Iconic Labs PLC (LON:ICON) has signed a new management contract with digital newspaper TheLondonEconomic (TLE).
Under the new deal, the AIM-listed media and tech firm will manage all commercial aspects of the TLE brand and also assist the newspaper’s team in their general day to day management of the business.
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In return, Iconic will receive a monthly retainer fee and will also be entitled to an amount equal to 25% of TLE’s profits.
The contract is for an initial period of one year and will renew automatically every 12 months until terminated by both parties.
“TLE is an ideal vehicle for the team, and the perfect strategic fit for Iconic Labs. TLE brings great revenue opportunities itself, but is also exactly the sort of brand, and has the audience, that the wider Iconic Labs will benefit from”, Iconic Labs chief executive John Quinlan said in a statement.
“Importantly, the agreement enables Iconic Labs to share in the upside through our entitlement to an amount equal to 25% of the profits of TLE, while risking no capital and ensuring through the monthly management fee that our costs and time are always covered … The restrictions on TLE's ability to terminate the agreement also ensures that if TLE is sold, then because the agreement continues in place Iconic Labs can continue to enjoy the same economic terms after the sale as before”, he added.
Quinlan also said that if the agreement proved as advantageous to the firm as anticipated, it may look to “replicate the model elsewhere”.
Shares in Iconic Labs jumped 16.9% to 0.04p in late-morning trading on Tuesday.