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May 1, 2019updated 30 Sep 2022 7:43am

Guardian performs remarkable comeback, but at cost of 450 jobs

By Freddy Mayhew

The successful turnaround of the Guardian and Observer titles’ finances is a remarkable feat in an extremely challenging market for news and is proof positive that people still value quality newsgathering.

Publisher Guardian News and Media announced today that it had made an operating profit (EBITDA) of £0.8m for the year to the end of March, up from an operating loss of £57m in 2015/16.

Total revenues of £223m for the year are GNM’s highest since 1998. Income from digital advertising, reader contributions and subscriptions makes up 55 per cent (£123m) of the total.

But the three-year path back to black, which began in April 2016, has not been an easy one for GNM.

Chief architects of the reformation, editor-in-chief Kath Viner and chief executive David Pemsel, have cut 450 jobs, of which 120 were voluntary editorial redundancies, turned both papers tabloid and reduced news operations abroad along the way.

The title has also had great success with a new reader-funded model for journalism that relies on donations to keep its online offering free to all, turning away from the exclusivity of a paywall.

It now has more than 655,000 monthly paying supporters – made up of “contributors”, subscribers and members – and received 300,000 one-off contributions in the last year.

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Contributors can pay from £2 a month to support the Guardian for no material return, while subscribers pay from £5.99 a month to go ad-free on digital and from £10.79 a month for savings on print.

Viner (pictured) has previously insisted the newspaper is not a charity, despite offering very little incentive for readers to pay for its content beyond the altruistic desire to keep the news free for others to read.

The model is unique among news publishers, which are largely split between those who demand payment for access, putting content behind paywalls, and those who chase scale and digital advertising money.

It’s not certain if other titles could replicate GNM’s success, with the Guardian holding a unique place in the news ecosystem as the only quality daily with a left-leaning liberal perspective.

The Guardian’s circulation is the lowest among its national daily rivals at 134,443, according to ABC figures for March, while the Observer sold 163,814 copies in the same month.

But it has the third-highest monthly print/digital reach among UK newsbrands, behind the Mail and the Sun, according to recent Pamco readership figures, and scores highest for trust and engagement.

GNM claims its digital revenues are growing faster than its print revenues are shrinking.

In its announcement today, the publisher also revealed it had reduced costs by more than 20 per cent over three years.

While its operational finances are profitable, Guardian Media Group as a whole – of which GNM is a part – reported a cash outflow of £29m for 2018/19, down from £86m in 2015/16. It claims these costs are covered by owners The Scott Trust’s £1bn endowment fund.

The group said that if its cash costs, which are separate from the operation of the business, remain between £25m and £30m, this is “financially sustainable” within the fund’s long-term annual returns.

It said its news operations in Australia and the US were now financially sustainable, having found “growing and loyal audiences in their markets”, recording double-digit revenue growth last year.

GNM has now set itself a new three-year target, with the aim of growing its paying supporter base to 2m by 2022.

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