M&G crippled by cash crunch

Wave of retrenchments as new strategy fails to balance budgets

BAD business decisions at the cashstrapped Mail & Guardian have led to the newspaper’s biggest round of retrenchments yet, leaving the future of one of South Africa’s oldest independent newspapers in the balance.

Tomorrow the company is expected to close its voluntary severance process. Initial plans were to cut 16 editorial staff and nine people from other divisions.

A string of investment decisions has not paid off for the paper’s ambitious owner, Trevor Ncube.

Ncube has been pursuing a PanAfrican media strategy to expand into growing markets, recently launching M&G Africa in Nairobi. This caused friction within the M&G, with some believing Ncube was subsidising the move at the expense of the struggling South African business.

Ncube’s digital strategy has also yielded little. Consultants have recommended that he cut his multimedia team and the unit responsible for uploading content onto iPads.

Other worrisome decisions include halting the paper’s publication in Zimbabwe and publishing premium content online several hours before the printed version became available.

Ncube also clashed with the amaBhungane unit over nonpayment for its investigative content and a letter the unit wrote to potential buyers of the newspaper that Ncube believed painted him unfavourably. The friction led to the plan being scuppered.

The internal ructions add to the difficulties of growing market share in an environment where media houses are competing for a shrinking advertising pie and for market share in newer platforms that could yield growth in future.

The M&G’s circulation fell by 23% in the past year, compared with an average drop of 4.6% for other weekly publications in South Africa.

M&G CEO Hoosain Karjieker said the publication could lose about 25% of its government advertising. “We get the sense the government doesn’t want to advertise specifically in M&G and it’s something we need to take up with government and understand exactly why they’ve taken that position with us,” he said.

Anton Harber, Caxton professor of journalism at the University of the Witwatersrand and founding editor of the weekly, was aware of its financial pressures, which he said were aggravated by the government diverting its advertising to outlets “seen to be less critical and outspoken”.

Ncube remains optimistic about the investments made, saying he was excited about the M&G moving into Africa, and he was comfortable with the progress made to date.

But new entrants such as African Independent, launched by Iqbal Survé’s Independent Media last week, threaten a shake-up of the industry.

This week the M&G lost its editor, Angela Quintal, who left to pursue other interests.

The reasons for her departure are unclear, but sources say she was unhappy over constant cost-cutting, which threatened the quality of the newspaper. “After two years as M&G editor I’m taking a Great Leap Forward into the unknown 2 consider new horizons — learning Mandarin isn’t one of them,” she tweeted on Monday.

Her departure comes four months after the resignation of Chris Roper, head of M&G digital.

Karjieker said the company hoped to appoint a new editor next month after a recruitment process.

But the challenge now is to return the business to profitability.

“This is a challenge, but we are making steady progress to deal with this,” said Ncube.

William Bird, director at Media Monitoring Africa, said: “We know the model for traditional media revenue streams is broken.”

Revenues from digital markets “appear to have plateaued”.

“We’re in desperate need of funding, and new and better models of sustainable journalism.”

Bird said that in recent years the government had been deepening its relationship with community newspapers, while spending less on larger, more established publications.

Harber said he was saddened by the state of the publication but hopeful it could find its way again. “It is a crucial part of the media mix and our whole society and democracy would be much the worse off if we lost this independent voice.”

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M&G’s circulation fell by 23% in the past year, compared with 4.6% for other weekly publications