Our comments on SPH spinning off the media business

Singapore Press Holdings is restructuring by putting its media assets, including the major newspapers in the country, into a separate ‘public company limited by guarantee’.

Much of the discussion since has been about how quality journalism, or media independence/objectivity, is guaranteed, or not.

However, seeing from the business lens, we have a few comments:

1. This restructuring makes sense. SPH’s main revenue/income comes from property. It should not be held down with a business unit that is in long term decline.
2. The 15% stock price drop of SPH holdings is a reflection that it is becoming a pure property company.
3. Under the circumstances, when the business overall is severely impacted by the Covid-19 pandemic, it is probably the best time to do such restructuring. In good times it would be much hard to convince stakeholders.
4. There are many reasons which made (especially print) media tough. At the end of the day, while readership of SPH’s newspapers are going up, its share of readers’ attention probably went down significantly. So naturally share of advertisers’ purse would trend down too.
5. The soon-to-be SPH Media per se would look at its P&L in a more independent way. Perhaps it will find better ways to survive, which would have been hard under the previous set up. Decision should surely be more streamlined and less shackled by other considerations.
6. That includes other media business areas in addition to print papers. Many media innovations are happening across the world to deal with the same challenge. SPH Media should look at beyond newspapers and TV networks for inspiration.
7. Ultimately, even Alibaba is, in a way, an advertising company.

 

P.S. it is interesting that many news reports about this development is using the SPH Press center building with dark clouds as the main image ^_^. Like this one: