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by yen223·1y ago·view on hn ↗
I was hoping this article went deeper into the Guardian's somewhat unusual ownership model, because I find it interesting and would love to learn more.

The Guardian is owned by (and I think largely funded by?) a trust that was intentionally set up in a way to ensure no commercial interest could interfere with the paper. How well it achieved that goal is, of course, debatable, but it has survived nearly a century in that form.

11 comments
Yes, The Scott Trust.

You can read more about it here:

https://www.theguardian.com/the-scott-trust

Here's how this happened as I understand it.

The original founder of the guardian, Taylor, ran it like a business. While today journalism struggles to make money, in the 1800s news was lucrative.

In his will, Taylor carved out a sweetheart deal (right of first refusal) to sell the paper to CP Scott, a progressive Liberal politician, and also his nephew.

After running the paper for many years, CP Scott's will named his two sons to inherit. Both of whom worked as editors on the daily.

In a freak turn of events, both CP Scott and one of the sons died within a few months. The remaining son was concerned about paying double for the hefty inheritance tax at the time ("death tax").

The death tax could be so large as to force a sale of the paper, to create liquidity to cover the tax. I guess it was a tax on unrealized gains!

The remaining son, John, cleverly found a workaround to avoid the silly death tax: by renouncing his ownership and transferring the business to a Trust. Since he worked at the paper as editor, giving up ownership was a clever tradoff that actually gave him de facto tenure as editor, by making his day job more stable.

This is all to say: the guardian became a nonprofit-like trust at a point in time it was already a stable business, with capital to self-finance.

This was not a case of a independently wealthy businessman creating a foundation to create a paper from scratch (like many created universities).

The Scott trust was created by journalists for journalists, at a unique point in time where journalists had money to self-finance. Motivated not by some idealistic vision but by a more practical desire to avoid a hefty tax on unrealized gains.

>found a workaround to avoid the silly death tax

I don't know if you're using the word "silly" sarcastically here, but if not, isn't this an example of this type of tax working exactly as intended? John still greatly benefited from his parents' work, and so did society at large to this very day.

"Death tax" alone is already a very loaded way to describe inheritance tax.

That said, having to pay inheritance tax twice over an organisation like this in a short span of time is rather unusual, and arguably, a bit "silly".

Silly is actually too nice a word for such extortion scheme. As you see if rich enough/business big enough, it could be easily circumvented. The little people without access to great lawyers and accountants got absolutely hammered when it got applied to them. But victorian England wasn't setup for little people in mind, it was all lords and wealthy businessmen ruling it all.

So similar to current situation in many places - if you are rich enough, you basically exist outside of tax system, be it capital gains, investments, inheritance etc. Obscure tax structures spanning whole globe as ie Panama papers showed. Its the middle class that gets hammered out of existence, ie in France its around 40% for inheritance tax, and trusts are AFAIK forbidden / treated very punitively. Very rich still bypass this and everybody knows this, everybody below not so much. Its not even effective there, the amount extracted yearly in such way is minuscule, but it pleases crowds with 'social justice' so they don't protest so much and burn more cars on streets.

>>> The Scott trust was created by journalists for journalists, at a unique point in time where journalists had money to self-finance

Where is the trust created by coders for coders at a time uniquely profitable for coders?

We build open-source trust-equivalents (foundations) with valuable intellectual property on the balance sheet instead of crude money.

However, is Mozilla a money oriented coder trust?

If you've had any experience with small trusts, they often get captured by self-interested people. The Scott Trust seems to stand out from others with its outcomes.

They exist? This is called FOSS and some outfits are even able to offer paid employment.
Honestly things like this can also be an argument FOR crazy high death taxes.

