Guardian Media Group has told staff that it is set to make an operating loss in the current financial year when its results are announced in August.
The national newspapers division, Guardian News and Media, is set to make a loss of £35m – staff were told today in a briefing.
The regional newspapers division is expected to make an operating profit of less than £1m, compared with £14.3m, last year – the Guardian reports.
GMG will not make any money from its profitable joint ventures with Apax – Emap and Trader Media Group – staff were today told. The profits from these businesses will instead be “ring-fenced” to pay off debt.
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Private equity firm Apax and GMG bought Emap’s B2B division in a joint venture worth £1.3bn in 2007. Last week it was revealed that Apax has since written down the value of the 70 per cent of Emap it bought by £300m.
This prompted Press Gazette’s Media Money blogger Peter Kirwan to conclude that GMG’s “Marx-Engels” publishing model was “under pressure but far from broken”.
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