After a drastic plunge in the group’s finances, The Guardian Media Group is mulling over the closure of the world’s oldest Sunday newspaper — The Observer — as part of cost cutting exercise, media report says.
“Members of the Scott Trust, the charitable foundation that owns Guardian Media Group (GMG), discussed the plan on July 6.
They were shown trial copies of an Observer-branded news magazine that would replace the paper and be published on a Thursday,” the Sunday Times said.
The proposal entailing the closure of The Observer, received opposition from some trust members and accordingly GMG executives agreed to put the scheme on hold while an alternative was worked out.
“This (the opposition) would keep The Observer as a Sunday newspaper but heavily slimmed down. Insiders now expect a decision at a trust meeting next month,” the newspaper added.
Quoting a source at the Observer, the daily said: “At the moment, I would say it is 50:50 whether we are headed for the magazine, or for job losses and cost-cuts but keeping the paper.”
Closure of The Observer would bring an end to a 218-year publishing era. It reached a peak circulation of 1.3 million copies in 1979, but now hovers at about 400,000 a week.
“The Observer is thought to have lost £10-20 million a year in recent years, and not to have made a profit since it was bought by The Guardian in 1993,” the Sunday Times said.
Guardian News and Media, the division that includes The Guardian and The Observer newspapers, made an operating loss of £6.8 million on sales of £253.6 million. Last year the loss was smaller — £26.4 million.
After the results, GMG’s chairwoman Amelia Fawcett said the results reflected the effects of recession and longer-term structural change in the newspaper industry.
“We will need to re-examine and reshape many of our existing business models if we are to continue to be successful,” she had said.
Insiders say GMG management is now studying a range of other cost-cutting plans, including redundancies. A proposal for an across-the-board pay cut has been shelved in favour of a scheme to give all staff two weeks’ extra holiday without pay, the Sunday Times said.
