Ian Burrell: A week when the BBC and Guardian reveal their hidden financial pain

Mark Thompson and Alan Rusbridger have been allies in countering the power of Rupert Murdoch’s News Corp
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The Independent Online

This is a big week for the BBC, which releases its annual report later this morning, and for Guardian Media Group, which will warn its staff at meetings tomorrow that it is losing in the order of £1m a week.

It is a key moment for Mark Thompson, the retiring Director-General, who will use the presentation of his final set of accounts as an opportunity to underline the legacy he has left during eight years in charge of the BBC. His successor George Entwistle will learn a little more of the serious financial challenges he has inherited.

And it is a crucial juncture for Alan Rusbridger, the editor-in-chief of The Guardian, who must reassure his nervous troops that his radical "digital first" strategy is not leading the title to disaster. Last week, Rusbridger prepared for a day of staff presentations and question and answer sessions on annual losses of around £50m by taking a short break to practise his piano playing.

Thompson and Rusbridger have been allies in countering the power of Rupert Murdoch's News Corp. Both have been ambitious expansionists and their organisations are at the forefront of digital news provision in Britain, with offerings developed by spending public funds and charitable trust reserves respectively.

Many users of these slick websites will be unaware of the financial problems that threaten the organisations that produce them. Last week at Westminster, MPs and broadcasting unions called for a reversal of the BBC licence fee settlement which Mr Thompson struck with the Coalition Government, leading to 2,000 job losses across the organisation.

The annual report will need to show that promises to deliver further cuts in executive salaries and expenditure on talent have been met. Executive pay was "the one call that Thompson got seriously wrong in his tenure," says Steve Barnett, professor of journalism at the University of Westminster.

Entwistle must deliver further austerity measures – including 25 per cent cuts on the BBC website by 2013-14 – in the knowledge that BSkyB, in which Mr Murdoch's News Corp still has the largest shareholding, is making £1bn profit a year and is spending it freely on drama, comedy, and entertainment talent, areas that have been key to BBC ratings in the past. Alongside the satellite broadcaster, the once dominant BBC suddenly seems like the poor relation.

The message from Mr Rusbridger and the GMG chief executive, Andrew Miller, on Tuesday will be that digital revenues are rising, though these earnings are nowhere near enough to stem total losses that they both know are unsustainable.

Guardian staff will hear that GMG is sitting on a £200m cash and investment pile, plus a £60m windfall from the sale of radio assets and a half share of the lucrative Trader Group. They will be told that the £50m loss is in line with expectations of a five-year plan that began last year, when Mr Rusbridger made what seemed like a landmark announcement that The Guardian was becoming a "digital-first organisation". The group, he said, would "move beyond the newspaper, shifting focus, effort and investment towards digital, because that is our future".

But while he appeals to staff – who will be invited to consider a revived voluntary redundancy programme – to hold their nerve, The Guardian's editor knows that print still delivers two-thirds of the company's revenues and sales of the paper are down 18 per cent year-on-year.

Tellingly, GMG is currently anxious to emphasise its commitment to the traditional newspaper. "Reports of the imminent demise of print are wholly exaggerated," says a Guardian source. "Print will be with us for many years to come, but its revenues will continue to decline and inevitably it will be something that news organisations cease to do." That "digital-first" doctrine seems to have softened.

Daniel goes from downton to last days of Diana

One of the stars of Downton Abbey has been cast in a controversial role in a feature film about Diana, Princess of Wales, which supports the theory that she deliberately staged photographs taken in the last days of her life in order to provoke a reaction from her lover Hasnat Khan.

Daniel Pirrie, who played the cad Major Charles Bryant in the hit ITV drama, has been filming the role of the British celebrity photographer Jason Fraser, who is said to have arranged to take pictures of Diana following phone conversations with the Princess during a holiday she was taking with her boyfriend Dodi Fayed.

The Diana biopic, which features Naomi Watts in the starring role, is likely to anger Dodi's father Mohamed al Fayed, who believes the Princess was the victim of a covert operation by paparazzi photographers.

The Absolute truth – not-so-youthful Vaughan moves to where his face fits

Johnny Vaughan is off to work on Absolute Radio for the Olympics. Eight months after dramatically walking out of Capital after eight years presenting the breakfast show he says that in an era when radio has become a visual medium he no longer looked youthful enough to be the face of a pop network.

"Capital sell with TV ads and the fact is that I can't be the 'Face of Hit Music'.

"It becomes, after a while, like watching your dad dance. I could still dance at a wedding and that's kind of fine. But I wouldn't go clubbing with the kids. And that's what Capital is about."

He launches a drive-time show from 27 July on Absolute where his new colleagues will include such evergreen dancing dads as Rolling Stone Ronnie Wood.

"I'm moving to a crowd where your face fits and where it's not so embarrassing to see you rocking out," says Vaughan, 45.

Twitter: @iburrell