“Three years ago, the Guardian faced severe financial challenges,” they said in the memo. “Our operating losses were forecast to exceed £80m in a single year, our print revenues were in structural decline, our international businesses were growing but unprofitable, and digital ad revenues began flowing to the tech platforms rather than to publishers at an increasingly rapid rate.
“It was clear that we needed to take urgent action to safeguard the future of the Guardian in perpetuity. In January 2016, we launched our new relationship strategy, aiming to deepen our reader relationships, increase the financial contribution from our readers, evolve our advertising proposition and reshape our organisation and our finances.”
They said costs had been reduced by 20% in the last three years, a period during which the number of people employed at the Guardian fell, while revenues had grown at at a steady pace.
Despite industry-wide circulation declines, the company has also committed to the physical newspaper for the foreseeable future, having converted to a tabloid format at the start of 2018 and signing a five-year contract with Trinity Mirror to produce the print edition.
The memo highlighted the focus on building a core daily readership rather than chasing global reach at all costs, with 40% more regular readers than three years ago and a growing number of print subscribers. It also said Guardian US and Guardian Australia had each doubled their revenues since 2016, and were both financially sustainable in their own right.
Guardian News and Media is ultimately owned by the Scott Trust, which uses an endowment built up from past investments to subsidise the organisation’s ongoing operations.
“In cash terms, which is the best measure of our financial sustainability, we expect our cash outflow in 2018-19 to be within the £25-30m range which the Scott Trust can currently fund each year,” said Viner and Pemsel.
They also outlined their vision for the next three years, which includes investing in journalism, growing the Guardian’s international presence, and increasing the diversity of both reporting topics and staff.
© The Guardian