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The Guardian heads for the iceberg in Titanic mode

The version of cloud cuckoo land inhabited by the Guardian has become apparent as it has announced it expects to report operating losses of between £50m and £52m in the year ending March. Consequently it’s out to save £54m over the next three years although it’s just awarded union staff a two per cent pay rise and £1000 for working weekends.

Hmm. But the real clincher is that, after cutting staff numbers by 30 per cent two years ago – cutting its costs by £10m a year – it then hired 479 new staff across editorial and commercial departments to try to grow its online business, in particular new ventures in the US and Australia. Given that it was making hardly any money from its popular UK online operation, which was read quite happily by people in America and Australia as things were, this looks absolutely bonkers.


The strategy, if it can be so defined, was led by departed CEO Andrew Miller and editor Alan Rusbridger, shortly to become the new chairman of Guardian owner the Scott Trust. Miller was paid well north of £500,000 while Rusbridger took a pay cut to £395,000.

Rusbridger was a great editor in many ways, leading the fight against phone hacking at the News of the World among other campaigns. But this expansionary optimism was disastrous. Whenever you read the Guardian you’d see blocks of recruitment ads for more staff at Guardian Online, most with bewildering and opaque job descriptions. You would notice a declining number of actual paid-for classified ads.

What makes matters infinitely worse is the Guardian’s rapidly reducing cash pile. According to the FT this now stands at £735m, against the fabled £1bn, having reduced by £100m in just the last six months. This is akin to the Titanic deliberately setting course for the nearest iceberg in broad daylight.

The newspaper advertising market in the UK is tanking at a faster rate than even most doom-mongers anticipated but the Guardian, with its circulation down to just 160,000 thanks to ridiculously high cover pricing, was always likely to cop it harder than its rivals. This might have been foreseen.

Nobody foresaw the effect of ad blockers on online ad sales but, even without these, Guardian Online was never likely to generate the revenues its cost base required.

So what’s the cunning plan of new CEO David Pemsel and editor Katharine Viner? Apparently it’s to try to double reader revenues from their current level of £30m, in part from its membership scheme where readers pay between £5 and £60 per month for some rather ill-defined benefits. Or just to support the Guardian. It’s also going to try to increase ‘native’ ad revenues (sponsored editorial). Sorry guys, this won’t work either.

Is a paywall the answer? It’s Rupert Murdoch’s strategy at The Times and Sunday Times, chiefly aimed at persuading on and offline readers to buy both versions as a package. But most Guardian Online readers (unlike their Times equivalents) don’t want the paper. There’s not much in there apart from some windy columnists.

In short there isn’t a future for the Guardian in its present form. The online operation will doubtless continue in some way or other. But the paper looks doomed.

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About Stephen Foster

Stephen is a former editor of Marketing Week and London Evening Standard advertising columnist. He wrote City Republic for Brand Republic and is a partner in communications consultancy The Editorial Partnership.


  1. Is Stephen Foster a staunch conservative?

  2. No – I’d like to see it succeed as much as anyone else. I do think some drastic action is required though. And I think the paper’s boring unless you’re a convinced Guardianista.

  3. Boring? Only if you are a Tory. You’re probably more at home with Murdock rubbish. Wishful thinking I feel, the Guardian will be around for a long time yet.

  4. I hope so too..but I suspect it won’t be as a newspaper, alas. And I can hardly be categorised as a Murdoch fan.

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