SINGAPORE: The Government is supportive of Singapore Press Holdings’ (SPH) proposal to restructure itself and transfer its media business to a not-for-profit entity, and is prepared to provide funding support, said the Ministry of Communications and Information (MCI) on Thursday (May 6).
SPH on Thursday announced the company’s plan, pending shareholder approval, to transfer its entire media-related business to a newly incorporated wholly owned subsidiary, SPH Media Holdings.
SPH will provide the initial resources and funding to capitalise SPH Media with a cash injection of S$80 million, S$30 million of SPH shares and SPH REIT units, and SPH's stakes in four of its digital media investments.
SPH Media will eventually be transferred to a not-for-profit entity for a nominal sum. This entity will be a newly formed public company limited by guarantee (CLG).
"It is in the interest of Singapore and Singaporeans that our local media continues to thrive and deliver quality journalism," said MCI in a media release.
"After SPH Media is transferred to a CLG, MCI is prepared to provide it with funding support to help it build capabilities for the future," it added.
Mainboard-listed SPH publishes national broadsheet The Straits Times as well as dailies in Chinese, Malay and Tamil, along with other print and digital products.
It also has businesses in property, purpose-built student accommodation, and aged care.
Despite total circulation holding steady, with digital circulation growing to offset the fall in print circulation, the profit margins of SPH's media business have narrowed considerably over the years, MCI said.
SPH’s obligations as a listed company will also constrain its ability to continue investing in the media business, given the adverse financial outlook for the industry, MCI added.
READ: SPH restructuring will balance 'conflicting' expectations of public, shareholders: Lee Boon Yang
In the statement, Minister for Communications and Information S Iswaran said that having a "professional, capable and respected local news media" is critical to Singapore's national interest.
“They report through a Singaporean lens, so that our citizens have a good understanding of the opportunities and challenges facing our country, the choices we need to make, and our place in the world.
“The Government therefore supports high quality, credible journalism in our local news media.”
The Government also agrees that SPH’s current media business model within a listed company structure is not viable, given global technology and industry trends, and the need for significant investments in digitalisation and capability development, Mr Iswaran said.
“Our goal is to help the local news media and our journalists adapt and thrive in the digital era while maintaining the high professional standards we expect and value. The Government is also prepared to provide SPH Media with funding support, with fiscal discipline and accountability for outcomes in areas like digital innovation and capability development, as part of a long-term sustainable business plan.
“This restructuring of SPH Media, and future government support for it, will help to strengthen SPH Media to continuing its important role in Singapore’s media scene.”
Mr Iswaran will deliver a ministerial statement on SPH’s restructuring when Parliament next sits on May 10.