Guardian Media Group in talks to sell The Observer

Guardian Media Group is in talks to sell The Observer to the online news outlet Tortoise Media after operating losses at the company’s parent widened to £43.5 million.
The Observer, which is the world’s oldest Sunday newspaper, is set to be transformed into a subscription business if it is bought by the start-up established by James Harding, a former editor of The Times.
The Observer and The Guardian have historically been made available online at no cost and funded through advertising and reader contributions, but the Sunday title is expected to be taken behind a digital paywall for the first time in its 233-year history if a deal is made with Tortoise. It is understood that Tortoise would maintain The Observer’s print edition.
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Tortoise Media, established by Harding in 2019, is believed to have promised an investment of £25 million in the first five years of its ownership. However, the price of the proposed deal is unclear and it is understood that Tortoise is not expected to pay a significant upfront sum for the newspaper.
The Scott Trust, which oversees The Guardian’s stewardship, reported another year of losses as the deal was announced. The Scott Trust Limited reported a 2.5 per cent decline in revenue from £264.4 million to £257.8 million, while its operating loss widened from £23.8 million to £43.5 million for the year ended March 31.
Tortoise Media made a £4.59 million operating loss in the year to the end of December 2022, following a loss of £3.16 million the previous year, according to filings at Companies House.
The talks with Tortoise are said to have been under way for some time, though staff were being informed on Tuesday afternoon, according to Sky News, which first reported the story.
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Tortoise Media has 120,000 subscribers to its Daily Sensemaker newsletter and its podcasts attract between two million and three million downloads each month. Tortoise has been backed by Matthew Barzun, former American ambassador to the UK, David Thomson, chairman of Thomson Reuters, Lansdowne Partners, the investment service, and LocalGlobe, the venture capital firm, since its launch.
Harding is also a former head of news at the BBC. He set up Tortoise to provide more insight and analysis of news and current affairs. Harding approached GMG and entered exclusive negotiations to buy its Sunday title after starting talks a few weeks ago.
“We believe The Observer is one of the greatest brands in news, and we believe passionately in its future both in print and digital formats,” a spokesman for Tortoise said.
“The idea of it combining with our newsroom, to marry our expertise in podcasts and live events, and their exceptional record in reporting and original thinking, as well as their passion for music and film and food, is one we are keen to explore.”
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The Observer was first published in 1791 and acquired by GMG in 1993. Katharine Viner, editor-in-chief at The Guardian, said: “This has the potential to be a very positive thing for both The Observer and The Guardian. It is extremely important to me that The Observer, with its excellent journalistic reputation, loyal readership and heritage as the world’s oldest Sunday newspaper, is in good hands.”
One media source said: “The Observer is obviously quite a small operation and it will take some unpicking. But it would be straightforward for Tortoise to relaunch it online as a standalone site.”
Guardian sources said that selling the title, which generates less than 30 per cent of group revenues, would allow it to focus more tightly on its digital and international business, which is spearheaded by the daily title.
“Any deal would have to make sense for us in financial terms though,” one warned.