In the next few weeks, a decision will be taken that will most likely change the face of South African newspaper ownership for some time to come. After years of bleeding the South African operation of Independent News and Media (INM-SA) dry, its Irish owners look set to sell it to a local bidder.
Potentially, this is good news for journalism and media transformation. INM-SA has seen some of the most vicious cost-cutting in recent journalism history, leading to mass retrenchments, downsizing of key aspects of the business and centralisation of newsroom functions, resulting in less news diversity within its stable of more than 30 newspapers.
A sale to a South African group could lead to greater re-investment in the most important but neglected aspect of INM-SA’s business, namely journalism. According to Business Report journalist Ann Crotty, the group’s Irish owners made an estimated operating profit of R4.5 billion out of INM-SA since they delisted in 1999, on a total investment of around R50 million: a return that borders on the rapacious.
The Irish owners are desperate to sell as they have run up a sizeable debt. It is not clear who the final bidders are likely to be, but some politically connected black empowerment groups have been mentioned.
There is no doubt that the company needs to ‘come home’. But the main question is who would constitute an appropriate buyer, as the acquisition is politically sensitive.
The very real danger of the current moment is that pressures on the newspaper industry to transform may lead to sections of the press that do come up for sale being acquired by competing factions of the ANC. This in turn could lead to the press becoming caught up in the very power struggles that imperil the party, and that now cripple the state broadcaster.
Potentially, INM-SA could provide a politician with post-Mangaung presidential or other leadership ambitions with an ideal vehicle to attempt to influence public opinion. In spite of its declining circulation figures, and the parlous state of many of its newsrooms, the company’s titles are still highly influential and have a significant reach. This makes it an attractive buy, even during a recession.
Owners and editors have denied the fact that media ownership influences editorial content. Granted, there is little evidence in the press of direct interference by owners and managers in the day-to-day running of newsrooms, where operational control is exercised by editors.
However, the existence of indirect or allocative control cannot be denied. Often, this form of control is as crucial, if not more crucial, to the long term direction of a company than operational control. Owners exert this control through exercising shareholder rights, including their right to hire and fire directors, and directors in turn through their choice of editors. No company will appoint people to these positions if they do not fit in with the prevailing company ethos and strategic direction.
One group that has announced its intention to bid for a 25% stake in INM-SA, and that has received little media attention up to this point, is the Independent Trust for Media Freedom. The Trust was established by the group’s employees, claiming that it enjoys the support of just under 500 of the 1,300 employees. According to the Trust, staff signatories of a letter of support for the Trust represent all of INM SA’s regions, as well as all of its activities – printing, editorial, advertising, circulation – and all employee levels except the most senior management level.
The bid’s funder – whoever it lands up being – will receive profits until their financial investment is paid off, after which time the shares will revert back to the Trust.
The objectives of the Trust are to respect, protect and promote freedom of the press and other media, to ensure vigorous, high-quality, non-partisan and independent journalism, to acquire an equity stake in INM-SA to benefit staff, to promote broad-based black economic empowerment in the Company, and to promote the development and training of journalists and other staff in INM-SA.
The bid is an important development, as it places quality journalism at the centre of its objectives. Good journalism should have an ethical basis, grounded in the belief that the profession should, at its heart, be about speaking truth to power. Journalists’ interests should be driven, first and foremost, by the need to defend and promote the principles of their craft.
If journalists have a significant say in their own working conditions, then they are in a better position to secure conditions for ethical journalism than if they were mere pawns in someone else’s decision-making schema.
Of course, much turns on whether the company is listed in future. If it is, then the 75% stake of the dominant owner will be diluted even further, which may strengthen the hand of the Trust. But it may also increase commercial pressures.
This stake should also give journalists some power to resist attempts to influence the editorial direction in favour of one or the other political faction. It should allow them to, at best, restrict and at worst, frustrate the control of managers (of the politically inspired or bean-counting type) and increase the independence and free expression of journalists.
The transformation profile of the newspaper industry leaves much to be desired, and it is under pressure from Parliament to address the woefully white and male character of ownership and management. The industry is dominated by one large group, Media24, and three smaller ones, Avusa, INM-SA and Caxton, and two of these (INM-SA and Caxton) are entirely white-owned. Shockingly, in 2011, Print and Digital Media South Africa revealed that a mere 4.4 per cent of top managers are women.
This situation is untenable and has to change. If newspapers are not representative of society demographically, their legitimacy will forever be called into question. Black people and women are apparently well represented in the Trust’s bid, which should also make it more attractive to potential funders, and boost the company’s empowerment profile significantly.
