Media watches everybody, but who watches media?

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News Centre, SPH

By Abhijit Nag

News Centre, SPHThese are exciting times for American journalism.  Jeff Bezos the Amazon man bought the Washington Post for US$250 million in August and wrote in a letter to the staff: “The paper’s duty will remain to its readers and not to the private interests of its owners. We will continue to follow the truth wherever it leads, and we’ll work hard not to make mistakes.”

Now Pierre Omidyar the eBay founder is about to launch an investigative journalism website with Glenn Greenwald, the reporter who  got the scoop from former National Security Agency contractor Edward Snowden about American and British domestic spying.

Something big happened in the Singapore media too. Singapore Press Holdings’ net profit attributable to shareholders shot up by $209 million and then dropped by 143.8 million. Did you notice that?

The Straits Times reported on October 12 that SPH net profit for the 2013 financial year ended August 31 fell by 25 per cent to $431 million, “mainly due to the adoption of a different accounting policy”. The report added: “With the establishment of the SPH Reit, the group changed its accounting policy for investment properties from cost to a fair-value basis.

“As a result, SPH posted a fair-value gain of $111.4 million from its investment properties for the year ended August 31, down 43.9 per cent from the year before.”

Put simply, SPH restated the account for the financial year 2012 after listing its property arm, SPH Reit, on the Singapore Exchange (SGX) mainboard.

If you check the SPH annual report for 2012, you will see the net profit attributable to shareholders was $365.5 million, 5.9 per cent lower than the previous financial year.

But using the new accounting policy, SPH restated the 2012 net profit attributable to shareholders as $574.7 million, a $209 million jump from the original figure.

Since the 2013 net profit attributable to shareholders is $431 million, it’s a 25 per cent drop from the revised 2012 figure.  Got it?

The news was reported by other local media like any other story, as if such $200 million account restatements happened every day.

SPH net profits attributable to shareholders have been restated before, but not on such a scale in recent years.

This correspondent is not questioning the figures. But while the media here reports the news, who is keeping an eye on the media? Apart from the government, that is?

There are no websites here like Romanesko and Mediagazer which cover British and American media. The government-owned MediaCorp is pretty much a closed book, answerable to no shareholders, and SPH is raking in a fortune, thank you. It’s more profitable than SIA. On $15 billion in revenue, SIA reported a net profit of $379 million in 2012-13.

SPH on the other hand reported a net profit of $431 million on an operating revenue of just $1.2 billion.

Cash cows seldom come fatter than this.

SPH net profits 2000-2013.
SPH net profits 2000-2013. Source: SPH group financial highlights. 2012 figure restated; originally $365.5 million

This is not envy speaking. No newspaper covers Singapore in greater detail than The Straits Times. And it costs just 90 cents except on Saturdays, when it may run to more than 200 pages for a dollar.

Jeff Bezos, who bought the Washington Post, said printed newspapers might become a luxury item some day.

That’s not likely to happen here any time soon, considering the profits still being made. Not that the cash cow isn’t getting leaner. The SPH press release for the financial year 2013 says: “Revenue for the Newspaper and Magazine business fell $40 million (3.9 per cent ) to $991.2 million. This was attributable to declines in advertisement revenue ($31.7 million or 4 per cent) and circulation revenue ($7.2 million or 3.6 per cent). “

MediaCorp has also seen profits fall. Today reports:  “MediaCorp has posted a 42.1 per cent decline in operating profit for the year ended March, partly because of a weak advertising market and investments in new product lines. Operating profit fell to $25.7 million from $44.4 million a year earlier. Group revenue fell 1.3 per cent to S$621.3 million.Net profit before tax was $55.7 million, including a gain on disposal of investment of $28.6 million.”

The cash cows – for that’s what both are – are eyeing new pastures. SPH will be setting up a $100 million New Media Fund and has engaged a strategy consultant to find new wheezes to make money and cut costs. That’s something to look forward to as long as there are no staff cuts at such a profitable company.