Andrew Miller, the new chief executive of Guardian Media Group, has outlined a shift in the company’s strategy, refocusing on the Guardian and Observer titles and moving away from managing a portfolio of multimedia assets.
Mr Miller’s medium-term strategy is to retain the Guardian and Observer newspapers and websites at the core of a structure that resembles the Wellcome Trust, with funds from investments supporting the lossmaking news assets.
Any assets not part of Guardian News & Media, the main division of GMG, could be disposed of in the medium- to long-term, people close to the company said. The proceeds would then be put together to form an investment trust that would provide reliable income to support the more volatile revenues and profits generated by the Guardian and Observer titles.
“Guardian News & Media is the core part of our group and it’s always been the case that our wider portfolio of investments is kept under constant review. That said, there are no plans for disposals of GMG businesses in the immediate future,” a spokesman said.
GMG suffered pre-tax losses of £171m in 2009-10, mainly due to impairments, on turnover that fell 12 per cent to £476.2m.
Mr Miller, who addressed staff in a Guardian editorial conference on Friday, said Guardian News & Media was the group’s core asset.
Other parts of GMG’s portfolio – the bulk of which comprises large stakes in Trader Media Group and Emap – would be managed as “arms-length” investments, he said, used to sustain the core business.
GMG expects to dispose of its stake in Trader Media within two years. But Mr Miller’s plan for a narrower focus on GNM suggests the radio assets, property division and Emap could also be put up for sale in the medium- to long-term.
Mr Miller wrote in an e-mail to staff: “GNM is our reason for being, and it will be my and GMG’s primary focus accordingly.”
That sentiment echoes the original remit of the Scott Trust, the not-for-profit body that owns GMG and exists to secure the financial and editorial independence of the Guardian “in perpetuity”.
In the past decade, GMG diversified its assets, acquiring and building non-newspaper companies in a bid to create a broader multimedia group.
In 2003, the group took full control of Trader Media for almost £600m. Four years later, GMG sold a 49.9 per cent stake of Trader to Apax, the private equity group, bringing in £650m.
The proceeds helped fund a variety of acquisitions including a 32.9 per cent stake in Emap, the trade publisher that GMG acquired with Apax in 2007.