Government may terminate SPH Media Trust's funding if serious wrongdoings found

SINGAPORE: While the government has built in safeguards that allow it to conduct “ad-hoc audits” on SPH Media Trust (SMT), it has the right to terminate funding if serious wrongdoings are found, said Minister for Communications and Information Josephine Teo on Thursday (Jul 6). 

Mrs Teo was responding in parliament to questions from Members of Parliament (MPs) on updates to SMT’s review of overstated circulation numbers, which covers the period of September 2020 to March 2022.

The review, which was reported in early January, found that daily circulation numbers of SPH Media titles had been inflated by about 10 to 12 per cent of the reported daily average circulation.

The media company - which publishes news titles such as The Straits Times, the Business Times and Lianhe Zaobao - then tasked its audit and risk committee, with the help of legal advisers, to further investigate the inflated daily circulation numbers. 

In February last year, the government had announced that it would provide up to S$900 million in funding support for SMT over the next five years.

This came after SMT was hived off from Singapore Press Holdings (SPH) in 2021 to become a not-for-profit entity, amid the steep decline of print media and the migration to the digital space.

The direction that SMT is charting out is "promising", but significant investments are needed and it will likely be loss-making in the transition period, Mrs Teo said in February last year.  

The first tranche of funding was disbursed in March this year, Mrs Teo told the House on Thursday. The events in question preceded the period of funding, and no public funds had been involved, she said. 

Mrs Teo on Thursday also said that the Ministry of Communications and Information (MCI) is committed to working with SMT to overcome the challenges of disruption caused by readership moving online and succeed in its transformation plans.

The funding is mainly directed at three key areas: Technology upgrade, talent development, and sustaining the vernacular media. 

MEASURING ACCOUNTABILITY 

The funding agreement already contains measures to ensure accountability, said Mrs Teo in response to questions filed by Ms Tin Pei Ling (PAP-MacPherson) and Mr Zhulkarnain Abdul Rahim (PAP-Chua Chu Kang) on whether the government would impose additional safeguards. 

“For example, SMT is required to submit specific information on KPIs (key performance indicators), including methodologies and sources. These must be agreed upon and SMT is not allowed to change them without MCI’s consent,” she said. 

SMT’s KPI performance and financial statements must also be audited by independent external auditors, she added.

While the valuation of and improvements to internal processes are “clearly the responsibility” of SMT’s executive team, she said, the government will intervene in cases of misconduct or mismanagement of public funding. 

"If serious wrongdoings are found, we have the right to terminate funding," Mrs Teo added.

Responding to Ms Hany Soh's (PAP-Marsiling-Yew Tee) supplementary question on whether MCI is tracking how the incident has affected public confidence in SMT, Mrs Teo further outlined how accountability would be measured. 

“This accountability, in relation to funding, will include the extent to which SMT has been successful in its transformation, especially towards digital media. It will also be held accountable for maintaining trust,” she said. 

The government will rely on independent reports, such as those carried out by Reuters, but will also have its own studies to “confirm what these independent resources have established as findings”. 

Accountability to the public also includes improving governance within SMT, mainly by doing three things, added Mrs Teo. 

“It is to make sure that bad things don't happen again. It is to ensure that your systems for controls and contracting pricing … have to be cleaned up, made better.

“And the other aspect of governance that needs to be improved is also the culture. How people view these kinds of things and their willingness to tolerate them, or to speak against them.”

SMT is “well aware that it is one thing to tell people what the findings are”, said Mrs Teo. “It is quite another to commit to making improvements.” 

She also reminded the House that the circulation data issue had originally emerged because SMT was conducting its own review and due diligence following the transfer of the media business from SPH Limited in December 2021. 

“So the seriousness of this incident and its potential impact on the levels of trust that the public has in SMT and its titles is not lost on its board, as well as the management,” she said. 

GOVERNMENT WILL ASSIST SMT'S DIGITAL TRANSFORMATION 

As the bulk of the funding will be to ensure SMT’s digital transformation is successful, the government will continue to work with SMT to overcome the challenges caused by disruption. 

Mrs Teo highlighted the 2023 edition of the Reuters Institute Digital News Report released last month as a “timely reminder” why funding support for mainstream media remains necessary. 

The report found that trust levels in all SMT’s major titles remained “much higher than the global average”, with 73 per cent of respondents expressing trust in the Straits Times. This is up 3 percentage points from last year, she said. 

“Trusted news media made possible by quality journalism is a public good we cannot compromise on. It is more important than ever when the environment is full of disinformation and sensationalised news,” she added. 

“SMT can only deliver quality journalism if they can continue to strengthen their capabilities and reach audiences in the digital age.”

The same report by Reuters found that 22 per cent of respondents consume print news – a decrease from 53 per cent six years ago. 

SMT must thus “move decisively” into the online space, said Mrs Teo.

But she acknowledged that “the new competencies take time to build, and the economics of news media in the digital era do not make it easy for newsrooms to survive, let alone fund new investments”.

Addressing Mr Ang Wei Neng's (PAP-West Coast) supplementary question on whether circulation numbers are still part of the KPIs for SMT, Mrs Teo said circulation is "a metric that is no longer as relevant". 

Instead, reach is more important. 

"As media moves more and more online, it's not so much the circulation that matters. It's the reach. The reach measures how often people come into contact with the contents of a particular title," she said. 

The KPIs in the funding agreement therefore include "total reach and engagement of SMT’s full range of products, with a focus on their digital platforms", as the "whole purpose of funding SMT is to ensure that the digital transformation is successful". 

MCI will be reviewing the terms of the funding agreement, including the KPIs and amount of funding, at the mid-term juncture, and SMT’s ability to address these management issues will be taken into consideration.