The Scott Trust has given the go-ahead for The Observer to be sold to Tortoise Media.
The decision was made at a meeting of the 12-person Scott Trust board at 9pm last night – as around 500 Guardian and Observer journalists neared the end of their two-day strike in protest at the move.
The deal is expected to be completed and signed in the next few days.
The Scott Trust has said it will take a minority stake in the new Tortoise/Observer company with a representative on the board.
Tortoise Media said it has raised £25m to invest in turning The Observer into a standalone print product with a paywalled website. The Observer and Tortoise will combine into one newsroom.
It added that the investment “will see the creation of at least a dozen new roles for staff reporters and the near doubling of the editorial budget”.
Tortoise said its investors include This Day, the charitable foundation founded by Labour donor and former Autoglass boss Gary Lubner to “create a fairer future for new generations”, and Standard Investments, which has previously backed Air Mail, Puck and Malcolm Gladwell’s Pushkin Industries podcast network.
But many Observer insiders have had deep misgivings about the deal and the future security of the 233-year-old title within a loss-making start-up company.
The 70 Observer journalists who will transfer across fear for their job security under Tortoise ownership and have other concerns around who is funding the deal and editorial independence.
Press Gazette understands the Guardian and Observer NUJ chapel will meet today to decide next steps and to agree whether or not to go ahead with a second planned two-day strike next week.
One insider said that a vote of no-confidence in editor Katharine Viner was being mooted.
Viner said in a statement: “I recognise how unsettling this period has been for Observer staff, but we’re confident we have agreed the best possible way forward for the title’s journalists, its readers and the future of both the Observer and the Guardian.
“It is a model that will see investment in journalism and journalists, enshrines the Scott Trust’s values in the Observer’s future, and protects the Observer and Guardian’s ability to continue to produce trusted, liberal journalism.”
National Union of Journalists general secretary-elect Laura Davison said: “Members at the Guardian and Observer will be angry and extremely disappointed that The Scott Trust and GMG boards have chosen to approve the deal in principle to sell The Observer to Tortoise Media despite the Union’s call for more time to consider this and other options.
“The timing of the decision, before the end of two extremely well-supported days of action, is particularly shabby. The NUJ chapel will be meeting later today to consider their response.”
Friday’s print edition of The Guardian was impacted by strike action with most stories bylined “Guardian staff” and “agencies”.
Scott Trust chair email to staff about Observer sale
Scott Trust chair Ole Jacob Sunde told staff in an email this morning: “I wrote to you earlier this week to let you know that the Scott Trust has been reviewing the ownership structure for the Observer over the last few months. Earlier this week, I set out the criteria the Trust has been taking into account to reach a decision. I believe they have now been met.
“With that in mind, we have now in principle approved the sale of the Observer to Tortoise Media.
“These are the principles we were guided by during the negotiations:
- The Scott Trust to stay on as a part-owner of the Observer
- The Observer to have secure and sustainable, long-term funding
- Other owners of the title to take a long-term view of their investment
- All owners to embody the values of editorial independence, press freedoms and liberal journalism that have been part of the Observer’s ethos since we bought it in 1993
- The Observer to be governed by a mature board structure, with a role for the Scott Trust on the Tortoise Media editorial and commercial boards
“Collectively we have thought long and hard about this decision. We have listened to staff, many of whom we know hold strong views on the Observer’s ownership. Our priority has always been to make the best decision for the Observer and its staff, serve our readers, protect jobs and support teams so that the Guardian and the Observer can continue to promote liberal journalism and thrive in a changing media environment.
“As part of the deal, the Scott Trust will invest in Tortoise Media and become one of its largest shareholders. The Scott Trust will take a place on both the company’s board, chaired by Matthew Barzun, President Obama’s ambassador to the UK, and its independent editorial board, chaired by Sir Richard Lambert, the former editor of the Financial Times.
“There will be a £25m new investment in the Observer with a long-term commitment to print on a Sunday and a plan to build the Observer into a digital brand. And the Scott Trust will join new and existing investors who are committed for the long term.
“Tortoise Media has also committed to safeguard journalistic freedom and the editorial independence of the Observer, undertaking to honour the liberal values and journalistic standards of the Scott Trust in their editorial code.
“It is expected the deal will be signed in the coming days.
“We’re confident we have agreed the best possible way forward for staff, readers and the future of both titles. It is a model that will see investment in journalism, enshrines the Scott Trust’s values in the Observer’s future, and protects the Observer and Guardian’s ability to continue to produce trusted, liberal journalism.
