Singapore Press Holdings to restructure media business into a not-for-profit entity

Print and digital media organization Singapore Press Holdings (SPH) announced it will be shifting its media business to a not-for-profit entity as it sees falling advertising revenue.

Photo credit: Singapore Press Holdings

The move involves SPH moving its entire media-related businesses to a newly incorporated and wholly owned subsidiary called SPH Media Holdings. The not-for-profit entity will be a newly formed public company limited by guarantee, according to a statement.

Pressed by Tech in Asia, former dean of Nanyang Technological University’s Wee Kim Wee School of Communication and Information, Ang Peng Hwa said he sees the move as a way of privatizing profits and socializing losses.

SPH shared the move comes after its media business recorded its first-ever loss of S$11.4 million (US$8.53 million) for the financial year ended August 2020. For the six months ended February 2021, the company said its pre-tax profit fell by 71% to US$2.32 million compared to the same period last year.

SPH also said that it has been increasing its investments in technology and new consumer-facing digital platforms over the past five years. While this has resulted in the company nearly doubling its monthly unique audience, its digital subscription and digital advertising revenues have been unable to offset the decline in its print revenues.

The company shared that even with the resumption of business activities after lockdown, it expects advertising revenue to continue declining in the coming years.

Ang said that the decline is not isolated to SPH’s case and can be felt globally. This falls in line with the findings from a recent World Advertising Research Center report saying it will take years for the global ad market to recover from the Covid-19 pandemic, which is still ravaging some countries in the region.

The new entity is set to house relevant subsidiaries and employees, SPH’s news and print centers along with their respective leaseholds, as well as all related intellectual property and information technology assets, said the company in a statement.

SPH also said it will provide the initial resources and funding for SPH Media, with a cash injection of US$59.9 million, US$22.4 million worth of SPH shares and SPH REIT units, and SPH’s stakes in four of its digital media investments.

“[SPH Media] 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,” said SPH’s chairman Lee Boon Yang.

Currency converted from SG dollar to US dollar: US$1 = S$1.34.