Something similar happened in a history podcast I heard about Porche, which is still owned by the original family. At one point, germany told them their tax on ownership gains is 90%. So instead, they decided they would just re-invest into the business R&D to write off the taxes instead. That gave us the invention of Porche's Racing team. source: https://www.acquired.fm/episodes/porsche-with-doug-demuro

> While today journalism struggles to make money

It rather depends on what you mean by journalism. I suspect your definition is true to the Guardian's apparent aims, publishing well researched truths to an interested population. What was being published in the 1800s was most certainly not that; instead, being very similar to the current forms of "opinion journalism" that are exceptionally lucrative today.

> I guess it was a tax on unrealized gains!

Inheritance taxes invariably are. The recent UK controversy around farm land inheritance was the same.

A death tax is a tax on death. It's not that. It's a birth windfall wealth tax.
"Death Tax"? What the heck are you on about? The dead aren't taxed, they can't, they are dead. What are you going to do to them as punishment if they fail to comply? Shoot the corpse?

It's a tax levied on those who get a completely free/undeserved sudden windfall; in the sense that they did not do anything to obtain it and didn't even have to expose risk or pay for a chance.

Most nations put pretty serious taxes on earnings from lotteries, and an inheritance is like a lottery where you didn't even have to pay for a ticket.

There's no obvious objective truth about the idea of taxing inheritance. But calling it "silly death tax" is, oof. Idiotic. Cut it out.

In a post about why it's good thing to have a paper that's not owned by the super wealthy, you insist on using the term "death tax" - a right-wing pejorative - instead of just sticking with inheritance tax.

The incongruity of this never crossed your mind?

Fascinating!

(I do find some irony in the fact that a majority of Guardian readers these days would abhor attempts by rich businessmen to dodge taxes.)

> This is all to say: the guardian became a nonprofit-like trust at a point in time it was already a stable business, with capital to self-finance.

The same kind of logic was applied to two french newspapers:

- Le canard enchaîné, created in 1915, specific status preventing sale of capital made in 1958. Motive was foiling an attempted takeover by another company.

- Mediapart, created in 2004, trust made in 2019. They made the change deliberately in order to protect the newspaper's future.

Both newspapers are doing well today, so I'm not sure this kind of thing is a product of its time and impossible to copy nowadays. However, both newspapers are producing quality investigative journalism, which most news media don't these days.

And of course, there's always wikipedia:

https://en.wikipedia.org/wiki/Scott_Trust_Limited

Bozo could easily establish a similar trust to support the Wash Post in perpetuity. But clearly he has other motives.

For more on how this model might have changed journalism for the better, this is a great old article from the former CIO of the Yale Endowment: https://www.nytimes.com/2009/01/28/opinion/28swensen.html
Yes, partially created to save taxes or a forced sale.
I’m not sure that it’s ownership is the reason for The Guardians success. NYT has also been successful with a more traditional ownership model.

Their success, I suspect, is due to being early to shift from addressing a particular geographic market, to addressing an ideological market, after the internet destroyed the geographical barriers to entry.

I suspect this internet driven incentive to focus on ideological markets is a big part of why politics in most countries has become so partisan. When newspapers focused on a particular geography, but had limited completion, they had an incentive to avoid becoming partisan because that would only serve to limit their addressable market.

I think a big part of it is that the internet made the existing leaders into massive winners, a bit like how the teams at the top if the first division managed to cement themselves in the premiership when that happened.

If you were to name some important newspapers in 1995, you'd probably also have the Guardian, NYT, WaPo, on your list. They just pulled away from the pack due to the was reputation works in the internet age.

And yet the LA Times and the (London) Times and the Chicago Tribune did not, so however true this is, it took some extra magic sauce to "pull away from the pack". It wasn't just "being an important newspaper in 1995".
The guardian always addressed a left of centre audience even before the internet. The Telegraph a right of centre one. The print advert market used to sustain that.
UK press has basically always been partisan, which was why the Daily Mail was publishing pro-Hitler articles on behalf of its owner.

https://en.wikipedia.org/wiki/Harold_Harmsworth,_1st_Viscoun...

Or The Guardian supporting the Confederacy[1].