“We recognise that for some of you this news will take time to process and will ensure everyone is fully supported through this transition. Details on how to get that support are at the end of this email. We will be meeting with Observer staff to talk through the details of the agreement this morning. Below is information about what this deal means for those who work for the Observer:
Observer staff
- The Observer will see an increased investment in its journalism as a result of the deal and pay and conditions will not be affected.
- We are offering the opportunity to apply for voluntary redundancy, for anyone who does not want to transfer to Tortoise Media. Observer staff who move to Tortoise will maintain those enhanced redundancy terms after the transaction has completed for a period to be determined.
- Observer staff who move to Tortoise Media would also have the opportunity to apply for “internal only” open roles at the Guardian for a period still being negotiated.
- Freelance contracts will be extended until the end of September 2025 and renegotiated at that point.
“Since we were first approached by Tortoise, we have consulted extensively with colleagues, union representatives and external experts to examine the proposal and what this would mean for the Observer and staff who work for the title. There has been extensive due diligence and examination of business proposals. We have listened carefully to concerns, sought out different perspectives, and considered alternative models for the Observer’s future. And we think this is an exciting opportunity for the Observer.
“We have not received any credible alternative bids to date – we have had two separate approaches through lawyers with no substantive details. They were anonymous and then leaked to the press. Separately, Dale Vince has said he would be interested in the Observer only if there was a problem concluding the deal.
“We now believe this is the ownership model that best preserves Observer’s 233-year legacy, maintaining its position as the leading quality liberal Sunday paper.
“This is a new chapter in both titles’ histories and we will maintain our joint mission of championing independent journalism for years to come. By having the Scott Trust take a significant stake in the Observer, both papers will continue to uphold the core values that are so important to the future of liberal journalism – promoting a free press and a stringent commitment to editorial independence.”
The letter is signed by: Ole Jacob Sunde, chair of the Scott Trust, Charles Gurassa, chair of the Guardian Media Group, Kath Viner, editor-in-chief and Anna Bateson, GMG chief executive.
What Tortoise Media has to say
Tortoise Media has issued the following statement: “Tortoise and The Observer will combine into one newsroom, bringing together the digital-startup’s expertise in podcast story-telling, investigations and data journalism with the paper’s extraordinary strengths in reporting, arts reviews, ideas and, of course, food. The investment will see the creation of at least a dozen new roles for staff reporters and the near doubling of the editorial budget.
“Tortoise approached The Guardian earlier this year with a proposal to acquire the Sunday paper with a long-term commitment to maintaining it in print on a Sunday and a plan to build it into a digital brand. The Observer, which was bought by The Guardian in 1993, is currently a print-only title in the UK, which publishes its journalism on The Guardian website.
“Under the terms of the deal, the investors have committed to the principle of safeguarding journalistic freedom and editorial independence. They include This Day, Gary Lubner’s philanthropic foundation, and Standard Investments, the related investment platform of the global industrial company Standard Industries.”
Tortoise Media’s leadership team has issued the following statements:
Tortoise founder James Harding: “We are honoured and excited at the prospect of working together to renew The Observer, a name that represents the best of liberal, pioneering journalism. We admire its temperament, both tolerant and humane. We love its appetite for the arts and, of course, food.
“We promise its readers we will do all we can to live up to its history as a defender of human dignity and to give it a new lease of life as a powerful, progressive voice in
the world.”
Tortoise chair Matthew Barzun: “This process revealed the enormous regard and passionate connection so many have to the world’s oldest Sunday newspaper. I am deeply appreciative of our investor partners, including the Scott Trust, all of whom expect the highest quality independent journalism. We are filled with an awesome sense of responsibility as we become a part of its long story and participants in sharing the stories it will long keep telling.”
Chair of Tortoise editorial board Richard Lambert: “The Observer matters. In a noisy marketplace, it has an independent and progressive voice, covering ideas and stories that don’t get proper attention elsewhere. Its editorial comments are shaped its journalists rather than by other interests. These values must be supported, and I’m keen to do anything I can to help.”
Tortoise managing director Emma Sullivan: “The whole team at Tortoise is excited about bringing together our newsrooms. We recognise the scale of the challenge in creating something whole and brilliant out of two different cultures and backgrounds, but we’ll approach the job optimistically and respectfully and, together with our new colleagues from The Observer, we’re absolutely confident that we can create something much greater than the sum of its parts.”
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