The Guardian newspaper is a pillar of the British liberal establishment and a worldwide force after its role in exposing phone hacking at Rupert Murdoch’s British newspapers and hosting Edward Snowden’s revelations of industrial-scale US government cyber-snooping.
Unfortunately it’s not a very successful business despite its highly-regarded and popular website, losing £30m last year (down from £40m or so the year before).
But it’s been kept afloat by its stake in used car magazine and website Auto Trader (owned by Trader Media) which is valued at a rather staggering £1.75bn including debt. Now it’s agreed to sell its stake to its Trader Media partner buyout group Apax in a deal that should increase its coffers by a chunky £600m. This follows the sale of its radio business for about £250m.
So, all of a sudden, Guardian Media Group (which now is just the Guardian) is awash with cash. Even if it continues to lose money at the current rate this should keep it going for 20 years or so, although that’s obviously not the plan.
So far the company, headed by CEO Andrew Miller although long-serving Guardian editor Alan Rusbridger remains the power behind the throne, has set its face against going the paywall route on its website, unlike UK rivals News International (with The Times and Sunday Times) and the Telegraph papers. But Guardian Online should still be able to make money with more than 20m visitors a month.
The issues to be sorted by Miller and co. are the newspapers (the daily Guardian and the Observer on Sunday) which have never made money and staffing levels. It’s likely that a biggish chunk of the new money will go on generous redundancy terms.