It’s quite something to note that a company that lost $52 million last year had a very good year.
But so it is with The Guardian, which is unique among major news organizations because it’s effectively a trust-fund paper—owned by a company whose sole objective is not to make shareholders happy but to make sure The Guardian operates in perpetuity.
To that end, the company sold off assets last year at sky-high prices, tripling its nest egg to more than $1.4 billion, and it still has a few hundred million dollars worth of assets to sell. That alone would allow The Guardian to run $50 million deficits until at least 2045—even if its assets earned no interest.
It’s an enviable position to be in, and it has allowed the paper to experiment and invest aggressively in digital expansion across the globe.
The Guardian will always run at some sort of a loss because it has the rich endowment to fund it. As CEO Andrew Miller says, measly 5 percent returns on its cash and investments would kick off more than $70 million a year—plenty to fund big Guardian losses while reinvesting to keep the nest egg ahead of inflation.
But if it can grow its revenue substantially, it could fund that much more journalism.
And that’s what it did last year, impressively. The Guardian‘s total revenue jumped 7 percent, which is what counts as a giant gain these days in the newspaper industry. Its digital revenue soared 24 percent to $119 million. Critically, its print revenue, which is still two-thirds of all sales, stopped declining last year, remaining flat at just more than $240 million.
The question, as we noted in March, is how much The Guardian is spending to get that revenue.
While it lost $52 million, that’s down from a $58 million loss the year before. Meantime, its revenue was up about $23 million.That’s not a bad return, particularly for the early stages of an investment. But it’s unclear if the digital investment itself paid off or if losses were papered over, so to speak, by a blip in print fortunes.
The Guardian, using its preferred accounting measure, says its underlying losses were $33 million last year, a $12 million decline.
Regardless, with the paper’s enormous trust fund, fast-growing digital revenue, stabilized print paper, and its world-shaking journalism, The Guardian is in very, very good shape.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.