A press conference called on May 6 by the Singapore Press Holdings (SPH) to announce the restructuring of its media businesses turned feisty at one point during the question-and-answer session.
SPH's CEO, Ng Yat Chung, appeared to take umbrage at a question by a CNA reporter, who asked:
"Just now you mentioned that the revenue from CLG (company limited by guarantee) will now be channelled into the new constitution of the company... does it mean that the media business will now pivot to emphasise editorial integrity, for example, ahead of advertiser interests? That's one.
The second question is, this move (comes after) various corporate initiatives to improve the sustainability of the media business. Is it fair to say that these initiatives have failed, and if so, where does the responsibility lie? Thank you."
Chairman Lee Boon Yang: Public duty to uphold
SPH chairman Lee Boon Yang responded first, saying:
"In a sense I have addressed your concerns about whether editorial policy will be ahead of advertising interest. I think, I'm sure all media do struggle with this. But I'm quite confident that what has upheld editorial integrity for SPH media for all these years will continue. There will be no difference, editorial integrity will take precedence.
I'm confident that under the CLG, it will be, what I call the DNA of SPH media will still be there, and will manifest itself. And rightly so, because editorial integrity would come ahead of pure financial consideration."
Lim added that faced with market pressures and changes in media consumption habits, one could change the entire media approach to focus on what sells, but it would damage the media capabilities that SPH has spent a lot of resources on.
"We believe that we still have this public information provider duty to uphold, and we want to maintain this standard... we have been doing so all these years, and I believe that going forward, under this CLG team, will also want to uphold this editorial (standard)."
Addressing the second question, he gave the example of classified ads, which were important revenue earners in the past, but were less relevant in today's digitalised world.
He said SPH needed to right-size their classified operations, which can still meet the demands of the advertisers with a smaller team.
"Likewise with sales, likewise with our backroom support, we need to make those adjustments. They are not failures in a sense, they are adjustments to the different industry conditions. And because we made those adjustments...we've freed up resources to invest in other areas."
CEO Ng Yat Chung takes umbrage
After SPH chairman Lee Boon Yang responded, Ng spoke up:
"Chairman, if I may, I honestly, I take umbrage at the first question. There are reporters from here who receive substantial funding from various sources. I don't believe you will describe yourselves as bowing to the needs of advertisers in doing your job.
So I think that, please, ok? I would say, at least for SPH, right, we have always had advertising and we have never ever considered the (needs) of advertisers, alright, so we always continue to write fair, reliable, and credible reporting.
So in reporting the answer to this, I will tell you first that the question, the fact that you dare to question SPH's title for, in your words, conceding to the (advertisers), I take umbrage at that comment.
Because I don't believe that even where you come from, you will concede in doing your job, you do not concede to the... (advertisers). So I must call it out. In fact, chairman is a gentleman, I'm not. SPH, the purpose of doing this is to make sure that SPH media will continue to do the job we have done so well for so long!"
Other highlights from QnA session
Here are the other highlights from the question and answer session, fielded by Chairman Lee, CEO Ng, and Chief Financial Officer Chua Hwee Song.
1. How will SPH's funding model work, and how will this move impact the jobs of people working at SPH, will there be any wage cuts or retrenchments?
SPH will transfer all of its media assets, including leasehold properties like the news centre and print centre, and intellectual property rights, to a newly-incorporated, wholly-owned subsidiary named SPH Media Holdings.
It will receive an injection of S$80 million in cash and S$30 million in shares and SPH Reit (real estate investment trust) units, as well as SPH's stakes in four of its digital media investments.
As a nonprofit organisation, it will be able to seek additional public contributions. It is possible for a CLG to receive additional financial support from the government to help it achieve its mission as a public information provider for Singapore.
As for retrenchments, there is no longer "further scope" for cost-cutting without impairing the quality of SPH Media's journalism. The intention is not to impair the ability of SPH Media to provide quality journalism.
2. How will this impact SPH's existing shareholders?
Shareholders expect to have a regular financial return and dividends. However, SPH Media's revenue and profits are expected to continue to decline, which would adversely impact shareholders under the current arrangement.
Once the restructuring is concluded, they believe shareholders can see better value.
3. Who will manage the CLG, and will more funds be injected into the CLG in the future?
The CLG's management will be announced at a later stage.
No, the intention is not to inject more funds into the CLG in the future. This is a restructuring process where SPH media will be transferred over to the CLG, and it will then strike out on their own. There is no commitment, no undertaking to continue to fund the CLG from SPH. However, SPH may choose to make a public-spirited contribution to the CLG in the future.
4. Could you share more about the decision-making process, why was CLG the best way to go, and were there other alternatives?
There are some options that normal companies can consider which are not acceptable for SPH Media, which functions as an important public information provider.
In a company that has a vibrant, existing competition, there is the option of selling the loss-making business to the competition in a merger.
But in Singapore's context, where media competition is quite limited, in the interest of preserving media diversity and ensuring that customers have access to alternative viewpoints, the sale or merger option is not one they wanted to adopt.
At the end of the day, restructuring was the most appropriate and balanced option for the interest of all stakeholders, including readers, shareholders, advertisers and employees.
5. Once the SPH Media staff moves to the CLG, will they get wage cuts, will they still receive bonuses since they are no longer working for a for-profit company?
SPH Chairman cannot speak for the CLG. Nevertheless, the intention of this exercise is to ensure that the media capability of SPH Media is in no way undermined by the transfer. The CLG is fully aware of this intention, and they know they have taken on the responsibility of nurturing and strengthening this "precious legacy".
They will be very careful about not undermining this, whether it's by cutting wages or retrenchments, they will have to be very careful in ensuring that the media capability is in no way adversely affected as a result of this transfer.
Top image from Straits Times' YouTube channel.