Tortoise Media, a new online media company, is in negotiations with the Guardian Media Group to purchase the Observer, which is the oldest Sunday newspaper in the world. In a memo sent to its staff on Tuesday, GMG stated that it was currently in negotiations with Tortoise after the latter approached them with an offer.
Terms of the deal were not revealed, but those involved said that it did not involve an “extensive” cash transfer, rather a significant commitment to invest in the future of the paper, which is a sister title to The Guardian.
Tortoise announced in a press release that it would invest over £25mn for the next five-year period and commit to continue publishing the Observer every Sunday. Around 70 people work directly for The Observer. They will be consulting on their future.
Anna Bateson said that the sale of the Observer would allow GMG to “build the future position of the Observer with a substantial investment” and also enable the Guardian to concentrate on its growth strategy, which is to become more global, digital, and reader-funded.
James Harding, a former BBC director of news and editor of The Times, and Matthew Barzun – a former US ambassador in the UK – launched Tortoise in 2019.
Tortoise, according to sources familiar with the matter, is raising funds to support the transaction. Since its founding, the digital media group has raised £20mn through two capital raises from investors including Thomson Reuters chairman David Thomson and Lansdowne Partners.
The sale would be the latest in the generational reshuffling of Fleet Street’s print titles. In addition, the ownership of the Telegraph is also uncertain given that the final stages of a sales procedure are expected to take place this month.
People familiar with the Guardian’s thinking have said that the Observer, a UK print-only Sunday title, is no longer a significant part of a company that has shifted its focus to digital and international markets. One person added, “The economics are difficult”. They said, however, that they were surprised by the move and that it was never planned to close the title.
Media executives said that it was also significant that this deal marked Tortoise’s first foray into print journalism. This follows an agreement made earlier in the month by UnHerd, a digital media group backed by Paul Marshall to purchase the Spectator Magazine for £100mn.
Tortoise’s plans are said to combine newsrooms and invest in a digital Observer, while expanding the audience internationally. Tortoise will remain as a podcast and event site, while the Observer name will be retained.
Harding said that he wished to create “a new new media business” that would be a “powerful voice in the world, as well as profitable company”. Harding cited The Atlantic as an example of a struggling 167-year old magazine that is now a profitable and growing business, both digitally and in print.
The Scott Trust owns the GMG in full, allowing its titles to be independent.
The Observer, a struggling title, was purchased by GMG in 1992, beating out rival interest from Independent. The Independent had been interested at the time, but the Independent’s offer was beaten by GMG. The Independent owned the Sunday Times, a rival publication that failed to grow as fast as rivals like Lonrho. The international conglomerate headed by British corporate raider Tiny Rowland.
The Guardian will continue to operate digitally seven days a week. There are no plans to print a Guardian edition on Sunday.
Harding, Tortoise’s editor, stated that the publication would “honor the values and standards established under the Guardian’s great stewardship” and maintain the Observer’s uncompromising commitment towards editorial independence, fact-based reporting, and journalistic integrity.
GMG’s accounts, published on Tuesday, showed a 2.5% drop in revenue for the year to March. The company attributed this to a decline in advertising revenues as well as its print business. The company reported a net cash outflow of £36.5mn due to investments in Guardian US and the new Guardian Europe edition.
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