Stephen Glover: When an editor's ambitions were too grandiose

The notion that The Guardian would close The Observer, or turn it into a weekly magazine, always seemed unlikely. I don't say there weren't one or two members of the Scott Trust (which owns both titles) who did not seriously consider the idea. Some senior Guardian executives have undoubtedly had it in for their sister paper for years.

In the end, though, the powers that be understood that shutting the world's oldest Sunday paper would not go down well with the nation's liberal chattering classes. Anyone who knows anything about The Guardian realises it is run along lines that would bring a tear to the eyes of a Wal-Mart executive. But the paper likes to pretend it occupies a more elevated universe than the rest of us, and such an impression would hardly be promoted if it killed off The Observer.

Internally, the threats of closure had another purpose – to bring Observer journalists to heel. The title can be shut down, or most of you can continue in employment in a paper more closely integrated with The Guardian: that was the implicit threat, and it seems to have worked, with the National Union of Journalists cautiously welcoming last Thursday's announcement. A slimmed down, integrated Observer will be one step nearer what may well be the final outcome: a seventh-day version of The Guardian.

Naturally I am pleased that The Observer will continue in business, at any rate for the time being, but we should be in no doubt that deliberations over its future have been part of a wider crisis. Last week Tim Brooks, managing director of both newspapers, informed staff they are losing £100,000 a day, which he said was unsustainable. This was not necessarily news, since we already knew that the papers and their website lost £36.8m in the 12 months ending 29 March. The Scott Trust has considerable liquid assets, but these could not absorb losses of this magnitude for very many years.

Some journalists on The Guardian blame The Observer for their financial predicament, but the paper is not the chief culprit. The Guardian used to be run as a low-cost operation that kept an eye on the pennies. In recent years, its ambitious though mild-mannered editor, Alan Rusbridger, has tried to turn the paper and its website into an internationally renowned publication. He was the Gordon Brown of Fleet Street.

About £100m was spent on new presses. Staffing soared so that at one stage there were over 850 journalists on the payroll. The paper moved from cramped, but surely adequate, premises in Farringdon Road to capacious, ritzy new offices near Kings Cross containing a small concert hall. This was all nearer to Citizen Kane than the old Manchester Guardian. The trouble is that, far from challenging The New York Times for world supremacy, The Guardian has been slowly leaking sales (though not, to be fair, as much as some titles, including this one) while the costly website has never produced any profits.

Generally speaking, I am all for newspaper editors spending as much as possible, and I do not really blame Mr Rusbridger for presiding over a spending spree. The trouble is that high-rolling editors sometimes need to be reined in. Mr Rusbridger long ago galloped over the horizon. Now, as Tim Brooks indicates, The Guardian and The Observer have a cost base wildly out of synch with their ability to generate revenue. Savings achieved by further integrating the two newspapers represent only a small proportion of what will be needed.

The BBC has come under fire from all quarters

When James Murdoch recently unleashed a fusillade against the BBC at the Edinburgh Festival, the Corporation's top brass were pretty relaxed. They believed, probably correctly, that in a stand-off between Rupert Murdoch and his son James on the one hand, and dear old Auntie on the other, most of the public would support the latter.

Now, though, the BBC finds itself under more lethal attack. Last week Ben Bradshaw, the Culture Secretary, said that it had "reached the limits of reasonable expansion," and suggested it should come under the wing of an independent regulator. Meanwhile his Tory opposite number, Jeremy Hunt, went much further in an interview with the Daily Mail.

Forget the Murdochs. It is not good news for the BBC to have both main parties gunning for it. What Mr Hunt proposed amounts to a significant curtailment of its powers. Its online presence would be scaled back. Inflationary increases to the licence fee would cease, and BBC3 and BBC4 might be scrapped. Executives would have to make do with a maximum of £192,250 a year, which would mean that the salary of the next director-general would be less than a quarter of that of the present incumbent, Mark Thompson.

Of course, we don't know whether a future Conservative government would really do any of these things, but it is interesting that a party that is often timid about revealing its plans should be so upfront in the case of the BBC. This suggests that the Tories have worked out that, despite its claims of widespread public support, the BBC has lost friends in many quarters, notably on the centre-left.

It is no longer just the Murdochs and the right-wing press that have it in for the BBC. Even Labour wants to rein in its powers. Who will squeal if the Tories act?

