• Forbes, Thursday, August 20, 2009 10:54 PM

Rupert Murdoch's News International is shutting down its free evening newspaper, the London Paper, after it posted an almost $21.4 million pretax loss for the year. Produced by a staff of 60, the paper is given out on the streets of London and covers the city's news, sports and celebrities.

Earlier this month, Murdoch said quality journalism doesn't come cheap, and that he intends to charge for all his Web sites -- which include those of Britain's The Times, Sunday Times, The Sun.

"By closing the London Paper Murdoch seems to be [underlining] the message that content produced in his newsrooms has value. Also, there is the sensible business decision to close an operation with steep losses," says Douglas McCabe, media analyst with Enders Media in London. McCabe doesn't find the closure of the London Paper particularly surprising, since free sheets have been posting hefty losses all across Europe. "With a few exceptions, there is very little evidence that the free-paper model actually works at all," he says.

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