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The Scott Trust, the £1.3bn fund that owns the Guardian and Observer, will meet next week to discuss investing some of its money into a deal with Tortoise Media to win over staff ahead of planned strikes next month, people close to the talks said.
Observer staff have mounted strident opposition to Tortoise’s proposed takeover of the 232-year-old Sunday title with a series of strikes planned for next month, raising concerns about their future under a lossmaking digital start-up and questioning whether the £25mn promised as investment in the newspaper will be enough.
The Scott Trust will consider injecting additional money into the combined group in order to help to finance the business, according to two people familiar with the talks. “The Scott Trust wants the title to be successful going forward,” they said.
The option will be among the matters discussed by members at a meeting of the Trust next week that could give the deal the go ahead after initial support from the Guardian’s own board earlier this month, the people said. However the board could also decide to delay any decision until later in the month while talks with the union continue.
The potential extra investment could help address concerns about jobs and the future of liberal journalism under Tortoise, which has promised to bring together the brand and readership of the Observer with its digital platform and events business.
One of the people said that the Guardian’s owner — an endowment fund set up by the Scott family in 1936 to secure the financial and editorial independence of the Guardian in perpetuity — was also conscious that they might feel obliged to take back the Observer if the deal were seen to have failed.
No decision has been made on whether or how much to invest, which will be subject to discussion and agreement by the trust at a meeting next week. Guardian Media Group declined to comment.
Harding has already assembled funding from a range of investors, including Gary Lubner, a South African donor to Labour, to fund a £25mn, five-year investment plan. The Guardian will also retain a minority stake.
The latest olive branch to Observer staff comes as opposition has mounted in the Guardian newsroom, which has voted to go on strike for four days in December in protest over the deal. The Guardian Media Group is talking with the union now through the Acas resolution process.
On Friday, several Observer staff pointed to the fact that Tortoise itself has been forced to make cost cuts, including jobs, with some of initial plans for a long-form newsroom alongside its podcasting and events businesses having fallen away.
One senior journalist said: “The whole thing seems slanted to prolong the life of Tortoise rather than ensure the Observer has a custodian who can ensure its longevity.”
Tortoise reported a loss of £4.6mn on revenues of £6.2mn in 2022, according to boss James Harding, but he told the Financial Times this week that the group was forecast to be profitable for the first time this quarter, and for the full year next year.
