Owners of the Sowetan recently sold the newspaper and their other media assets to Johnnic Communications (Johncom). Organisations such as the Media Workers Association of South Africa (Mwasa) and the Freedom of Expression Institute (FXI) have concerns about the transaction. FXI’s Console Tleane states his organisation’s concerns.
At the beginning of July, the Competition Tribunal approved a Johnnic Communications’ (Johncom) application to buy the Sowetan newspaper from New Africa Publications (NAP). NAP owns 100% of Sowetan shares and 50% in the Sowetan Sundayworld. Johncom owns the other 50% of Sundayworld . This is after the Competition Commission advised the tribunal on the sale. The two bodies have a statutory responsibility to block business transactions that create “uncompetitive tendencies” through “closing out” other competitors. But why should workers worry about what is a transaction between two capitalist groups?
While Sundayworld elevates gossip, beauty and celebrity lives over real issues, the Sowetan still stands as the only paper that still tries to have space for working class views. It is the only newspaper with a labour desk that highlights workers’ daily hardships and struggles. The newspaper also has a weekly column called Workers Assembly which Cosatu’s general secretary Zwelinzima Vavi writes.
There is a real possibility that the sale of the newspaper will negatively affect the content of the Sowetan . Since 2002, the Sowetan started to face competition from other newspapers. Media24 (the owners of newspapers like City Press) introduced the Daily Sun , which is made up of gossip and soccer, at a price of R1. Within a few months, the Daily Sun replaced the Sowetan as the biggest daily newspaper. Lately, The Star also beat the Sowetan in terms of sales and rose to become the number two biggest daily newspaper. The loss in circulation means that Johncom as the new Sowetan owners will be under pressure to increase sales. Numbers as well as advertisers and not content drive newspapers.
In the face of this, Johncom has two options. The media conglomerate can accept that it is impossible to beat the Daily Sun . If this is the case, the new owners will only be concerned about fighting The Star . This they can do by strengthening content and make the Sowetan a “˜better quality’ newspaper. This means attracting the so-called higher Living Standard Measurement (LSM) earners; the middle class in short. This will potentially mean that working class news and views will be sacrificed in favour of reports from Johannesburg Securities Exchange (JSE).
The second option that the new owners of the Sowetan can adopt will be to compete with the Daily Sun . This means what media analysts call “˜dumbing down content’. If this option is followed, then the content of the Sowetan will become like that of the Daily Sun – full of gossip, witchcraft and naked women.
Besides concerns about content, there is the issue of concentrated ownership. NAP which New Africa Investment Limited (NAIL) owns, is not offloading just the Sowetan and Sundayworld , the black economic empowerment company is selling all its media assets to Johncom. NAP owns 33, 3% in the newspaper and magazine distribution company, Allied. With the NAP/Johncom transaction now through, the shares in Allied will go to Johncom that already owns 33, 3% of the distribution company. Finally, there is concern about jobs. Already certain media reports allege that 33 workers may be retrenched if the sale goes through. Retrenchments of current Sowetan staff demonstrate that the main motivation behind the transaction is profit.
( Tleane heads FXI’s media research unit)
Members vote for Sowetan
Auto assembly shopstewards picked the Sowetan as the daily newspaper for Numsa to target in the union’s media strategy.
Answering a question in a survey conducted in February 2004, 18, 4% chose the Sowetan, the newspaper that Numsa should target to get union news across to members. This result was in line with a members’ survey conducted in 2000. In that survey, The Sowetan was also No.1 – 26, 8% of members surveyed chose the newspaper as the best commercial vehicle to get our views to members.
Johnnic Communications (Johncom) is a leading South African company with tentacles in every nook of the media and entertainment industries. The Johannesburg Securities Exchange (JSE)-listed company owns Sunday Times , Business Day , The Herald and Daily Dispatch newspapers. Johncom also publishes over 50 magazines. The Black Economic Empowerment (BEE) company also own internet sites, digital data bases, Struik Books, Booksite Afrika and map publishers, Mapstudio.
But Johncom is not involved only in newspaper and book production. The company is involved in different parts of the media value chain. 35, 7% of Caxton and CTP printing group belongs to Johnnic. Downstream, the multi-million organisation owns Exclusive Books retail stores. With the acquisition of NAP assets, Johncom’s ownership in the newspaper and magazine distribution company, Allied soars to 67%.
On the entertainment front, the company which is wholly-owned by Johnnic, operates 234 screens in Nu Metro cinemas throughout the country. The company also distributes movies, DVD, videos and computer games.
Johnnic also owns 100% of Gallo music group as well as the well-known Downtown recording studios. The company has in its stable South Africa’s only business television channel, Summit TV and 38, 6% of both M-Net and SuperSport television channel.
Earlier in the year, Johncom reported a R2 682 million as revenue from ongoing operations for year ended March 31 2004. This represents a 6% growth on the previous year. Profit after taxation for 2003-2004 stood at R193-million. In its annual report, the company has decided to strengthen its business forays in West and East Africa’s media and entertainment industries.