Some Observer journalists say they have been left with more questions than answers after a series of meetings with Tortoise founder James Harding about his proposed deal with Guardian Media Group to buy the title.
A mandatory Guardian/Observer NUJ chapel meeting is set to be held on Thursday at 11am to “decide on our next steps”. Internal scepticism about the Observer deal is reflected by the fact NUJ chapel officers said they “will be recommending that the chapel puts the matter into dispute”.
Journalists at the Guardian and Observer passed a vote of no confidence the titles’ owners, The Scott Trust, after it was announced on 17 September that Tortoise is in exclusive talks to buy The Observer.
Since then, Press Gazette understands Harding (who is also the largest single Tortoise shareholder) has met various Observer staff to discuss their concerns about the deal. But key questions around finance for the acquisition and future business plans remain unanswered by the Tortoise team and Guardian management.
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One Guardian insider summed up the mood saying: “If the deal doesn’t go through then what is future of The Observer? The whole issue has weakened security for staff as they think either now there is a ‘for sale sign’ over The Observer or they limp on with dubious commitment from the owners.”
Questions remain among Observer staff as to how Tortoise deal will be financed and its effect on jobs
Staff concerns appear to centre around three main areas: finance, quality and job security.
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Harding has said £5m per year will be made available for investment in The Observer over and above the title’s usual runnings costs for a period of five years. But insiders fear this money could be quickly swallowed up paying for things which currently do not appear on The Observer accounts such as: online editing and production; sports, business and international coverage; coverage of Scotland and north of England; legal support; and IT and content management systems for both print and digital.
Staff have also yet to be given any information about who is providing the finance for the deal and whether any additional purchase price is being offered for The Observer, beyond the promised investment. Press Gazette has previously detailed the current Tortoise Media shareholders.
Insiders say they have yet to see a business plan or even a Powerpoint presentation providing detail about Harding’s plans for The Observer. Press Gazette has previously reported that Tortoise plans to grow The Observer with the help of an online paywall.
Staff fear that journalistic quality will suffer under the new owners without the support of the wider Guardian team (which comprises more than 1,000 editorial staff).
Job security appears to be the biggest concern among the 70 Observer staff who would transfer across with the deal. One insider said simply that staff are happy working for Guardian News and Media (GNM), which is the trading name for the combined Guardian and Observer business, and they do not want to move.
GNM has never made compulsory redundancies so its staff have some of the most secure jobs in UK journalism. Press Gazette understands that staff frequently move between The Guardian and The Observer, so they feel there are more career opportunities within the wider organisation. GNM owners the Scott Trust also benefits from a £1.3bn trust fund which is there to support the journalism of The Guardian in perpetuity. And, unlike most UK news businesses, GNM’s primary focus is on producing journalism (rather than turning a profit) free from commercial pressure and true to founder CP Scott’s liberal values.
Press Gazette understands that Harding wants to adopt an Atlantic-style model. The US monthly went from losing $20m per year to profitability and now has more than one million subscribers in print and online.
But insiders fear this will be hard to replicate in the smaller and more crowded UK market.
Guardian editor Kath Viner is understood to have told staff that any deal has to be a good one for The Observer as well as The Guardian.
A Guardian spokesperson said: “We announced last week that we are in talks with Tortoise Media about their offer to buy the Observer. Those exclusive negotiations have only just begun. It is important to be transparent with staff because it is a potentially significant investment that needs to be looked at in detail. We are engaging with staff and welcome every opportunity for internal discussions on this.”
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