SINGAPORE: Mediacorp has entered into an agreement with Singapore Press Holdings (SPH) to buy its minority shareholdings in Mediacorp’s entertainment television and newspaper businesses, both companies announced in a joint news release on Friday (Aug 25).
The purchase, valued at S$18 million, will involve Mediacorp buying SPH’s 20 per cent stake in Mediacorp TV Holdings, which owns Channels 5, 8 and U and Mediacorp Studios; and 40 per cent stake in Mediacorp Press, which operates TODAY newspaper.
The deal, signed on Friday, is subject to regulatory approval and scheduled for the end of September 2017. Once completed, both entities will become wholly owned subsidiaries of Mediacorp.
The agreement comes 12 years after SPH purchased the stakes as part of a media industry asset consolidation in 2005. During the consolidation, SPH transferred a TV channel to Mediacorp and took a 20 per cent stake in Mediacorp TV Holdings. SPH merged its free newspaper STREATS with TODAY, and invested in a 40 per cent stake of Mediacorp Press.
TODAY’S LAST PRINT EDITION WILL BE END-SEPTEMBER
In a separate news release, Mediacorp announced that TODAY newspaper will discontinue its print edition and become the first newspaper in Singapore to pivot to a fully digital future.
The last print edition of TODAY will go out at end-September.
With full ownership and control of Mediacorp Press, Mediacorp said it will restructure the TODAY business to better face the new digital-first media landscape.
“Reputed for its journalistic excellence, TODAY has recently been gaining recognition for its digital initiatives,” Mediacorp said in its news release. “TODAY started preparing for its strategic digital pivot three years ago, while staying focused on producing quality content. In April 2017, TODAY launched a fully digital weekend edition. Recognising that readers increasingly want their news on the go and encouraged by the growth in engagement, Mediacorp is taking the next step, turning the weekday editions fully digital too.”
“As advertising revenues follow audiences to digital platforms, Mediacorp has also strengthened its commercial offerings to enable advertisers to reach their clients digitally. These offerings, together with Mediacorp’s TV and radio platforms, offer clients integrated multi-platform marketing solutions.”
Mediacorp editor-in-chief Walter Fernandez added: “Faced with an increasingly digital-first landscape, we have been preparing for this strategic pivot. Newsroom processes have been re-engineered so that all reporters file for digital first, there has been a conscious investment in video capabilities, our social media following has grown aggressively, our digital editions have been refreshed and we’ve even started delivering content via WhatsApp."
"We have also earned a reputation for editorial excellence, winning some 20 international and local awards for reporting, visual journalism, as well as for our digital initiatives in recent years. Readers have noticed. There is no shortage of readers who want quality journalism delivered to their mobile phones, tablets and desktops. And our promise to them is that we will double down on our commitment to quality,” he said.
The discontinuation of TODAY’s print edition will mean that about 40 roles become redundant, the media giant said. Mediacorp said it will explore options to redeploy the staff members in these positions to other roles within the company. Where this is not possible, eligible staff member will be offered severance packages and outplacement support.
Mediacorp said it thanks all staff members of the TODAY team for their contributions.
Mr Desmond Choo, advisor to the Singapore Union of Broadcasting Employees said the union will be working closely with Mediacorp and its members to ensure affected workers are reskilled and redeployed.
"For those who are unable to be redeployed, the Union will help them with job placement assistance together with NTUC's e2i (Employment and Employability Institute). We will also ensure that our affected union members receive fair severance package," he said. "Our union leaders and industrial relations officers are on hand to help affected workers during these difficult and uncertain times," he added.
DIVESTMENT ALLOWS SPH TO "FOCUS ON CORE MEDIA BUSINESS"
In a media release on the Singapore Exchange website, Mr Ng Yat Chung, executive director and CEO-designate of SPH said that the divestment of its stake in TODAY follows Mediacorp's decision to turn it into a fully digital product.
Mr Ng also noted that free-to-air television was not core to SPH's business, adding that the proposed divestment "would allow SPH to focus on its core media business".
"This rationalisation will allow us to focus our energies on serving our audience and advertisers best through a suite of strong media products across the print, digital and radio platforms," he said.
SPH added that it expects to record a write-down of approximately S$31 million in its books. It also said the divestment is not expected to have a material effect on the net tangible assets per share or earnings per share of SPH for the current financial year ending Aug 31, 2017.
Said outgoing SPH CEO Alan Chan: "We have recouped our investment in Mediacorp Press Ltd and Mediacorp TV Holdings Pte Ltd, after taking into account the consideration of $18 million which we will receive from this transaction and the dividends paid to us over the years."
For a period of five years after the completion of the deal, Mediacorp Press will not be able to publish or circulate soft copy or online formats of TODAY newspaper that maintain the look and feel of a hard copy version of the newspaper.