on the Monday-to-Saturday product, merging the Sunday into a Saturday to produce a weekend package."

Few in the advertising market believe that Lebedev could create a joint sell across the Independent titles and the Standard. But many think he can improve The Independent's fortunes by at least raising its profile. Rob Lynam, the head of press at Mediaedge:cia, says: "I think he could promote it more successfully and maybe give it a push by cutting its coverprice."

But others remain sceptical about its prospects. Marc Mendoza, the MPG chief executive, has previously expressed trenchant views about the commercial viability (or otherwise) of The Independent. Has the arrival of Lebedev prompted him to amend his views? No, he responds, it hasn't.

Mendoza points out that, on its current circulation, it just doesn't have critical mass in the marketplace - and if Lebedev decided to turn it into a free newspaper (as, after all, he has done with the Standard), he'd have to sell an extra 140 pages of advertising a week to make up for the loss of coverprice revenues.

He adds: "Whichever way you do the sums, they just don't add up. Perhaps he wants to be a newspaper proprietor in the same way that some people want to own boats or cars. Either way, and I realise this is a terrible thing to say ... from our point of view, it doesn't really matter. The Independent just doesn't matter any more. That's the sad truth."

INDEPENDENT TIMELINE

From its 80s heyday, to the courting of Alexander Lebedev; the ups and downs of the quality newspaper

October 1986: Believing there to be a gap in the market for an objective broadsheet, three former Telegraph journalists - Andreas Whittam Smith, Stephen Glover and Matthew Symonds - launch The Independent. It quickly builds a circulation of more than 400,000.

January 1990: However, there had been disagreement among the founders about the wisdom of launching a Sunday title too. The worry was that a Sunday paper would not only prove a distraction but also a drain on resources. But in the end, they decide to proceed with The Independent on Sunday and its first issue appears on 28 January.

March 1998: Their worries were not unfounded. In order to shore up the company's finances, Mirror Group Newspapers and Tony O'Reilly's Independent News & Media had been courted as investors back in 1994 - and in 1998, following several rounds of refinancing, O'Reilly moved to acquire the whole company. But circulation continued to slide, The Independent's falling below 250,000.

September 2003: Under the new editor, Simon Kelner, The Independent experiments with producing the paper in tabloid format in commuter areas. The experiment is such a success that it soon goes entirely tabloid - and its circulation rallies.

March 2010: But the second half of the decade sees both the daily and Sunday titles in decline once more (The Independent's paid-for sale had fallen below 100,000) - and with profitability remaining elusive, there's shareholder pressure at IN&M to sell the titles. As the recession worsens, step forward Alexander Lebedev.

Fast forward ...

November 2013: Many observers had suspected Lebedev to be no more than a vanity publisher - but he proves a model owner, refraining from interference while meeting debts and bankrolling progressive investment. So, when Guardian News & Media admits it now needs rescuing, there's only muted protests when Lebedev is advanced as a likely saviour.

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