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February 5, 2014

Guardian says News UK criticism of its business model ‘flawed argument based on flawed data’

By Dominic Ponsford

Guardian News and Media has accused News UK chief executive Mike Darcey of using “flawed data to inform flawed arguments” when he criticised the group’s business model yesterday.

In a speech which largely dealt with future business models for professional journalism Darcey was dismissive of the free online approach pursued by the two most popular UK newspaper websites: Mail Online and The Guardian.

Darcey said he doubted whether Mail Online would ever be profitable and said: “It is largely a redistributor, rather than a generator, copying and re-writing content from social media sites, and from other traditional news outlets…”

He described The Guardian as “systematically loss making, to the tune of about £40m a year”,  adding that “it provides no lessons for others on strategy”.

A Guardian News and Media spokesperson said: “We were disappointed to hear Mike Darcey using flawed data to inform flawed arguments."

The Guardian has also pointed out that its print circulation bas been growoing month on month in recent months and that it annual loss dropped to £30.9m for the year to the end of March 2013.

Guardian Media Group last month agreed the sale of its 50.1 per cent stake in Trader Media Group in a deal which is expected to net £600m. This gives it a current invesment fund of £850m which is expected to be used to underwrite target annual losses of around £20m.

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