Scott Trust approves sale of The Observer to Tortoise Media

The Scott Trust has given the go-ahead for The Observer to be sold to Tortoise Media.

The decision was made at a meeting of the 12-person Scott Trust board at 9pm last night – as around 500 Guardian and Observer journalists neared the end of their two-day strike in protest at the move.

The Scott Trust has said it will take a stake in the new Tortoise/Observer company.

Tortoise Media has said it has £20m to invest in turning The Observer into a standalone print product with a paywalled website. It said it will reinvest a further £5m in the business, which is expected to come from profits over the next five years.

Many Observer insiders have deep misgivings about the deal and the future security of the 233-year-old title within a loss-making start-up company.

The 70 Observer journalists who will transfer across fear for their job security under Tortoise ownership and have other concerns around who is funding the deal and editorial independence.

Press Gazette understands the Guardian and Observer NUJ chapel will meet today to decide next steps and to agree whether or not to go ahead with a second planned two-day strike next week.

One insider said that a vote of no-confidence in editor Katharine Viner was being mooted.

Friday’s print edition of The Guardian was impacted by strike action with most stories bylined “Guardian staff” and “agencies”.

Full statement from Scott Trust to staff

Here is the full Guardian Media Group statement to staff from Scott Trust chair Ole Jacob Sunde:

“I wrote to you earlier this week to let you know that the Scott Trust has been reviewing the ownership structure for the Observer over the last few months. Earlier this week, I set out the criteria the Trust has been taking into account to reach a decision. I believe they have now been met.

“With that in mind, we have now in principle approved the sale of the Observer to Tortoise Media.

“These are the principles we were guided by during the negotiations:

• The Scott Trust to stay on as a part-owner of the Observer
• The Observer to have secure and sustainable, long-term funding
• Other owners of the title to take a long-term view of their investment
• All owners to embody the values of editorial independence, press freedoms and liberal journalism that have been part of the Observer’s ethos since we bought it in 1993
• The Observer to be governed by a mature board structure, with a role for the Scott Trust on the Tortoise Media editorial and commercial boards

“Collectively we have thought long and hard about this decision. We have listened to staff, many of whom we know hold strong views on the Observer’s ownership. Our priority has always been to make the best decision for the Observer and its staff, serve our readers, protect jobs and support teams so that the Guardian and the Observer can continue to promote liberal journalism and thrive in a changing media environment.

“As part of the deal, the Scott Trust will invest in Tortoise Media and become one of its largest shareholders. The Scott Trust will take a place on both the company’s board, chaired by Matthew Barzun, President Obama’s ambassador to the UK, and its independent editorial board, chaired by Sir Richard Lambert, the former editor of the Financial Times.

“There will be a £25m new investment in the Observer with a long-term commitment to print on a Sunday and a plan to build the Observer into a digital brand. And the Scott Trust will join new and existing investors who are committed for the long term.

“Tortoise Media has also committed to safeguard journalistic freedom and the editorial independence of the Observer, undertaking to honour the liberal values and journalistic standards of the Scott Trust in their editorial code.

“It is expected the deal will be signed in the coming days.

“We’re confident we have agreed the best possible way forward for staff, readers and the future of both titles. It is a model that will see investment in journalism, enshrines the Scott Trust’s values in the Observer’s future, and protects the Observer and Guardian’s ability to continue to produce trusted, liberal journalism.

“We recognise that for some of you this news will take time to process and will ensure everyone is fully supported through this transition. Details on how to get that support are at the end of this email. We will be meeting with Observer staff to talk through the details of the agreement this morning. Below is information about what this deal means for those who work for the Observer:

Observer staff

• The Observer will see an increased investment in its journalism as a result of the deal and pay and conditions will not be affected.
• We are offering the opportunity to apply for voluntary redundancy, for anyone who does not want to transfer to Tortoise Media. Observer staff who move to Tortoise will maintain those enhanced redundancy terms after the transaction has completed for a period to be determined.
• Observer staff who move to Tortoise Media would also have the opportunity to apply for “internal only” open roles at the Guardian for a period still being negotiated.
• Freelance contracts will be extended until the end of September 2025 and renegotiated at that point.

“Since “we were first approached by Tortoise, we have consulted extensively with colleagues, union representatives and external experts to examine the proposal and what this would mean for the Observer and staff who work for the title. There has been extensive due diligence and examination of business proposals. We have listened carefully to concerns, sought out different perspectives, and considered alternative models for the Observer’s future. And we think this is an exciting opportunity for the Observer.

“We have not received any credible alternative bids to date – we have had two separate approaches through lawyers with no substantive details. They were anonymous and then leaked to the press. Separately, Dale Vince has said he would be interested in the Observer only if there was a problem concluding the deal.

“We now believe this is the ownership model that best preserves Observer’s 233-year legacy, maintaining its position as the leading quality liberal Sunday paper.

“This is a new chapter in both titles’ histories and we will maintain our joint mission of championing independent journalism for years to come. By having the Scott Trust take a significant stake in the Observer, both papers will continue to uphold the core values that are so important to the future of liberal journalism – promoting a free press and a stringent commitment to editorial independence.

“There are various ways that you can reach out for support, raise concerns or ask questions.

• To book a meeting with a member of the managing editors team please email managing.editors@theguardian.com.
• You can speak to your line manager or a member of the senior leadership team in your department.
• You can get in touch with a member of the people team.

“All staff also have access to our employee assistance scheme. Full details of the support available are on Spike.”

The letter is signed by: Ole Jacob Sunde, chair of the Scott Trust, Charles Gurassa, chair of the Guardian Media Group, Kath Viner, editor-in-chief and Anna Bateson, GMG chief executive.

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