SINGAPORE: Amid declining advertising revenue, many media companies around the world have been forced to find new sources of funding, including government support.
This also applies in the latest Singapore Press Holdings (SPH) restructuring, Home Affairs and Law Minister K Shanmugam said on Saturday (May 8), pointing out that the business model of the company’s media arm “doesn’t work”.
“Straits Times, Zaobao, the other SPH newspapers are facing the same pressures and headwinds that media in other countries have faced in relation to ad revenues collapsing,” he said.
“In this environment, you have governments of many countries – France, Scandinavian countries, Australia – they are all aiding their media. You have no choice if you want high-quality journalism.”
SPH announced on Thursday that it will spin off its media business into a not-for-profit entity amid falling advertising revenues.
SPH’s media business recorded its first-ever loss of S$11.4 million for the financial year ending Aug 31, 2020, even after implementing strict cost management measures including job cuts.
READ: SPH restructuring will balance ‘conflicting’ expectations of public, shareholders: Lee Boon Yang
SPH acknowledged that letting its media business remain part of a publicly listed company, subjected to shareholders’ expectations of profitability and regular dividends, was no longer a “sustainable business model”.
Hence, it said that a not-for-profit structure will allow its media arm to get funding from public and private sources with a “shared interest in supporting quality journalism and credible information”.
The Government has said that it is prepared to provide funding for this new entity.
Speaking at Chong Pang Community Club on the sidelines of an Edusave awards ceremony, Mr Shanmugam gave the example of the French government, which he said provided “hundreds of millions of euros in support, both direct and indirect, to the press every year”.
“In 2010, France commissioned a report. And it said: The country’s press is being kept in a state of, and I quote, permanent artificial respiration, close quotes, with state aid. Le Monde gets state aid,” the minister said, referring to one of the largest French daily newspapers.
“So, that’s the environment. You have hard questions. And so one can understand the context in which SPH has put forward this plan.”
Amid concerns that the new structure will compromise editorial integrity, SPH chairman Lee Boon Yang promised on Thursday that the media company will continue to produce “responsible, objective and accurate journalism”.
Mr Shanmugam said on Saturday it is “vital” that the public trusts the media.
“And in Singapore, we take great pains, if you look at Government, to retain, maintain the trust of people,” he said.
“And if you look at it, specific to the media, if the media is not trusted, it would inevitably lead to a government and political leadership that is not trusted. Then, we are all finished if that happens.”
Mr Shanmugam, citing independent surveys, said Singapore’s media is “highly trusted” compared to in other places like Europe and the US, where trust in media, government and political leadership “have all collapsed”.
For instance, Mr Shanmugam said the 2021 Edelman Trust Barometer shows that in Singapore, trust in the media has increased.
He said 62 per cent of respondents trust the media to do what is right, compared to the global average of 51 per cent, with Singapore ranking higher than developed countries, including the US, France, Canada, UK, Australia and Japan.
“So we have to maintain trust in all our institutions, and the media has to play its part in making sure that it maintains the trust of the people,” he added.
On Monday in Parliament, Minister for Communications and Information S Iswaran will deliver a ministerial statement on the restructuring of SPH.
SPH CEO’S REACTION “UNFORTUNATE”
Mr Shanmugam also touched on SPH chief executive officer Ng Yat Chung’s response to a reporter’s question on Thursday regarding the new not-for-profit entity’s approach towards editorial integrity and advertiser interests.
Mr Ng appeared to lose his cool, telling the CNA reporter that he took “umbrage” at the question.
Netizens have largely criticised Mr Ng’s tone and response.
Mr Shanmugam said the reporter asked “a right question, fair question”, noting that journalists would be concerned about editorial independence.
“Mr Ng’s reaction, and the way he answered the question, I think was very unfortunate,” Mr Shanmugam said.
“His outburst can be described in stronger terms, but I want to be careful and understated because SPH is a listed company, with shareholders, management, and I need to be careful.”
Nevertheless, Mr Shanmugam said a media company taking money from an advertiser “doesn’t automatically mean that independence is compromised”.
“The reporter who asked the question and her editor (in chief) Walter (Fernandez) know that taking money from an advertiser doesn’t automatically mean that independence is compromised,” he said.
“If that was so, most newspapers in the world would not be considered independent, because most newspapers do, in fact, completely rely on advertisements. The journalist however, asked a right question, fair question. And, of course journalists would be concerned about their independence.”
On Saturday, Mr Ng issued an apology on the matter. He told the Straits Times: “I had stood up for SPH Media’s long-cherished editorial integrity and will continue to do so.
“Being a direct and blunt-speaking person, I apologise for any offence I might have caused and regret any distraction from the merits of the proposed restructuring.”