Guardian: We cannot sustain loss-making local papers

The Guardian has denied the cuts at its group’s regional papers in Manchester, Surrey, and Berkshire, are to “service the ongoing expansion” of the national title.

It has also warned owners the Scott Trust cannot sustain loss-making local papers.

The National Union of Journalists has paid for an advert in today’s Guardian, signed “Guardian Media Group Regional Media Journalists”, in response to this month’s annoucements that 78 editorial jobs are to go in Greater Manchester, and a further 35 journalists in Surrey and Berkshire.

In the letter, the journalists wrote: “These [regional] papers always made a profit, providing tens of millions of pounds a year to enable our loss-making sister paper – The Guardian – to survive and flourish.

“Senior management have now decided…[to] make devastating cuts to service the ongoing expansion of The Guardian – which is losing many millions but still paying executive bonuses.”

In 2007/2008, the last year for which results are available, Guardian Media Group’s national division made a £26.4m loss, while the regional division made a £14.3m profit.

In 2006/2007, the national division loss was £14.3m, while the regional division profit was £22.7 million. GMG has said the regional division is now loss-making.

Last year, chief exeutive Carolyn McCall was paid a £385,000 bonus, while finance director Nick Castro was paid a £258,000 bonus. Guardian editor Alan Rusbridger was not paid a bonus.

However, a GMG spokesman told Press Gazette bonuses for 2008/2009 would be much lower than in previous years – and added the bonus scheme for 2009/2010 had been suspended.

In its editorial today, The Guardian denied some of the regional journalists’ claims.

It comes after Guardian and Observer NUJ members passed a joint resolution expressing their support for under-threat colleagues in GMG’s regional newspapers.

Today’s editorial states that NUJ members “are right in saying that the Manchester Evening News has for many years helped support the Guardian, which – in common with several quality national papers – struggles to be profitable.

“They are wrong to say that the proposed cuts are in order to ‘service’ the ongoing expansion of the Guardian. The sad truth is twofold.

“First, the group’s regional papers are rapidly moving from profit into loss, and all the cuts will do is to mitigate those losses.

“Second, the Scott Trust, which is the ultimate owner of the business, cannot afford to sustain the ongoing [and possibly permanent] losses of more than 30 local papers while also protecting and preserving The Guardian in the most hostile economic and technological climate newspapers have known for generations.”

The Scott Trust was created in 1936 to “safeguard the journalistic freedom and liberal values of the Guardian”.

Its “core purpose” is to “preserve the financial and editorial independence of the Guardian in perpetuity”.

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