The cost cutting in Independent Newspapers was relentless - Ann Crotty

Independent Staff Trust and MWASA's submission to the PDMTTT, Jan 29 2013

Ann Crotty, submission to the Print and Digital Media Transformation Task Team hearing by on behalf of the Independent Staff Trust and Mwasa, January 29 2013

The call for submissions from the Transformation Task Team raises a number of critical issues relating to the current condition of the print media in South Africa. In essence it appears that the print media has failed to address the transformation challenges that it has faced since the late Eighties and that became more urgent after 1994.

The continued failure effectively to meet this challenge not only risks intervention from the government but will see print media companies become increasingly irrelevant to a growing section of the SA public. This irrelevance will in the long-term threaten the financial viability of even the largest print media companies.

Management of print media companies in SA have been inclined to explain declining circulations as evidence of the inroads being made by the digital media ignoring the fact that in much of the developing world print media, where it is relevant, continues to grow.

With regard to the Independent News & Media SA (INMSA), which was formerly known as Argus Holdings, there was some hope that when Tony O'Reilly of Dublin-based Independent News plc acquired the largest and most powerful print media company in the country in 1993 it would help to effect a fundamental break with past attitudes and practices and would generate the energy required to undertake the necessary transformation.

While the past 20 years has seen some transformation of newsrooms at the Independent the widespread cost-cutting that has characterized much of that period has meant that the transformation has been of a superficial character.

The introduction of young black journalists into newsrooms during the past 20 years has helped enormously to invigorate and energise the content of the newspapers.

However the cost-cutting has meant that from the first day of employment these young journalists are under severe pressure to deliver stories. The extremely limited number of experienced journalists in the newsrooms means that young journalists are deprived of the sort of on-the-job training and mentoring that helps to ensure journalists play an effective role in engaging in the important issues of the day.

 (I have included a report, which analyses INMSA's financial performance between 1999 and end of 2010. The report, which was written on behalf of Mwasa for submission to National Treasury, reveals the extent of cost-cutting forced upon the company's newsrooms and the dire affect this had on INMSA's ability to tackle any challenge whether from the need to transform or the need to compete with digital media. The 100 percent foreign ownership ensured that all of the profits generated by this cost-cutting was repatriated to Ireland.)

Many of the shortcomings in the group's newspapers today are the direct result of relentless cost-cutting over the years which have forced editors to make absurd choices about what stories NOT to cover, put unreasonable pressure on reporters, photographers and sub-editors, as well as sales and print staff.

This cost-cutting pressure has also sent our circulations spinning downwards as readers inevitably refuse to pay rising prices for newspapers whose quality can no longer be guaranteed. We can barely cover the cities properly; the rural areas are effectively out of our reach. 

The resource constraint has also meant that new young black journalists are absorbed into the prevailing culture of the newsroom and there is not the sort of cross-pollination of attitudes and opinions that would help to better reflect the diversity of voices in SA.

This not only puts young black journalists at a disadvantage but it also means that older white journalists do not get the full benefit of the excellent black talent in the newsroom.

On the critical issue of diversity - One small way of addressing the pressing need to hear the voices of poor and rural communities would be to set up ‘satellite' offices in rural areas and in townships.

These satellite offices would combine the talent and knowledge of residents from the local community with experienced journalists. The process would involve a two-way mentoring system in which the young resident would learn journalistic skills and the experienced journalist would learn first-hand about the issues facing poor and rural South Africans.

The proposed sale of INMSA presents an opportunity to ensure that the new ownership structure of the company is reflective of, and provides expression for, the "diversity of SA voices".  To this end the Independent Staff Trust has been established with the purpose of acquiring a 25 percent stake in INMSA.

A key objective of the Trust is to ensure that the staff of INMSA, who "reflect the diversity of SA voices", have some influence on the direction of the company.

The Trust welcomes this call for submissions and hopes that it drives a broad debate on the role of the media in society. That debate should include discussion of what is the most effective way - from the perspective of ‘society' - of financing the media.

The Independent Staff Trust is motivated by the belief that newspapers - print and digital - are different from ordinary consumer products such as baked beans and that this warrants a significantly different approach to the ownership and management of the businesses involved.

In its October statement the TRANSFORMATION TASK TEAM indicates that it also believes that media plays a more complex role in society than ordinary consumer goods do- 

"As a part of a new society, the media must be proactive in redressing the imbalances of the past, while still ensuring its independence and being proactive in its vital role of promoting democracy."

I think it is a general belief in this "vital role" that gives journalists the "licence" to operate. Most people, when questioned by a journalist will respond - not always honestly perhaps - but given that we do not have any legal authority to insist on being answered I think it is quite amazing how often they do.  While this can be partly explained by a fear of the "damage" that a scorned journalist might do, I think in general it reflects a view within the public that we play some sort of ‘social' role.

And while the precise nature of that role may rarely be expressed by the politicians and the business people we constantly question I think it is probably what the TASK TEAM refers to when it talks about "the vital role of promoting democracy".

I fear that our licence to operate, that is the willingness of people to speak to the media and the willingness of people to read what we write is being undermined by the fact that we do not play that role adequately and are not reflecting this country's diversity.

The public with whom we engage - either as readers or as "newsmakers" - must at some level feel confident that we are playing that role. If they don't then over time we lose readers and we lose access to "the newsmakers".

So, to the extent that this TASK TEAM is encouraging the industry to transform and ensure it reflects the diverse interests and voices in this country that can only be good for our business.

If we do not change we will become irrelevant and there will be no Media Business.

It is important to acknowledge that the Independent Staff Trust believes that the discipline of capital markets - as enforced by the JSE - is very useful. However we also believe that a focus on short-term profit can be destructive of sustainable long-term profits because it inevitably overlooks the investment needed for constant transformation.

It is our hope that this destructive short-term tendency would be reined in by a Staff Trust whose members are diverse and whose interests are long-term.

In recognition of the importance that ownership and management play in the issue of transformation, codes of conduct in this industry must not be restricted to journalists. We need to develop codes that guide the behavior of management in this industry and also codes that guide the behavior of the shareholders. (The code developed and used by the Fairfax group in Australia is a useful reference.)

I'd like to remind the TASK TEAM that in terms of section 72 of the new Companies Act the large media companies are obliged to have SOCIAL AND ETHICS COMMITTEES, these committees could play an extremely useful role in monitoring adherence to such codes.

Source: The Indie Trust

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