Who guards the Guardian?

On Monday the newspaper group celebrated the 25th anniversary of the launch of its influential media

Guardian staff have an intriguing nickname for the centre of the newsroom in their imposing, new £100m headquarters in King’s Cross, north London. They call the cluster of desks, where the half-dozen top editors sit, “the knuckleduster”. It is a surprising name for an organisation with ambitions to “uphold values of decency, honesty and public service” and become “the world’s leading liberal voice”.

But the idea of a knuckleduster at the heart of the Guardian is oddly appropriate. A growing number of other media companies are asking questions about how the paper and its parent company, Guardian Media Group (GMG), are using their editorial and corporate influence. These critics include not only the Independent, which has become increasingly angry about its rival, but also senior figures at Channel 4 and ITV.

While they each have specific grievances, two themes emerge. First, they are unhappy about how their activities are sometimes reported by the Guardian and its MediaGuardian website, which, thanks to huge investment and a large staff of 16, is acknowledged as the bulletin board of the media industry. Second, they feel that GMG, which is overseen by the not-for-profit Scott Trust, has become more ambitious in recent years – expanding into multimedia, radio, film and video, trade conferences and business-to-business publishing. Some go so far as to argue that this empire-building is influencing its editorial world-view – that the paper is becoming less sympathetic, even chilly, towards organisations that once might have been considered “fellow-travellers”, such as Channel 4 and the BBC. This view is shared by some inside GMG who see how the Guardian editor-in-chief, Alan Rusbridger, has taken away some of the independence of its own Sunday stablemate, the Observer, to make it part of an enlarged Guar­dian seven-day-a-week news operation.

Critics of the Guardian concede that their complaints can seem like whingeing, and stress that they admire much about GMG and its commitment to journalism. Indeed, it is a tribute to MediaGuardian, which celebrated its 25th anniversary as a print supplement on 18 May, that it is so influential. But those on the receiving end of its coverage also argue that it can seem unbalanced when, unsurprisingly, the Guardian does not subject its own organisation to such scrutiny.

Simon Kelner, managing director of the Independent, points out that MediaGuardian has dwelled at length on redundancies and losses made by his paper while, in his view, giving scant coverage to the 50 job losses at the Guardian or 245 redundancies at GMG’s regional papers. Channel 4 and ITV declined to comment on the record but feel they have experienced the same treatment as the Indie. The Guardian counters that it reports far more about its own company’s problems than probably any other newspaper would. And arguably the troubles facing the Indie, for example, are graver. Steve Busfield, who is in charge of media coverage across the Guardian and Observer, says: “If the site is rubbing executives up the wrong way, then we are probably doing a good job.”

It is true that GMG faces painful decisions of its own about staff numbers and budgets. The problem is unusual because the Scott Trust has a mandate to safeguard the Guardian “in perpetuity”. This means there is a tension at the heart of GMG. Guardian News and Media (GNM), publisher of the Guardian and the Observer, lost £26.4m last year but has so far been immune to compulsory redundancies. Other parts of GMG, some of which are profitable, are having to axe staff.

In this context, the Guardian’s reporting of others’ difficulties has jarred with some readers. A recent media supplement cover story about the problems at the Indie, by a former staffer, provoked strong reaction. “It strikes me that the Guardian is currently compromising its integrity on an almost daily basis to discredit a commercial competitor,” wrote one reader – a posting which, it should be noted, MediaGuardian was happy to publish. Another reader, an anonymous Indie journalist, complained: “I look around and see a lot of talented, liberal journalists and see them being knocked by a load of other talented, liberal journalists and can’t quite bury the hypocrisy.”

The view that the Guardian appears to spend too much time on the problems of other media organisations, particularly liberal ones, is shared surprisingly widely. Kelner says MediaGuardian’s coverage of the Indie has been conducted with “great relish”, pointing out that his papers are on course to lose £8m-£10m this year while GNM is likely to lose three or four times that amount. Roger Alton, editor of the Indie
and former editor of the Observer, describes the coverage as “demented”, complaining of inaccuracies. “They seem obsessed by what goes on at the Independent,” he says. “I feel if I broke my pencil it would get into MediaGuardian.”

Others – including some journalists at the New Statesman – talk of a “slight undertone of glee”. From boardroom to programme-commissioning level, Channel 4 and ITV staff say they feel the Guardian has become more eager to criticise and can be snobbish. “I think the Guardian used to see us once as fellow-travellers,” says a Channel 4 source. “Now they seem to think of us as a commercial beast when they are guilty of the same thing. I struggle to think of the last joint investigation we did.”

