Guardian Media Group, which publishes The Guardian and Observer newspapers, will this week reveal one of the highest annual losses for a UK media company in recent years — more than 170 million pounds or around US$300 million as it battles high costs, falling investment values and weaker-than-expected ad revenues.
A well-informed story in the Financial Times revealed the loss of 173 million pounds, including an operating loss of nearly 69 million pounds, or well over A$122 million. The higher figure includes a loss of about 80 million pounds (more than A$140 million) in the value of its stake in Ascential, a listed magazine and events company formerly known as Emap). On top of that is a 20 million pound (A$32 million) restructuring charge over severance payments for 270 jobs shed in a cost-cutting exercise forced on the company by the rotten result for the year to March 31. Guardian management said earlier in the year that it would also close 60 unfilled vacancies across the company.
Of interest to other media groups and analysts will be the size of the GMG cash pool left over from selling a string of assets. Its rapid fall in 2015-16 because of factors such as the fall in ad revenues and markets (which cut returns on that cash pool) triggered a sense of panic earlier this year at the paper remains palpable today.
The Guardian’s coverage of a key area of interest, the media, is being cut in half, with the two pages in Monday editions halved to one, starting immediately. The explanation: cost cutting, As part of that, columnist Roy Greenslade will continue writing, but it is expected he will no longer have the freedom to self-publish his blog directly on the website as he has previously done on a daily basis.
The worsening financial position of the company is widely thought to be why former editor Alan Rusbridger decided not to go ahead with his previously announced decision to become chairman of the Scott Trust, which controls GMG and the papers. He resigned from the trust as it became clear there was growing internal opposition to his move because he and former CEO Andrew Miller were being blamed (mostly by journalists on the two papers) for the group’s financial problems.