The future of the Observer hangs in the balance as Guardian Media Group reviews its long-term strategy

Posted by Christie Silk on August 3, 2009 at 3:14 PM

The future of the British Sunday newspaper, the Observer, is coming under 'deliberate consideration', it was confirmed by the Chief Executive of its parent body, the Guardian Media Group. In an internal email sent around to employees, Carolyn McCall, said the publisher was "examining every aspect of... publishing strategy and titles" with view to the long-term prosperity of the group's news titles.

Rumours of a potential closure of the Obsever had led to intense media scrutiny from fellow news publications. The publishing wing of the GMG, Guardian News and Media, is currently devising a three-year strategy to secure the long-term future of its flagship publication, the Guardian. The memo added that "a wide variety of different options, approaches and scenarios is being developed and will be considered". There are rumors that the Observer may be transformed into a weekly news magazine or a slimmer newspaper.

The Observer is commonly seen as the Sunday edition of the Guardian, as both papers are parented by the GNM and the latter does not run on a Sunday. They are in fact distinct publications, although their newsrooms have become increasingly integrated over the past year.

The Guardian's website clarified, "although making substantial changes to the Observer would be a huge step that would almost certainly provoke staff opposition, it would be possible under internal company rules."

The organisation that owns GMG, the Scott Trust, is "mandated to secure the financial and editorial independence of the Guardian in perpetuity".

The Observer, however, does not come under the charter's protection, as it was conceived before the group purchased the title in 1993. The Guardian enjoys a rather unique condition as being ran by a trust, a status, which has to an extent protected it from market strictures.

A host of British quality newspapers, including the Financial Times and the Times are speculating as to the reasons for a possible axe of the 218- year old title, the future of which could have ramifications for the development of fellow British titles. All of the analyses have made reference to the group's financial situation.

Last week, the GMG revealed in their annual results that Guardian News and Media had made an operating loss of £36.8m in the year ending on 29 March. Overall, the GMG suffered a huge £89.8m loss, a huge fall when compared to last years profit of compared with a profit last year of £306.4m. The large scale the loss, however, can be explained by the fact the accounts for the Trader Media Group, in which GMG owns 50.1 per cent were tabled separately. This is also true for the B2B publishing business, Emap, of which the GMG has joint ownership.

The strategic review, moreover, come as the group seeks to navigate its publications through long, term structural changes in the media ecology, as reading habits and advertising trends move further towards online and digital platforms.

Sources: The Guardian
              The Times Online
              The Financial Times
              Press Gazette