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Manuel sets tough Budget of R186b... Fourth estate becomes the property of th... No fanfare at Johnnic parad... SA customs bloodhounds sniffing out il... Peers honour Didata and Ruper... Deliver or be sold, Post Office tol... From adversity to achievemen... Government blamed for Safcol's poor show... Rate hike may not be the right medicin... |
Fourth estate becomes the property of the new power elite
Looks at the changing face of newspaper ownership
THE media, more than any other industry in South Africa, is going through a dramatic and rapid shake-up of ownership, with a new set of print press barons emerging. The strong political background of most of the budding print media magnates distinguishes them from the outgoing white business elite. The pack includes former trade unionist and ANC secretary-general Cyril Ramaphosa; Mandela's personal physician, Nthato Motlana; former Robben Island inmate Eric Molobi; past Inkatha general secretary Oscar Dhlomo and Irish business tycoon Tony O'Reilly. The shake-up will leave only two of the country's major commercial newspapers, Die Burger and Beeld, in the hands of so-called conservative white South Africans. The new media elite has addressed fears of editorial interference by giving assurances that they will uphold press freedom. Nonetheless, owners are able to influence the direction of their publications through their appointment of editors, giving the debate about media ownership strong political overtones. Politics has always hovered in the background of South Africa's press ownership. In the past, the two Afrikaans print press groups, Nasionale Pers and Perskor, were unashamed Nationalist Party mouthpieces which benefited from lucrative government printing contracts. In the same way black economic empowerment is taking place today, there was an Afrikaans drive to reduce English speakers' domination of the economy. Until two-and-a-half years ago, the English-language press was dominated by Anglo American, which controlled Times Media Limited and Argus Newspapers. Anglo's control did not stem from a fascination with the media or because newspapers offered a great investment opportunity. Its aim - or rather that of owner Harry Oppenheimer - was to keep the English press out of the hands of Nationalist government supporters. In the mid-70s, Oppenheimer's Advowson Trust began accumulating TML shares to head off Louis Luyt, then an industrialist, who was believed to be stalking the group on the NP's behalf. Signs of a shake-up in South Africa's press ownership emerged in March 1994, on the eve of the election, when O'Reilly's Independent Newspapers bought the Argus group. The deal, which received the ANC's blessing, was the most prominent foreign investment South Africa had then received. Anglo, however, had begun examining the possibility of shedding its press interests in 1990. These were not seen as core interests and of all its holdings, they were the most controversial. In fact, some of its executives saw the press interests as more trouble than they were worth. To demonstrate that its newspapers were independent, say sources, Anglo ran them from a distance and tolerated mistakes which would never have been accepted at its other operations. In 1991, Anglo started talks with O'Reilly and Pearsons, the British publishers of the Financial Times. A black empowerment deal was not considered. At the time the ANC was trying to launch its own newspaper and had its eye on TML. A key reason for former TML managing director David Kovarsky's sudden departure, says an Anglo source, was that he was about "to get into bed with the ANC". For Anglo, any direct link with the ANC was out of the question and the black business groupings that existed at the time, like Thebe Investments, were not totally separate from the party. Talks to sell off stakes in TML's business publications, Business Day and the Financial Mail, to Pearsons, proved slow. In addition to some hostility from TML's management, Pearsons was indecisive, hesitating at each sign of a crisis in South Africa. In 1993, in the run-up to the elections, it had an attack of nerves and negotiations stalled. They started again in 1995 and, while a deal has been approved in principle, some details still have to be finalised. In the meantime, as an increasingly vibrant black business community began to emerge, Anglo began to formulate the blueprint for the historic Johnnic takeover, recognising that TML would be part of it. Last month, the National Empowerment Consortium, a grouping of 50 black businesses and trade unions, gained control of Johnnic, and thus TML. Ramaphosa, who headed the NEC, became Johnnic chairman this week and has his eyes set on the same position at TML. Ramaphosa and his chairman at New Africa Investments, Motlana, are said to view TML as the jewel in the Johnnic crown. It is suspected Ramaphosa has never given up his political ambitions, but analysts say that with so much pension money in the Johnnic deal, he is unlikely to jeopardise TML's financial viability. The Johnnic deal sparked another shift in media ownership, that of Finance Week. Financial Mail editor-at-large David Gleason bought control of the rival publication and was soon joined by his boss and friend Nigel Bruce. Both had already tried to buy the FM from Anglo. Bruce, the Financial Mail's editor and a TML director, had apparently made himself unpopular within the NEC through his hearty disbelief in affirmative action. But Pearsons is understood to have made it clear to the NEC that it would not tolerate any attempts to "execute" TML editors. The Johnnic deal is South Africa's largest black empowerment deal yet, but the ball began rolling in 1994 when New Africa Investments Limited - which is headed by Motlana and is part of the NEC - bought a majority stake in the country's largest daily newspaper, The Sowetan, from O'Reilly's Independent Newspapers. Nail also owns the loss-making New Nation. In a deal which would have been unthinkable for an Afrikaans press group a few years back, Molobi's Kagiso Trust Investments is poised to gain joint control of Perskor - which publishes The Citizen, 23 regional titles and has a half share in Rapport - in return for a 50% stake in Kagiso Publishers. The deal is currently being reformulated after being blocked on a technicality and interference by minority shareholder Mannie Simchowitz. Such a deal should help Perskor to shed its verkrampte image and regain some government book printing contracts. The burning question, however, is how KTI will deal with The Citizen, the product of National Party attempts to gain a foothold in the English press, and which is still viewed as a conservative newspaper. In another move, Naspers - which publishes Die Burger and Beeld - is talking to a black consortium about selling off a 51% stake in its Sunday newspaper, City Press. The consortium includes Dhlomo's Dynamo Investments, Cape-based investment group Ukhozi and another unnamed party. Most of the budding black print media groups have also been involved in the scurry for radio stations and seem set to be part of next year's rush for a stake in a new TV licence. While newspapers' political clout has no doubt been a major draw for the black empowerment groups, the tie-ups also make business sense for the papers. More credible ownership will help them broaden their readership into the black middle market, while black partners will help their bids for contracts for anything from the electronic media to printing school books. For some, however, the media ownership shake-up signals very little change. Enterprise editor Thami Mazwai says the day-to-day running of the press remains in white hands so their newspapers still reflect "yesterday's views". He believes a real shake-up will come only when management and editorial staff represent more of South Africa and its people. Robin McGregor & Associates says the media shake-up means O'Reilly's Independent Newspapers now has an 18% share of the South African newspaper market (magazines are excluded). Britain's Guardian group, through its control of the Mail & Guardian has a 0,35% slice and, if the deal goes ahead, Pearsons will have a 0,45% stake through its 50% holding in Business Day. This leaves 81% of the newspaper market in local hands. The Johnnic deal gives the NEC a 21% share, while KTI should get half of Perskor's 10% slice if its deal gets the green light. Other ownership changes are on the cards. TML is reportedly talking to Nail about taking over its controlling stake in the Sowetan and New Nation. In addition, a consortium that apparently includes black business and TML is rumoured to be about to buy control of Enterprise, a monthly business magazine, from African life. The black partners include Mazwai, SA Housing Trust general manager Siza Kampepe and Wiseman Nkuhlu's Worldwide African Holdings.
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