Auto Trader provides £50m lifeline for the Guardian

A week ago we asked where the money was coming from to help the loss-making Guardian newspaper and online group survive the next few years as it tries to find a workable print model and finally earn some profits from its successful (in reader numbers anyway) Guardian Online website.

And the answer is: Auto Trader, the car classified business it bought into a decade ago, has borrowed £150m it probably doesn’t need, £50m of which will go to the Guardian with the remainder split between Auto Trader itself and co-owner with the Guardian, Apax Partners.

Auto Trader, founded by Reading FC owner John Madejski, has been the Guardian’s lifeline for years now, its other investments – in business to business publisher Emap and various radio stations – turning out to be less successful.

The challenge now for the Guardian’s management headed by CEO Andrew Miller and editor in chief Alan Rusbridger is to produce a plan that tackles Guardian Media Group’s problems at source (it also owns the perenially loss-making Sunday paper the Observer).

So far the company has announced £25m of cuts to its print operations (which allegedly leaves the Observer with just five reporters) and a ‘digital first’ strategy based on keeping its high-scoring website free.

It can’t keep dipping into the Auto Trader pot for ever.

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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.