Guardian Media Group chief executive Carolyn McCall has issued a staunch defence of the company’s financial position, saying it had “come out of the recession very strong”.
The past 18 months as chief executive of GMG, owner of The Guardian and The Observer newspapers, were “challenging” McCall said today in an interview with the Financial Times but when asked whether she thought the the company’s finances were current in “rude health”, she said “yes”.
McCall claimed all of GMG’s businesses improved their performance year-on-year in December but that the company still expected “minuses [losses] across the board” to add to the £90m losses it made in the year to March.
Despite this position, she refused to countenance the idea that the group’s financial situation required it to undergo wholesale changes.
She told the FT: “We are in very good shape, very, very good shape and we have come out of the recession very strong.”
Like many other leading media businesses the recession hit GMG hard as advertising dried up across its publications and radio stations.
Executives at Guardian News and Media, publisher of The Guardian and The Observer, admitted last year that its losses were running at £100,000 a day as they instigated a round of cuts which has so far led to 150 jobs going across commercial and editorial departments.
GNM also considered scrapping The Observer last year, as part of a review of operations, before settling on a pared-down redesign as a way to curb costs.
GMG has also been engaged in hefty job cuts and is in talks, thought to be with rival publisher Trinity Mirror, over the possible sale of its regional newspaper business – including the Manchester Evening News..
In addition, Apax, its partner in a £1 billion takeover of Emap, has since written its investment down to zero and the business publisher has warned of “significant doubt” that it could continue as a going concern if economic conditions deteriorate and renovations with its lenders fails.
McCall maintains that she is “absolutely confident” that GMG has a sufficiently large cash reserve to support future losses and said she would “do the Emap deal again from where we are sitting”.
All Emap’s profits are used to pay-down the £700m debt used to purchase the company. GMG is currently in talks over a possible injection of further cash into Emap to support he purchase of new titles, although McCall said GMG had not decided on this yet.
Last week, Guardian editor Alan Rusbridger outlined his vision why Guardian.co.uk needed to remain a free-to-use website and avoid the introduction of the paywalls being considered by many of its rival newspaper brands.
McCall today backed that claim but left the door open for more specialist parts of the GMG business to charge for online content.
Last month, it emerged that GNM was surveying readers of its PaidContent website about the possible introduction of paid-for digital services.