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Tuesday, 15 December 2009

Lesson 3: The Guardian_Case Study_Part 1

Ownership and Profits
We watched a short video on the Scott Trust - on the home page, top right.

We might expect newspapers to disappear following the growth of the internet. As so much information can be found for free, it begs the question: Why would anyone pay for a newspaper nowadays? The Guardian’s most celebrated editor, C. P. Scott, provided one possible answer:

“Comment is free, but facts are sacred… The voice of opponents no less than that of friends has a right to be heard.”

He was writing in 1921, celebrating the centenary of The Guardian and affirming its values as an independent newspaper. Let’s take a closer look at The Guardian. In 2009, it is celebrating 50 years since it changed its name from The Manchester Guardian to become The Guardian, and 10 years since The Guardian Unlimited network of websites was launched. It is the only UK national newspaper wholly owned by a trust, which means that there are no shareholders to satisfy, and profits are reinvested to secure the newspaper’s future.

Does The Guardian make a profit then? In short, no, but it’s more complicated than that. The Scott Trust owns a multimedia business, Guardian Media Group PLC (GMG PLC), whose portfolio includes national, regional and local newspapers, radio stations, magazines, a raft of websites and B2B media.’ Guardian News and Media (which publishes the Observer and Guardian, and produces The Guardian Unlimited website) is just one part of Guardian Media Group PLC, and it reported a loss of £36.8m for 2008/09. GMG PLC as a whole reported a loss before taxation of £89.8m.

But the bigger picture is important – last year the group enjoyed a profit of over £300m, and each year the figures are complicated by deals involving joint ventures, restructuring, and links with subsidiary companies. If reading a company’s annual report sounds off-putting, at least download and skim through GMG’s 2009
report – it’s surprisingly colourful, readable, and will give plenty of ideas for further research.

The Guardian might not have survived in its current form were it not for the fact that The Scott Trust draws profits from other titles such as Auto Trader, which it partly owns through the Trader Media Group. To be fair, the Trust was set up to ensure the survival of the newspaper by carefully investing its profits and that is exactly what it has done. So the editorial freedom continues even though the ‘profitability’ of the newspaper might be questioned. As the chair of GMG, Amelia Fawcett, puts it:

“While not immune to difficult market conditions, Guardian Media Group is able to place long-term security before short-term profit.”

Whilst the printed Guardian might not be ‘profitable’ by itself, Guardian Unlimited made a profit of £1m in 2006, its first year ‘in the black’ since it was launched in 1999 and after £20m of investment.

It is important to recognise that The Guardian’s status as a globally respected
source of news is partly due to its history of independent ownership. But history aside, how important is the printed newspaper today, in relation to its online version? A closer look at production might help us to answer that

Paddison, Neil, The Real World of the Newspaper Industry: A case study of the online version of the Guardian, in MediaMag, December 2009

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