Stay informed with free updates
Simply sign up to the Media myFT Digest — delivered directly to your inbox.
Digital start-up Tortoise Media has finalised an agreement to buy the Observer, the 233-year-old Sunday newspaper, despite weeks of staff upset over the deal.
The Guardian Media Group (GMG) on Wednesday said it had signed a deal to sell the newspaper, leaving its owner, the Scott Trust, with a 9 per cent stake in Tortoise Media.
The Scott Trust will also commit £5mn into Tortoise Media as part of a wider £25mn investment from Tortoise to revitalise the British title.
Observer deputy editor Lucy Rock has been appointed print editor of the newspaper, with a digital editor set to be chosen to build the Observer online brand. James Harding, Tortoise co-founder, will be editor-in-chief.
The deal, struck in cash and shares, will include a five-year commercial agreement with GMG, under which Tortoise will pay for both print and distribution services, as well as marketing through the Guardian.
Tortoise will combine the Observer with its digital newsroom to build a daily digital news brand that will include podcasts, videos, newsletters and a website that is expected to be behind a new paywall.
The first Observer under Tortoise ownership is expected to be published in the spring, Tortoise said.
Tortoise said that it would build a daily digital Observer in “arts, ideas and news as well as the Observer’s own network of foreign reporters and contributing editors, a new business and economics team, expanded science, technology and health coverage and a dedicated sports desk”.
The Scott Trust will take a seat on Tortoise’s commercial board, chaired by Matthew Barzun — who was US ambassador to the UK during Barack Obama’s presidency — and a seat on the editorial board, chaired by Sir Richard Lambert, a former editor of the Financial Times.
The deal comes after four days of strikes this month by staff in protest over the sale. Journalists at the Guardian and Observer are worried about the financial future of the newspaper under the lossmaking media group.
Staff were also angered that GMG did not take rival offers more seriously, although only Dale Vince, the green energy tycoon and Labour party donor, revealed an interest. The Guardian’s union is expected to meet again on Thursday to discuss its next move.
Tortoise Media has committed to protect the liberal values and editorial independence of the Observer.
Ole Jacob Sunde, chair of the Scott Trust, said: “This deal secures fresh investment and ideas for the Observer that will take the title to new audiences and enhance the role liberal journalism plays in our society.”