A greater demographic diversity at the top of the company does not automatically mean that the reader will be exposed to a greater diversity of ideas. However, diversity is a likelier outcome if more people from a diversity of backgrounds and interests are involved in decision-making.
The Trust’s bid, should it be successful, is not without its risks. Apart from the risk of the deal not working out financially, there is also the risk that the Trust ends up in a co-ownership arrangement with owners that do not have the values of independent journalism at heart. In that case, their 25 percent stake may not be enough to block decisions that affect the newsroom and that they are not happy with, such as the choice of editor.
The Trust may become yet another discredited worker investment vehicle, exploiting the very workers it claims to serve. It may not be willing to make the tough calls that are in the broader journalistic or public interests, but that are unpopular with staff.
The Trust will need to address some key issues if it is to be successful in its bid. The newspaper industry is in need of a shake-up. Newspaper circulation is in long-term decline, with the exception of indigenous language newspapers. Many INM-SA readers have migrated to the tabloids and to digital platforms.
The Trust must ensure that the newspaper group develops a much more serious digital strategy than is evident at the moment, but this strategy will be doomed without a stronger content proposition for INM-SA’s papers.
What has become increasingly apparent is that newspapers that invest in quality, relevant journalism that speaks to society’s greatest aspirations and deepest fears (and not just its basest instincts) are able to buck the trend of declining circulation and hold onto and even grow their readerships.
However, investigative journalism as it is currently practiced in South Africa tends to focus on the conduct of political elites, rarely considering the dynamics of grassroots politics to be important enough to merit investigation. This leads to massive blind spots in journalistic accounts of the power dynamics in society. Addressing this lacuna is a content proposition that media organisations still need to respond to.
The African National Congress (ANC) has argued that the overly concentrated nature of the press, coupled with continued white domination, has led to a press that promotes market fundamentalism, and that is largely out of touch with mass sentiment.
While being undoubtedly self-serving, there is merit in their argument that the press still favours urban-based news and middle class sentiment; to this extent, the inequalities in broader society also reproduce themselves in the media. If the Trust is to fill this reporting and commentary void, then it would need to ensure that journalists break with past practices of newsgathering, crowdsourcing much more news, and relying less on newswire copy.
In order to make this transition, the Trust will need to turn around the prevailing institutional culture of responding to changing media consumption patterns and financial pressures by cutting to the quick, instead of encouraging innovation. It must also address the fact that the continued dominance of English in its papers restricts their ability to grow.
What can be learned from international experiences? There are some examples of newspapers being run by Trusts, possibly the most notable being The Scott Trust Limited, which owns The Guardian newspaper. The advantage of this ownership model is that it removes the immediate pressure to make profits at all costs to deliver impressive dividends to shareholders.
But staff-owned and controlled newspapers can also be precarious. Some hard lessons can be learnt from Le Monde in France. Until recently, the paper had a complex ownership structure controlled by its staff, which had veto powers over the appointments of the editor and Chief Executive. Readers were also represented on the board of directors through a readers’ association.
The purpose of staff ownership was noble, namely to secure the paper’s independence in the wake of political manipulation of other French papers during the Second World War. However, the paper ran up huge debts from a range of ill-advised acquisitions in the 1990’s, which couldn’t be paid off as the staff resisted attempts to adapt to a changing media environment and improve efficiency.
INM-SA is already a highly consolidated newspaper group, so it is unlikely to want more acquisitions like Le Monde did to spread its bets. This means that internal cross-subsidisation of less profitable activities – that are nevertheless of considerable public interest – by the more profitable ones is entirely possible.
It is important that the INM-SA staff draw on the strengths of social ownership models attempted elsewhere, while not reproducing their weaknesses. But on balance, the strengths of such forms of ownership may well outweigh their weaknesses.
The battle for the soul of INM-SA is in many ways a proxy battle for the future of independent journalism in South Africa. Media freedom has been under significant threat in the past few years. These threats come not only from outside the media industry, but from within as well, but the latter threats have received scant attention.
It’s about time that journalists raised their voices and started speaking for themselves about the conditions needed for independent journalism. If recent developments at INM-SA are anything to go by, then this time may well have arrived. DM
Professor Jane Duncan is Highway Africa Chair of Media and the Information Society, School of Journalism and Media Studies at Rhodes University. Before joining Rhodes, she worked at the Freedom of Expression Institute, and was its executive director from 2001 to 2009. She has also worked at the Afrika Cultural Centre in Newtown and the Funda Centre in Soweto. An art historian by training, she has three post-graduate degrees, including a PhD from the Wits School of the Arts, and has published widely on media policy and freedom of expression issues. She tweets at @duncanjane.
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