[1]: https://en.wikipedia.org/wiki/The_Guardian#History

Yup; it's a different legal structure (the IT one is a CLG), but same intent. I think there are a few other similar things around.
The Scott Trust model is fascinating and doesn't get nearly enough attention, especially given how rare that kind of structure is in modern media
The Guardian is fairly protected from commercial influence but its not that well protected against elitism, which unfortunately still means a lot in the UK today.

This is why the Guardian is simultaneously "progressive", yet also at times openly hostile to the working class. Its "progressive but not working class" stance promotes identity politics, and probably does more to pit left-wing voters against each other than any other UK-publication.

That said, I am a subscribe to the Guardian Weekly which I supplement with the Spectator, a traditionally conservative publication, in order to get a decent balance of UK news.

I believe I am right in saying that every editor of the Guardian has been privately educated, apart from the last one.
Yes, and private education is a prime example of an area where the Guardian "inexplicably" pulls their punches.
I never really looked into the details but i believe Le Monde Diplomatique is built a similar way with their foundation Les Amis du Monde Diplomatique
Not journalism but I think Ikea and Rolex are owned by some trusts, too.
Ikea trust is more of a shell game to keep the family in charge while avoiding tax and general scrutiny and liability.
In Denmark it is not too uncommon for the larger companies, JP/Politikens Hus which publishes two of the largest Danish newspapers is trust owned. Novo Nordisk and Mærsk which are the two largest danish companies are trust owned as well.
And Bosch.

Edit: Scratch that. Bosch is owned by a foundation.

The Ikea Trust is for the benefit of the family that controls it.
ok ya'll talked me into it, I'll setup a recurring donation
Yeah right. And pigs just flew past my window. Because billionaires definitely don't pre-hide their fingerprints in some shady 'independent trust' while we all pretend the article just wrote itself out of the goodness of corporate hearts.
> to ensure no commercial interest could interfere with the paper.

How do they explain their taking ads, then? https://advertising.theguardian.com

There's zero assurance that they could provide that would convince me this doesn't come with influence over editorial matters. It's the same problem NPR has (shoutout to the 'old "National Petroleum Radio" moniker from the invasions of the oughts).

EDIT: you -> they

Well theres not going to be shareholder direction to conform to advertisers wishes.

And assuming the trust is well funded, they may not feel compelled to do so.

That said, its very possible for not for profit entities to go very wrong so you cant rule it out absolutely.

Fair enough, the trust is certainly a stronger demonstration of commitment than most can offer.
Universities with large endowments still charge tuition. The available proceeds from appreciation of the trust may not be enough to cover their operating expenses.
Universities aren't exactly a great model of freedom from private interests. And it's not clear why many of them do still charge tuition—i just assumed it was some effort to emphasize classism in a world where they also want to look gracious for paying for poor people.

And believe me, for the colleges I examined this at, tuition was a rounding error compared to the return on the endowment. It is just for aesthetics of charging students in a uniquely american show of stupidity.

The paper is required to operate on a commercial basis, but the trust ensures that they can always afford to say "no" to anyone trying to influence editorial matters, and indeed The Guardian has operated at significant losses at times.
yes it's a bit dodgy. the guardian operates as a sort of propaganda magazine although it tends to have fairly high quality stuff scattered in there.
A propaganda machine? It's an openly center-left newspaper.
It's rarely "center-left", more clearly left-wing.

Anyway, the very clear ideological orientation, even openly so, is what makes it a "propaganda magazine" of sort (like all ideologically orientated newspapers). I find it very similar to the Daily Mail on the other side of the spectrum, actually. I think the readership is more educated on average so it is more "intellectual" but overall it is the same type of highly orientated take on things.

Interesting that articles from The Guardian appear so often here ;)

Edit: It's saddening that this apparently cannot be said or discussed. Or is it a superiority complex because I compared it to the Daily Mail? (Oh dear, what have I done ;) )