Newspaper stocks are starting to make a recovery

Wherever two or three newspaper people are gathered together, you will hear tales of woe about their trade, and blood curdling prophecies about the future. Some investors, however, appear to be taking a more positive view.

Last autumn you could hardly give some newspaper shares away. At one stage, Trinity Mirror's shares plunged to just over five pence. Shares in the regional group Johnston Press fell a fraction lower.

Now almost all media stocks have recovered to a degree, in some cases far more sharply than the market as a whole. The recovery is not limited to companies such as Daily Mail and General Trust, more than half of whose revenues comes from non-newspaper interests. For example, Trinity Mirror's shares stood at £1.64 last Friday, while Johnston Press's were at just over 40p.

Last autumn panicky investors behaved almost as though newspapers had a few months to live. Now they appear to think that, although they may be ultimately doomed, some of them will produce profits, at any rate in the medium term.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Recruitment Genius: Professional Sales Trainee - B2B

£15000 - £30000 per annum: Recruitment Genius: First things first - for the av...

Guru Careers: Creative Designer / Graphic Designer

Competitive: Guru Careers: We are seeking a Creative Designer / Graphic Design...

Guru Careers: Graduate Marketing Executive / Marketing Assistant

£18 - 23k (DOE): Guru Careers: A Graduate Marketing Executive / Assistant is n...

Recruitment Genius: Business Analyst - ECommerce

£35000 - £43000 per annum: Recruitment Genius: We are 'Changemakers' in retail...

Day In a Page

Seifeddine Rezgui: What motivated a shy student to kill 38 holidaymakers in Tunisia?

Making of a killer

What motivated a shy student to kill 38 holidaymakers in Tunisia?
UK Heatwave: Temperatures on the tube are going to exceed the legal limit for transporting cattle

Just when you thought your commute couldn't get any worse...

Heatwave will see temperatures on the Tube exceed legal limit for transporting cattle
Exclusive - The Real Stories of Migrant Britain: Swapping Bucharest for London

The Real Stories of Migrant Britain

Meet the man who swapped Romania for the UK in a bid to provide for his family, only to discover that the home he left behind wasn't quite what it seemed
Cheaper energy on the way, but it's not all sunshine and rainbows

Cheaper energy on the way, but it's not all sunshine and rainbows

Solar power will help bring down electricity prices over the next five years, according to a new report. But it’s cheap imports of ‘dirty power’ that will lower them the most
Katy Perry prevented from buying California convent for $14.5m after nuns sell to local businesswoman instead

No grace of God for Katy Perry as sisters act to stop her buying convent

Archdiocese sues nuns who turned down star’s $14.5m because they don’t approve of her
Ajmer: The ancient Indian metropolis chosen to be a 'smart city' where residents would just be happy to have power and running water

Residents just want water and power in a city chosen to be a ‘smart’ metropolis

The Indian Government has launched an ambitious plan to transform 100 of its crumbling cities
Michael Fassbender in 'Macbeth': The Scottish play on film, from Welles to Cheggers

Something wicked?

Films of Macbeth don’t always end well - just ask Orson Welles... and Keith Chegwin
10 best sun creams for body

10 best sun creams for body

Make sure you’re protected from head to toe in the heatwave
Wimbledon 2015: Nick Bollettieri - Milos Raonic has ability to get to the top but he must learn to handle pressure in big games

Nick Bollettieri's Wimbledon files

Milos Raonic has ability to get to the top but he must learn to handle pressure in big games
Women's World Cup 2015: How England's semi-final success could do wonders for both sexes

There is more than a shiny trophy to be won by England’s World Cup women

The success of the decidedly non-famous females wearing the Three Lions could do wonders for a ‘man’s game’ riddled with cynicism and greed
How to stop an asteroid hitting Earth: Would people co-operate to face down a global peril?

How to stop an asteroid hitting Earth

Would people cooperate to face a global peril?
Just one day to find €1.6bn: Greece edges nearer euro exit

One day to find €1.6bn

Greece is edging inexorably towards an exit from the euro
New 'Iron Man' augmented reality technology could help surgeons and firefighters, say scientists

'Iron Man' augmented reality technology could become reality

Holographic projections would provide extra information on objects in a person's visual field in real time
Sugary drinks 'are killing 184,000 adults around the world every year'

Sugary drinks are killing 184,000 adults around the world every year

The drinks that should be eliminated from people's diets
Pride of Place: Historians map out untold LGBT histories of locations throughout UK

Historians map out untold LGBT histories

Public are being asked to help improve the map