A view of the Singapore Press Holdings (SPH) building in Toa Payoh. (File photo: TODAY/Najeer Yusof)
SINGAPORE: Singapore Press Holdings (SPH) will transfer its media business into a not-for-profit entity amid the ongoing challenge of falling advertising revenue, the company announced on Thursday (May 6).
The restructuring exercise involves transferring the entire media-related business of SPH to a newly incorporated wholly owned subsidiary, SPH Media Holdings.
The transfer involves relevant subsidiaries and employees, the News Centre and Print Centre and their respective leaseholds, as well as related intellectual property and information technology assets.
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).
After the transfer of SPH Media to the CLG, SPH will no longer be subject to shareholder and other relevant restrictions under the Newspaper and Printing Presses Act, said the company.
"UNPRECEDENTED DISRUPTION"
The media industry has faced "unprecedented disruption" in recent years, SPH said in explaining the rationale for the move.
The company's operating revenue has halved in the past five years due largely to a decline in print advertising and print subscription revenue, it said.
SPH's media business has since fallen into the red, recording its first-ever loss of S$11.4 million for the financial year ended Aug 31, 2020.
If not for the Government's Job's Support Scheme (JSS), the loss would have been a deeper S$39.5 million, said SPH.
For the six months ended Feb 28, 2021, pre-tax profit fell 71 per cent to S$3.1 million compared to the same period a year ago. SPH would have incurred a pre-tax loss of S$9.7 million if not for the JSS grant, said the company.
Even with the resumption of business activities after Singapore's reopening from a COVID-19 "circuit breaker", decline in advertising revenue is expected to continue at a similar pace to the last five years, it said.
SPH's digital circulation now surpasses its print circulation, with digital transformation efforts nearly doubling the average monthly unique audience across all its titles to a record 28 million over the past two years.
But digital subscription and digital advertising have been unable to offset the decline in print advertising and print circulation revenues, said SPH.
The company has undertaken strict cost management measures in recent years to mitigate this.
"However, there is little scope for further cost cuts without impairing its ability to maintain quality journalism," said SPH.
"SPH's media business plays a critical function in Singapore with the provision of quality news and information to the public, in particular in the vernacular languages," said the company.
Given this, winding up the media business or selling it off were not feasible options, it said.
"However, remaining part of a publicly listed company where it is subject to expectations from shareholders of profitability and regular dividends is no longer a sustainable business model," said SPH.
"Hence, a not-for-profit structure that allows SPH Media to seek funding from a range of public and private sources with a shared interest in supporting quality journalism and credible information is the optimal solution."
Full story at Channel News Asia
Ng Yat Chung should be made CEO of the corrupt Keppel Corp so he could sink it big time like he did NOL; I am positive in time to come he shall be hailed as a hero in the court of public opinion and all monumental fuck-ups previously committed thus forgiven.