James Harding, one of British journalism’s most experienced editors, must try to win over angry Observer staff who are threatening to strike against his plans to buy the UK’s oldest Sunday newspaper for his online media group Tortoise.
Harding, who previously led the BBC’s news operations and before that was editor of the Times, is expected to appeal directly to Observer staff and the newspaper’s powerful union chapel in early October. He will try to persuade them of his plans to invest in the future growth of the title, which is currently part of the Guardian Media Group, in turn owned by the Scott Trust.
Aptly, given the organisation Harding leads, which pushes the concept of “slow news”, he may have a laborious fight ahead.
Tortoise’s proposal, announced last week, has been opposed by Observer journalists, with the union chapel criticising what it called the “betrayal of the Scott Trust’s commitment to the Observer as part of the Guardian News and Media family”.
A strike could make it difficult for Harding to close the deal, which aims to bring together the digital savvy of Tortoise with the Observer brand and its heritage for quality, long-form journalism that once made it an essential Sunday read for many in the UK.
It is just one of several deals that, if successful, promise to reshape British media in its biggest overhaul in years. Bids for the Telegraph newspaper were due on Friday, while the right-leaning broadsheet’s former stablemate and the world’s oldest magazine, the Spectator, was bought by hedge fund boss Sir Paul Marshall this month for £100mn.
Tortoise’s Observer bid came in the same week as the Evening Standard printed its final paper ahead of a move to weekly-only editions with the new title, The London Standard. Douglas McCabe, media analyst at Enders, said that it heralded the next phase of a print newspaper market otherwise in structural decline.
“The Observer has felt like a premium news and culture magazine rather than an all-encompassing newspaper for some time, and that is an ideal proposition fit for Tortoise,” he said.
“That proposition is also the future of print, as industrial scale winds down over the next seven to 10 years, and the artisan print era takes over.”
Media executives and investors are hoping that they can add much loved but legacy brands to their digital operations.
Marshall and Harding have similar ambitions — even if the publications they have targeted traditionally sit on opposite ends of the political spectrum. Harding told the Financial Times (where he also once worked) that he wanted to recreate the sort of model that has turned around the fortunes of The Atlantic, a venerable magazine that was losing millions of dollars just a few years ago but turned profitable and registered more than 1mn subscribers in 2024 on the back of Pulitzer Prize-winning journalism.
In a market where artificial intelligence can quickly write — or rip off — breaking news, media analysts see the need for companies to create longer-form original content such as investigations and insight, or access to unusual situations and interesting people.
Media analyst Ian Whittaker said that Tortoise’s proposal was “both a vote of confidence in print, but also it is buying an asset that it can use as a tent pole brand to expand further including internationally”.
People familiar with the group’s thinking admit that a standalone print business is now hard to sustain, but said that the combination with Tortoise could bring together print and digital subscription bundles.
The strategy is similar to the future planned for the Spectator, where Freddie Sayers, the boss of Marshall’s UnHerd, which acquired the title, wants to impose the same sort of expertise in growing paid digital subscriptions and broadening its international readership to boost sales.
The difference is the price: while Marshall — who also co-owns the rightwing television channel GBNews — is paying a record £100mn for a magazine, Harding will not be paying a large upfront fee for the 233-year-old Observer, according to people close to the talks. Instead, he has committed £25mn over five years to support the title, giving the team and its journalism a guaranteed future.
But rival media executives say that the Observer is now several decades from its glory days when journalists were living in the shadow of some of its great writers such as George Orwell.
“For the Guardian,” said Whittaker, “the obvious question would be what else you could do with The Observer to develop it into its own brand. And the answer is: not much. Your focus will be on The Guardian. The Observer is a junior priority.”
Still, there were no current plans to close the Observer, according to people familiar with the Guardian’s strategy. That has not stopped journalists at the Observer feeling that the clear intent to focus on the core Guardian brand as part of a digital and international strategy has left the Sunday title — which focuses on the UK — at risk.
A Guardian spokesperson said “exclusive negotiations have only just begun” with Tortoise. The spokesperson added: “It is important to be transparent with staff because it is a potentially significant investment that needs to be looked at in detail. We are engaging with staff and welcome every opportunity for internal discussions on this.”
A person close to the Guardian management said that emotions were still high after a threat of closure as part of a strategic review of the newspaper in 2009, but that the current talks were about safeguarding its future. “They [the union chapel] have reached a foregone conclusion without knowing what the deal is.”
If the deal succeeds, Harding’s first job will be to revitalise the Observer brand as a home of globally relevant content, according to analysts and rival media executives. No decision has been made yet on branding, but one possibility is to retain Tortoise as more of a digital, podcast and events arm, according to people close to the process. Tortoise has made a number of hit podcasts such as Sweet Bobby and Londongrad.
Tortoise was likely to combine the newsrooms, the people added, and create a distinct digital presence for the Observer, whose journalism is currently posted under the Guardian banner on its website.
But the Observer’s weekly print run is also an attraction for its potential new owner, with Tortoise valuing a physical newspaper as a marketing tool and driver of subscriptions.
The Guardian does not break out the Observer accounts but the group reported an overall net operating cash outflow of £36.5mn in the year to March 2024.
The Guardian blamed a market slowdown in advertising and sustained structural pressures on print on the fall of 2.5 per cent in revenue to £257.8mn in its most recent accounts.
Meanwhile Tortoise recorded an operating loss of £4.6mn in 2022 — its last set of filed accounts — on turnover of £6.2mn. But it is raising money for the acquisition from current and new investors, with a first round of this investment already completed. Its backers include Lord David Thomson, chair of Thomson Reuters, and investment group Lansdowne Partners.
Harding will be under pressure to show that this combination of the old and the new media can create a profitable business. Harding told the FT that he wanted both a “powerful voice in the world as well as a profitable company”.
