Guardian Media Group’s new management of CEO David Pemsel and editor Katharine Viner (below) have clearly looked into the newspaper and website’s bottomless pit of heavy losses and are beginning to do something about it. The question is: have they left it too late?
According to the FT GMG will reveal an operating full year loss of £69m this week with a staggering total pre-tax loss of £173m as it belatedly writes down £80m in the value of its stake in Cannes Lions organiser Ascential and takes a £20m restructuring charge over severance payments. Pemsel and Viner have cut more than 250 jobs including 70 voluntary redundancies among the journalists.
But, says the FT, it needs to reduce such losses to no more than £30m annually to survive on the £750m cash it has left from selling its stake in Auto Trader. If the only way to do this is make more job cuts then that £750m won’t last too long.
The newspaper’s dire position has been worsened by the continuing flight from print advertising, accelerated it seems by Brexit uncertainty. ITV is expected to report a Brexit-induced slowdown in advertising when it reports its figures this week.
Pemsel and Miller took over from long-serving editor Alan Rusbridger and CEO Andrew Miller who embarked on a crazy policy of global expansion even as the group burned through its cash pile. Guardian Online now has 167m monthly unique users but, like most of its online peers, has failed to generate an equally impressive amount of advertising. Google and Facebook, who provide no expensive content of their own but simply distribute other people’s, are hoovering up an ever-growing share of the online ad market.
The Guardian is owned by the Scott Trust whose only stated purpose is to keep the newspaper – not the website – in being. If the newspaper is not to go the way of the Independent its structure and pricing needs some radical surgery from Pemsel and Viner too. Sister paper the Observer, which publishes on Sunday, must surely be up for sale while the Guardian needs to find a way to publish at a far lower price if it’s to appeal to a new generation of time-poor readers who get most of their information free.