Most media organisations are notoriously oversensitive about press criticism, of course. The woes facing these firms have been well documented beyond the Guardian. And MediaGuardian is bound to cause upset sometimes. In the past, the Daily Telegraph and Daily Mail have registered their anger. But it is also understandable that media companies are sensitive in a recession, which is happening just as business models are collapsing in the rush to the internet.

This brings us to GMG’s ambitions – and the suggestion that they could influence the Guardian. Kelner is adamant: “The Guardian as an organisation proclaims the highest ethical values, but it is quite clear that they have used their media website purposely to damage their biggest commercial rival. Nothing could be further from the avowed aims of the Scott Trust, and I am compiling evidence of unsourced, biased and irresponsible journalism on the website to supply to the trust. Those who work in newspapers are aware that MediaGuardian is contaminated by the commercial values of GMG. The problem is that the wider media industry, particularly the advertising community, regard it as an objective and authoritative site when, of course, it is anything but.”

Kelner cites the example of a MediaGuardian news story from 2007 which claimed the Indie was considering the dramatic step of going free. “There was not a shred of evidence,” he says. He believes the story did serious damage with advertisers who, even two years later, ask him about it.

Busfield takes exception to the suggestion that his media reporting is skewed. “We are given total editorial freedom to write about what we think is important. The people we report on are also our readers. We risk alienating them at our peril. We have to be objective, and I think we are.” It is also worth pointing out that MediaGuardian has broken other stories about the Indie that were denied but turned out to be accurate.

Other media organisations don’t go as far as Kelner, but one senior figure, who sits on the board of a major company, says: “I think they [the Guardian] are not immune to the possibility that the objectives of the Guardian Media Group as a whole are influencing the attitudes and tone of their journalists.”

There is no question that Guardian management sees itself in a changed light – as a multimedia “public service” news provider rather just a newspaper. That is clear from GMG’s recent submission to Lord Carter’s Digital Britain report, in which it decries the “aggressively expansionist BBC” and opposes a tie-up between Channel 4 and the BBC’s commercial arm, BBC Worldwide. GMG has also signalled that it would be interested in applying for public funding, such as a slice of the licence fee. This attitude fits in with the wider perception that GMG has become more ambitious under Carolyn McCall, chief executive since 2006. That GMG moved last autumn into sparkling rented offices at King’s Place – full of well-appointed conference rooms and with Paul Smith fabrics in the canteen – reinforces this notion.

McCall herself is well regarded (she has been a director of Tesco and Lloyds Bank) and has helped reposition GMG – selling a 49.9 per cent stake in its Auto Trader business at the top of the market in 2007 for £675m to the private equity firm Apax, using some of that money to buy a share in Emap’s trade magazines such as Broadcast and Nursing Times last year, with Apax, for £1bn. But, with hindsight, that may have been a high price. GMG’s other businesses, such as radio and its regional papers, are also feeling the squeeze. Meanwhile GNM, like many other national newspaper groups, continues to lose money – probably in excess of 2008’s £26.4m.

Last year’s losses were technically worse. There was a further one-off write-down of £46.6m, partly as GNM had to slash the value of its £80m printing presses, built just three years earlier for the unique “Berliner”-sized Guardian. GNM appears to recognise that such losses are not sustainable: it has just ordered £10m of editorial budget cuts. This split personality – the editorially autonomous Guardian and the commercially ambitious rest of GMG – does raise awkward issues. The Guardian has campaigned against offshore tax avoidance by companies such as Tesco; but GMG has set up tax-avoidance structures with Apax in the Cayman Islands and Luxembourg.

These tensions aside, it makes sense for the Guardian to carve out a role as a multimedia publisher. And GMG is perfectly entitled to criticise the BBC or Channel 4. What is of concern to some is that the views of Guardian columnists and editorials sometimes seem to coincide closely with those of GMG. Executives at Channel 4 and ITV repeatedly cited the columnist Emily Bell as someone who, in their view, is conflicted – because she is also the Guardian’s director of digital content, and has a seat on the GNM board. Indeed, Bell made a private presentation on behalf of GMG to Carter and his team early this month. She says she is transparent about her roles and does not “parrot” the GMG line.

It is important not to exaggerate the anxiety about the Guardian and GMG. As one senior media figure points out: “One should not get paranoid. In many respects the Guardian does a good job.” Indeed, all of the executives interviewed for this article recognise it is right that they face media scrutiny. But given that one newspaper has such a dominant role, they think it only fair to ask: who guards the Guardian?

Gideon Spanier is business and media correspondent of the London Evening Standard