Posted by
Dominic Ponsford
on 4 October 2010 at 10:16
Tags: B2B Magazines, Journalism, Magazines, Media Business, National Newspapers, New Media, Online
Stephen Glover today questions the long-term financial situation of Guardian Media Group following news last week that Trader Media Group has written £463m off the value of Auto Trader Magazine. GMG owns a 50.1 per cent stake in TMG.
The write-down gave TMG a £503.3m pre-tax loss for the year. But it should be noted, as the Telegraph reports, that TMG has been massively successful in migrating print revenues to digital. The TMG annual report states: “The large majority of TMG’s value now lies with Trader Digital. The impairment does not, therefore, reflect a fall in the actual or inherent value of TMG, but rather the transfer of value from publishing to digital.”
According to a GMG spokesman the write-down “has zero impact on the overall value of Trader Media Group”.
They told Press Gazette the accountancy rules stipulate that the value of the print business had to be written down, but they do not allow TMG to “write-up” the corresponding increase in value for the digital business.
Glover writes today in his media column for The Independent:
“Though GMG is very far from the edge, it may not have sufficient resources to prop up its heavily loss-making national newspaper operation ad-infinitum. The Guardian, Observer and guardian.co.uk are probably still losing around £30m a year, and it is difficult to see how even with the slight uplift in advertising revenue (up 13 per cent in the last three months year-on-year at the Mail titles) these losses can be much reduced without further cutbacks. (more…)