No news is good news for the financial engineers who underwrite The Guardian

The Guardian is starting to look a bit like one of Leonardo Da Vinci’s perpetual motion machines.

News International might have ditched plans to move out of Wapping. But the Guardian has completed its move to a new HQ in Kings Cross.

DMGT and the Barclays are cutting costs aggressively. But there’s no news of cuts at the Guardian. The paper remains the only national that hasn’t embarked on a high-profile effort to trim its outgoings.

Leonardo drew pictures of machines that would violate the first law of thermodynamics. By contrast, Carolyn McCall and Alan Rusbridger appear to be running one.

The last thing I want to do is to anticipate carnage where none currently exists. That said, I’ve started to wonder about the amount of juice left in GMG’s incredible cross-subsidy machine. Can it guarantee perpetual motion in perpetuity?

Guardian Media Group’s last annual report, written shortly after the joint venture deal with Apax Partners to buy EMAP Communications, sheds very little light on what’s expected from the company’s cash cows this year.

But the cashflow being generated by EMAP’s B2B magazines and Trader Media Group must be a concern.

Trader Media might well generate lots of revenues from the web. But the collapse in car sales won’t be doing it any favours.

As for EMAP’s stable of magazines and exhibitions, it, too, is probably somewhere close to the eye of the storm. The B2B recession arrived late, but hit hard.

The other potential concern is the health of GMG’s joint venture partner, Apax, the private equity fund.

A year ago, Apax Partners and GMG stumped up £1bn to buy EMAP (plus a further undisclosed amount to cover debts and liabilities). Apax had already paid GMG £650m for a 49% stake in Trade Media Group.

No-one beyond Apax itself knows how much debt is associated with those deals. As ever, disclosure doesn’t rank high on the list of private equity priorities.

Things are slightly different in the case of quoted private equity companies. Here, the side effects of indebtedness are starting to become visible. In recent weeks, two big funds — 3i and Permira — have been hit by very public crises

Simon Walker, the former Royal PR who now runs the private equity industry’s trade association, tells the Times that he expects some deals to “fail” during the next couple of years.

There’s been nary a whisper of concern about Apax in the markets. But it won’t necessarily take a crisis to change the fund’s attitude to its investments. In the context of a joint venture, shifts like this can be tricky to handle.

This much is clear from events in the Netherlands, where Apax’s involvement with the newspaper group PCM fell apart amid much acrimony last year. In some ways, that relationship looked a bit like the one that exists between the Scott Trust, GMG and Apax.

At Guardian Media Group, a whole lot of jobs depend upon the stability of a business partner that has shown itself to be accomplished at financial engineering.

I’ll say it again: so far, there have been zero signs of difficulty. For the everyone’s sake, let’s hope it stays that way.

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