Running with the Hares: Why The Guardian’s Observer Sale to Tortoise Will End in Tears

Today is The Observer’s 233rd birthday, but instead of celebrating, staff at the world’s oldest Sunday newspaper and colleagues from its sister title, The Guardian, are staging their first strike in 50 years. The catalyst for the 48-hour walkout is the proposed takeover of The Observer by Tortoise, the ‘slow-news’ startup founded by former Times editor and ex-head of BBC News, James Harding.

News of Tortoise’s plan to pick up The Observer emerged in September when the Scott Trust announced that it had begun formal negotiations over a sale. In October, National Union of Journalists (NUJ) members passed a motion saying the plan would be a “betrayal” of the Scott Trust’s commitment to The Observer. Staff opposed to the proposal are concerned that Tortoise is loss-making, proposes a minimal investment (£25 million over five years), and appears to be the only bidder being seriously considered.

Last week, Dale Vince, the founder of green energy supplier Ecotricity, expressed interest in acquiring The Observer but Guardian Media Group said it had received no bids “containing any substantive detail” other than Tortoise’s proposal.

Five former editors and one former editor-in-chief of The Observer have urged the Scott Trust to pause the sale. Paul Webster, who departed as Observer editor in November, joined fellow former Observer editors Roger Alton, John Mulholland, Will Hutton, and Jonathan Fenby in signing a letter protesting the new ownership plan. They were joined by former Guardian and Observer editor-in-chief Alan Rusbridger. That ad-hoc editorial board starkly laid out the disparity between Tortoise’s financial performance and The Observer’s position:

The ex-editors argue that there should be further discussions about a future for the Observer under its present ownership and that only if those fail should there be a three-month period seeking competing offers for the title. Tortoise has lost more than £16m since it launched in 2019.

The problem putting aside “certain shared costs with the Guardian” is that skates over major financial issues for The Observer. Guardian Media Group argues that the Sunday paper is loss-making when you take them into account. But it’s also a problem for the Tortoise bid. After almost 32 years under The Scott Trust’s ownership — it purchased The Observer to prevent it from being snapped up by The Independent and subsumed into The Independent on Sunday — The Observer doesn’t truly exist as a separate entity.

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While The Observer has a distinct editorial team, its digital presence is intrinsically linked to The Guardian. You have to look very carefully to notice that a news story or feature came from The Observer when you’re reading online. In print, The Guardian and The Observer stopped making their ABC circulation figures public in 2021, which makes it hard to quantify the Sunday title’s contribution. Press Gazette estimates that The Observer’s average print readership is somewhere around 80,000 a week. If it’s right, that makes it hard to argue for a separate newsroom.

Harding presented his ‘vision’ for the future of The Observer to staff at the paper last month. He suggested he wants to launch a paywalled website and keep the print newspaper alive, investing in new business and sports departments. The plan to build a healthy subscription model for the paper would be an attempt to emulate The Atlantic in the US and The Spectator in the UK. While Tortoise has long been loss-making, it forecasts that it will make a profit in 2025 and Harding claims he could make The Observer profitable by 2029.

Harding told The Sunday Times that the Observer bid was not an attempt to secure more investment for Tortoise but that “the reason for doing it… is seeing [the title] fade away, and thinking, ‘Actually, we can really turn it around.’” On the opposite side of the argument, Observer writer Carole Cadwalladr called the bid “an existential threat to our journalism”.

The reality of the Tortoise plan is this: It’s not promising nearly enough money to successfully separate The Observer from The Guardian and build it up as a stand-alone product. £25m will evaporate like early morning dew. To unpick its reliance on The Guardian, the new Observer would be more like £100m to even get started as a true competitor. However, the actual conditions of the sale to Tortoise look to be even more complicated.

Scott Trust chair Ole Jacob Sunde has written a letter to staff in which he makes new promises about the future of The Observer. In it, he writes:

The Scott Trust also says there will be a time-limited voluntary redundancy scheme for staff who don’t want to transfer to Tortoise Media and those that do will also be able to apply for ‘internal only’ open roles at The Guardian for a period.

Having the Scott Trust remain as a part-owner of The Observer would be in the interests of Tortoise because it would almost certainly lead to a non-aggression pact preventing The Guardian switching to a seven-day operation or turning its Saturday edition into a bulked-up competitor to the FT Weekend.

While I hope the strike action is successful, it seems likely that the Tortoise deal will be pushed through. I don’t believe Harding’s claim that he can make The Observer into a subscription-based success. Decoupled from The Guardian, the paper will be a zombie brand, disconnected from any remaining readership loyalty. While the title is already a declining print prospect, Tortoise taking over will hasten that. I’d like to be proved wrong, but I suspect I won’t be.

This column was first published in Mic Wright’s Conquest of the Useless Substack