SPH to relieve newspapers of shareholder expectations

May 11, 2021 at 12:37 pm by admin

With more and more of its net worth based on its real estate investments, Straits Times publisher Singapore Press Holdings has unveiled a plan which will see its core media business virtually given to a new not-for-profit.

SPH financial masthead the Business Times says the move is a response to falling advertising revenue.

In better times, the publishing group – always at pains to state that it is not government-controlled although it operates under rigid guidelines – had looked to property to channel profits for a better return than it expected from publishing.

Stock exchange listed in 1984 – as the holding company for Times Publishing (later divested), The Straits Times Press (1975), Singapore News and Publications and Singapore Newspaper Services – SPH started investing in property in 1996 when it bought Two buildings for S$852 million which it was later to redevelop as Paragon. Its spectacular entry into property development came in 2007, with the Sky@eleven condominium on the former Times industrial building site, with all 273 units snapped up within 30 hours.

After winning a tender for the Clementi Mall in 2009 through a joint venture with NTUC, it listed Paragon and Clementi in a new entity as SPH REIT in 2013. Most recently, it has expanded into student accommodation in Germany and the UK, aged care facilities in Singapore and Japan, and last year joined Keppel Data Centres for a data centre development on the site of its former headquarters in Genting Lane.

This year with the merger of SingEx Holdings and its Sphere Exhibits, SPH will hold 40 per cent of the resulting SingEx-Sphere, with government-owned Temasek holding the remaining 60 per cent.

The strategic plan – announced in March – sees all SPH’s media-related business of SPH will be transferred to a newly incorporated wholly-owned subsidiary called SPH Media Holdings, which will be capitalised with S$80 million cash, S$30 million in SPH shares and SPH Reit units, and the group’s stakes in four digital media investments. A statement said all relevant subsidiaries and employees, the News Centre (pictured) and Print Centre and their respective leaseholds, as well as all related intellectual property and IT assets, were included.

Eventually SPH Media will be transferred to a not-for-profit entity – a new public company limited by guarantee – "for a nominal sum", with its profits reinvested into media operations.

Chairman Lee Boon Yang said on Thursday that this would free the media business from the “expectations of shareholders for a fair financial return and regular dividends”.

In going the NFP route, SPH is following the example of others including the Guardian in the UK – transferred to the Scott Trust in 1936 – and the Tampa Bay Times in the US, which belongs to the Poynter Institute.

Sections: Newsmedia industry


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