GMG reported to be weighing up future of the Observer

GMG reported to be weighing up future of the ObserverGuardian Media Group says no decisions have been made on the newspaper's future, according to reports


Chris Tryhorn guardian.co.uk, Monday 3 August 2009 11.11 BST Article history
Guardian Media Group is reported to be considering options for the future of its Sunday newspaper, the Observer, as part of a strategic company review.

The company – parent of Guardian News & Media, which also publishes the Guardian and MediaGuardian.co.uk – is said not to have ruled out closing the Observer.

GMG has reportedly floated the idea of turning the Observer, which was founded in 1791, into a weekly news magazine or retaining it as a newspaper in a slimmed-down format.

However, no decisions have been made at this stage and the company is not due to reveal the findings of its strategic review until the autumn.

A GMG spokesman would not confirm or deny whether the Observer's future was being reviewed. "We would not comment on speculation about the future of our papers or the private business of the [Scott] Trust," he said.

Like other newspaper groups, GMG is suffering from the effects of the advertising downturn and a long-term decline in print circulation as readers migrate to the internet.

Last week in its annual results GMG revealed that GNM had made an operating loss of £36.8m in the year ending on 29 March.

GMG, which also runs regional newspapers, radio stations and the Trader Media Group and Emap joint ventures in partnership with the private equity firm Apax, recorded a pre-tax loss of £89.8m.

This loss was attributed largely to GMG's restructuring of its portfolio, particularly the sale of 49.9% of Trader Media Group to Apax Partners, and non-trading losses.

In a bid to reduce losses, GNM has already launched a wide-ranging cost-cutting campaign, seeking to cut £10m from its editorial operation and an equal amount from commercial departments. As part of the cuts the publisher is seeking 50 voluntary redundancies from editorial and shedding 82 commercial jobs.

GNM is now undertaking a three-year review of its operations, with executives due to report back on their findings to staff in the autumn.

Although making substantial changes to the Observer would be a huge step that would almost certainly provoke staff opposition, it would be possible under internal company rules.

The body that owns GMG, the Scott Trust, is mandated "to secure the financial and editorial independence of the Guardian in perpetuity".

But the Observer is not covered by the charter, which was drawn up long before the Sunday title was acquired in 1993.

Despite their different traditions, the Guardian and Observer have become increasingly integrated in recent months.

Staff at the two papers and their websites have been working alongside each other far more extensively since GNM moved to new offices in King's Cross, north London, at the end of last year.

guardian.co.uk