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Losses at the Guardian Media Group are to increase significantly according to the outgoing Chief Executive. Carolyn McCall, who is heading to EasyJet blamed the continuing downturn on write-downs on its investments. Staff was told that pre-tax losses in the 12-months to March would be larger that the £90m loss made the previous year. The company has recently managed to stem the some of the £100,000 a day losses by cutting more than 100 of its 1,700 editorial and commercial posts through its rolling voluntary redundancy scheme. Savings are also being found with the merging of operations with Sunday sheet Observer and the £7.4m sell-off of its regional newspaper business. The latest loss warning results from write-down investment in its radio stations and business publisher Emap, which it bought in partnership with investment firm Apax.
£1.2bn write-downs
Apax and GMG paid almost £1.1 billion to buy Emap in March 2008. Just a year later, Apax wrote down the value of its investment to zero because of the recession. It is believed Emap will be written down by £100m - GMG invested £300m plus debt when it took hold of the company. McCall’s last major act as chief executive was to pull GMG out of local and regional newspaper journalism by selling its 32 newspapers to Trinity Mirror for £7.4m cash and the release from a £37m contract to print its papers at Trinity Mirror presses. The company will publish details in July. A spokesman said operating losses at GMG had fallen over the period and that Guardian News & Media, the division that publishes the Guardian and the Observer, had reduced its costs by around £26m and was expecting underlying losses for 2009/2010 to be level with the previous year. Provided that revenue continues to stabilise, GNM expects its losses to reduce throughout the 2010/2011 financial year.
Job losses
Earlier in the year nearly 40 editorial staff took voluntary redundancy. There have been several high profile departures from The Observer following an announcement from GNM that it would relaunch a much reduced version of the paper to help bring down costs. In September it emerged that Observer political editor Gaby Hinsliff was to leave the paper after nine years service.
Paywalls?
Despite being the UK newspaper least keen on charging for its online content - the paper has admitted it is considering charging for access to its digital media news site PaidContent, although such considerations are seemingly part of a wider review about the future development of the US-based service. The Guardian recently revealed if paid £4 million to buy PaidContent last year, quite a lot less than what had been rumoured when the acquisition took place in 2008.
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