Wednesday, 29 July 2009

The Guardian's debt to GMG is carrying a statement explaining the purpose of the Guardian Media Group, ahead of its profit results in August.
The statement says: "The Guardian would not exist today if it had not been for the financial support of the broader Guardian Media Group.
"Over the past five years alone, GMG has invested more than £200m in GNM, funding projects such as the development of and the move to a state-of-the-art new home at Kings Place.
"GMG is a unique media owner in that it exists to enable the Scott Trust to achieve its core purpose of securing the ongoing financial and editorial independence of the Guardian."
Alan Rusbridger, editor-in-chief of the Guardian is quoted saying : "We would not be in this game were it not for GMG. There is a hurricane blowing through the media industry. One only has to look to America to see the devastating effect this is having on a lot of papers, which are either closing or going into chapter 11 bankruptcy protection.
"The fact that we have not been forced to take drastic action is largely because of the subsidy we have through the Scott Trust that is possible because of the success of GMG.
"We operate in an odd market where other companies also have subsidies. The Independent would not be here but for the subsidy from O'Reilly. The reason we can take the Times on head to head is because we have a subsidy that comes close to what Murdoch is prepared to spend."
The statement adds: "Despite the relative strength of GMG's financial position, all of its wholly owned businesses, including GNM, have been badly affected by a combination of the economic downturn and longer-term, structural changes in their markets – such as classified advertising moving to the web. Trader Media Group and Emap, while not immune to recession, have proved more resilient.
"Each of GMG's businesses is reducing costs significantly to cope with these challenging times. GMG's profits will be announced in August and will feature on our sustainability website."

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