Billion-Dollar Endowment Leaves London’s Left-Wing Journalists Unhappy, on Strike

Guardian’s sale of Observer looks like layoff in disguise

[The Editors is called The Editors, plural, not The Editor, singular, for a reason. When I launched it, a shrewd friend advised, “it can’t just be you.” I’m delighted to start introducing some additional voices. Today’s comes from Michael Mosbacher, who is associate comment editor at London’s Daily Telegraph. He is a past editor of Standpoint and The Critic, having co-founded both British magazines.—Ira Stoll.]

Striking journalists picketing outside the Guardian & Observer offices. Photo credit: Andrew Pakes MP/NUJ.

The Guardian media group right now is not in a happy place. This bastion of media progressivism — with substantial US and Australian operations, its reach goes far beyond Britain’s shores — saw its journalists go out on strike last week, and they are set to do so again.

The Guardian and its Sunday stablemate, The Observer, have suffered from an eruption of the autophagy that periodically envelops left-wing journalism.

At least three prominent female writers have left and found berths elsewhere after they felt they were being blocked from standing up for women’s rights by a belligerent trans lobby among younger journalists on the papers’ staff.

The Observer’s brilliant restaurant critic, Jay Rayner, announced his move last month to the Financial Times, saying that as a Jew, however non-observant, working for The Guardian group was “uncomfortable, at times excruciating.” He went on to say that The Guardian employs outright antisemites, and that the Editor-in-Chief, Kath Viner, is aware of this, but has chosen to do nothing about it. The Guardian’s Middle East coverage is internationally notorious for its venomous anti-Israel tilt. Viner herself is the author of a play, “My Name is Rachel Corrie,” valorizing a slain anti-Israel activist.

The New York Times gave front-page treatment to sexual harassment claims against an Observer columnist, Nick Cohen, who was pushed out of the paper. I know nothing about the veracity of the allegations against Cohen, who has written for me in the past, but I do know that he is a man of the left who is fearlessly prepared to stand up to Islamists and antisemites and the left’s accommodation with them. Such views will not have chimed well with many of his colleagues.

The latest labor strife relates not to these issues but rather to a plan, now approved, by the group’s board, to sell The Observer to Tortoise Media, a self-proclaimed “slow news” site. Sale is perhaps not the right word. Unlike The Spectator’s recent £100 million ($127 million) sale, the only money changing hands this time is £5 million ($6.4 million) being given by The Guardian group to Tortoise, in return for a stake and taking the loss-making Sunday paper off its hands. Tortoise say they have raised an additional £20 million ($25.4 million) to invest in the title.

The Observer describes itself as the world’s oldest Sunday newspaper, established in 1791.

Tortoise is an online venture set up in 2018 by the former director of BBC News and editor of London’s Times, James Harding, and an Obama-era American ambassador to London and Democratic fundraiser, Matthew Barzun. Its impact on public debate so far has been negligible.

One aspect of The Guardian group’s case for selling The Observer is strong. The Observer’s weekly print sales, around 80,000, pale beside The Guardian’s monthly online audience of about 35 million. Web consumers do not differentiate between The Guardian and The Observer. Online, knowing if something is from The Observer requires a very close look at the small print.

The Guardian has no paywall, relying instead on voluntary donations from readers, who pitch in tens of millions of dollars. That approach has made it difficult to develop The Observer as a standalone brand on the same platform.

Tortoise will launch a new Observer site and put it behind a paywall. It has pledged to keep the weekly print edition, but many of its journalists are skeptical it will do so.

The Guardian group’s board argue they also need to stem financial losses. The Telegraph and The Guardian group’s have roughly similar revenues — last year £268 million ($341 million) and £257 million ($327 million) respectively. But on this, The Telegraph made an operating profit before exceptionals of around £50 million ($64 million) and The Guardian made a loss of £36 million ($46 million).

Some claim that The Guardian’s unique structure makes these losses sustainable. In 1936, the paper was handed over by its owner to The Scott Trust, whose purpose is to preserve the paper in perpetuity. In its quest for donations, The Guardian makes much of the fact that it thus has no billionaire owners, but that is not entirely accurate. This Trust’s endowment has grown to £1.3 billion ($1.65 billion) — easily enough to keep both The Guardian and Observer going on indefinitely, the striking journalists argue.

The Observer was acquired by The Guardian in 1993. At the time, it appeared that The Observer would have the same Scott Trust underpinning as its sister. It is now clear that the pledge of perpetual funding only applies to The Guardian.

The Observer’s 70 standalone journalists are unhappy to discover that instead of being able to fall back on a billion-plus endowment, their future is now in the hands of a so-far unsuccessful venture with uncertain funding and unknown prospects. Many of them feel this is not a sale at all, but rather a stealthy way of laying off journalists. The mood was not lightened when at a raucous meeting, the Scott Trust’s Norwegian chairman, Öle Jacob Sunde, could not recognize or name many of the group’s star columnists and reporters.

Recent events seem to support the old Fleet Street aphorism that left-leaning newspapers make the worst employers. They also point to some issues that transcend the media industry and afflict the global left in America as well as in the U.K.—the self-devouring nature and turbulent excesses of identity politics, along with the ability of endowments to insulate institutions from reality for just long enough to create their own real risks.