Guardian Australia struggles to make a profit

Malcolm Turnbull might feel chuffed about his role in establishing The Guardian here, but the news site has struggled to turn a profit.

Former prime minister Malcolm Turnbull. Picture: AAP

Millionaire former prime minister Malcolm Turnbull might feel chuffed about his newly revealed role in establishing The Guardian in Australia, but the left-wing news site has struggled since day one to turn a profit.

Since its first digital edition at the end of May 2013, thanks to the financial backing of entrepreneur Graeme Wood, founder of travel website wotif, The Guardian Australia has notched up $26.m in total losses over its seven years of operation.

An analysis by Media of the ­financial results of the media outlet’s local company GNM Australia since 2013 financial year reveal the now Lenore Taylor-led ­masthead has managed to grow sales revenue each year since it began for total sales receipts of $62m.

However, profit has been much harder to come by, with GNM recording a loss in four out of its seven years.

The local group’s first financial accounts noted Mr Wood’s initial financial support was provided as “an arm’s-length relationship, having no say in editorial matters or operational decisions”.

Accounts reveal that in its first full year of operations The Guardian Australia generated sales revenue of $3.8m, but a net loss of $6.1m.

Taylor wrote on her online news site recently about how the local edition had come to pass, confirming that Mr Turnbull had a hand in the media outlet’s creation, but she also said “The Guardian Australia owes Malcolm Turnbull thanks — but not favours.”

The former Goldman Sachs investment banker’s role was revealed in his highly anticipated memoir, A Bigger Picture, published by Hardie Grant.

“I suggested to Alan Rusbridger, editor of the UK’s Guardian, that he should establish an Australian edition … we exchanged some rough numbers and he concluded he’d need $20m of underwriting for three years,” Mr Turnbull wrote.

Mr Turnbull wrote that he brokered the $20m deal between Rusbridger and Mr Wood, who was on “the political left” and had been a generous donor to the Greens.

Mr Turnbull did not provide seed funding to The Guardian Australia.

Rather, it is only thanks to the financial support of its British controlling parent, The Scott Trust, that the left-leaning publication has been able to survive.

Lending to the trust’s antipodean publishing offshoot peaked in the 2016 financial year, when borrowings were as high as $32m. In 2018 it had to be repaid, with The Scott Trust swapping its debt for $34m in fresh equity in the local operation, which since July 2018 has been run by managing director Daniel Stinton.

Mr Stinton joined from billionaire Kerry Stokes’s Seven West Media, where he was head of digital. The capital injection from Britain boosted GNM’s cash balance to about $16m by the end of the 2019 financial year.

GNM Australia has a March 31 balance date to match its British parent, with its results for the 12 months to the end of March this year expected to be lodged at the end of July.