Singapore Press Holdings is to restructure its media business in order to classify as a not-for-profit as the listed model is no longer financially sustainable.
According to the announcement, the move is necessary to allow the company to protect quality journalism. SPH says classified the media business as a not-for-profit will allow access to further funding, while a lift on regulations will release value for shareholders.
The reasons for the challenges to its financial stability were levelled squarely at the ongoing fall in ad revenue.
Dr Lee Boon Yang, Chairman of SPH, said, “With the resources that SPH is providing upfront and the prospects for public-private partnership funding going forward, we anticipate that SPH Media will have a more sustainable financial future. It will have the resources to focus on transformation efforts and quality journalism, as well as to invest in talent and new technology to strengthen its digital capabilities. This will ensure that the public will continue to benefit from quality information and credible news from trusted media titles and newsrooms, across different platforms and in vernacular languages.”
Why has this happened?
The media business is no longer making a profit and has fallen in the red. According to SPH, it recorded its first-ever loss of $11.4 million for the financial year ended 31 August 2020.
The impact of the pandemic has factored into this. SPH says, if not for the Singapore Government Jobs Support Scheme (JSS), the loss would have been deeper, at $39.5 million.
SPH says this is despite audiences growth and significant spending put into its digital transformation efforts. Over the past five years, SPH increased its spending in technology, product development and data analytics talent by 48%, to more than $20 million a year and invested $35 million in digital content and audience development talent in the newsrooms. Beyond manpower, SPH also increased spending on new consumer-facing digital platforms and products, averaging more than $20 million a year over the past 5 years.
Due to this digital transformation effort, SPH’s average monthly unique audience across all SPH titles over the past two years has nearly doubled to a record 28 million. Digital circulation has surpassed print circulation.
The company being unable to reach a profit, despite this growth and investment into digital is why the company is seeking a new financial structure, which will allow it access to funding and success is measured in other ways than profit. The Guardian in the UK follows the same model.