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
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.