Edition: December 2015 / February 2016


Brown hits the fan

Latest circulations show the PIC investment
to be curiouser and curiouser.

Surve . . . Karima calls

There’s nothing in the latest annual report of the Public Investment Corporation to indicate the extent of its exposure to Independent News & Media SA, or on the performance of this investment. But there’s plenty in the latest figures from Audit Bureau of Circulations, swathed in red ink, to suggest that the investment can’t be doing terribly well.

Only INMSA’s regional Zulu title Isolezwe is showing growth. By contrast, the circulations of its English-language flagships – the major metropolitan daily and weekly newspapers – are in accelerated decline. That’s the indelible industry trend.

It was entirely predictable two years ago when the PIC paid R500m for 25% of Iqbal Surve’s consortium to purchase INMSA. The PIC has subsequently elected not to divulge whether there is any further loan or other exposure as these, it said, touched on the confidential information of a private company (TT June-Aug).

In the PIC’s scheme of things, a half-billion rand here and there is small beer. But it does say something about PIC support for “developmental investments” that have an effect, however tiny in themselves but not necessarily when agglomerated, on annual increments to the benefits of Government Employees Pension Fund members. It also impacts, specifically and profoundly, on competition within the newspaper industry. Established titles are battling less to boost profitability than to contain losses. The axe is being taken to newsrooms, chopping editorial costs, with little regard to the consequences for content. They trust in vain that readers won’t notice and that advertisers will continue to support ambitious rate cards.

Here, for INMSA and the PIC investment, a ray of hope is articulated by INMSA group editorial director Karima Brown. She argues that government should place its advertisements in “balanced” newspapers that give it a “fair hearing”, not those which are constantly most critical of it. Simply put, switch to INMSA from Times Media Group.

She appears to assume many things: like similar meanings for “balanced” and “supportive”; like decisions being deflected without regard to reach and rates; like a trade-off between editorial and advertising without regard to credibility.

It does make sense for advertisers to avoid titles hostile to their products. From there, however, it’s a long stretch to allege that TMG papers don’t give government/ANC a fair hearing, if not quite so supine as sometimes in INMSA titles.

In any case, advertisements for public-sector jobs are neutral to their environments. The commercial upshot of Brown’s plea being heeded will be particularly detrimental to the Sunday Times where once the revenue from these ads roughly equated the newspaper’s profit.

The more that critical titles diminish, the more SA democracy diminishes. The PIC, which prides itself on shareholder activism, is a sufficiently large in INMSA to tell Brown and the public where it stands.


To illustrate some iconic titles’ circulations, ABCs for Q3 2015 against Q3 2014 show the Sunday Times at 338 542 copies (down 13,3%); Business Day 25 753 (down 16%), Cape Times 28 260 (down 9%) and The Star 73 746 (down 1,8%). The first two are in the Times Media stable, the latter two in the INMSA stable.

Taken over a longer period, circulation patterns look worse. In the few years to 2007, for instance, The Star was stable at some 169 000 copies (TT March-May).

Today an advertisement in all the INMSA English-language dailies, or all of its weeklies, would still be unable to compete on circulation with the Sunday Times alone.