Separation from Media Will Let SPH Seize New Opportunities

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Commentary Debrief SPH restructuring Separation from media will let Seeking to balance interests SPH seize new opportunities of all the stakeholders was trading at a discount of 24 per future. And this is the lens through that the listed entity will now be Company can be transformed into 2 successful cent to this valuation. which one should view the unshackled from the Newspaper & More importantly, restructured SPH. Printing Presses Act which limits entities, with each playing in its own space post-restructuring, SPH The restructuring essentially any single shareholding in SPH, as Hiving off the media Fresh copies of property’s financial position paves the way for private and a media company, to 5 per cent. The Straits shareholders need to take into remains healthy. public funding of SPH media. It Also, given its stable of business will allow Times coming account when evaluating whether On a pro forma basis, H1 2021 can now focus on the news properties spread across various SPH to be freed from off the press at the $110 million to be given to the operating profit would have been business with fewer revenue geographies and businesses, SPH’s SPH Print Centre CLG is good for shareholders. almost 10 per cent higher, and constraints. earnings will likely be more stable some restrictions that last Monday. The restructuring will enable the full-year FY2020 operating profit Of course, there are concerns than they are now. With advertising listed company to carry on as a would have been 48 per cent about how these new sources of There is also the possibility that apply to newspaper earnings on the largely property-based entity, higher (excluding government funds could influence the with SPH shares now trading at decline and Ven Sreenivasan with some other assets. wage grants). reporting. But the media has learnt about 0.75 times NAV, it could companies by law. expected to Its portfolio includes a 66 per Despite being widely to report accurately on become a target of acquisitions. This would allow the continue on a cent stake in SPH Reit which anticipated, news of the commercial entities, even when it Alternatively, over time, the downward Associate Editor comprises Paragon, The Clementi restructuring has drawn some seeks ad funding from them. company could also attract strong company to pursue trajectory, it was Mall and The Rail Mall. It also strong reactions, not least among It will simply have to smartly cornerstone investors who can no longer holds an 85 per cent stake in netizens who question the way the navigate the challenges when the now hold more than a 5 per cent new opportunities, tenable for A lot of ink has been spilt and Figtree Grove, a freehold company has managed its media sources of funding diversify. stake. boosting returns for Singapore Press many opinions have been shared sub-regional shopping centre in business. If one were to look at media On a sum-of-parts basis, some Holdings’ media on social media about the Wollongong, New South Wales, Critics reckon SPH could have organisations such as the BBC and analysts value the listed company its shareholders. business to proposed restructuring of and 50 per cent in Westfield hired the requisite experts, The Guardian in Britain, Le Monde as high as $2.43 per share. That is a remain part of a Singapore Press Holdings. Marion Shopping Centre in acquired the necessary assets and in France, ABC in Australia or PBS whopping 53 per cent premium to publicly listed Under the plan, SPH would be Adelaide. moved more aggressively in the in the United States, they all work its current price. Tham Yuen-C company, where giving up 6.6 per cent of its assets SPH also owns and operates The digital domain. on a similar public-private Price targets for the stock vary it would be to a new entity, a company limited Seletar Mall and is developing a They may have a point. partnership model. But they have from $1.92 to $2.41 at the moment Senior Political Correspondent whittled down by guarantee (CLG). This means new commercial-cum-residential But, to be fair, SPH has spent maintained their credibility with – significantly above the current over time by SPH will give the entity $80 site consisting of The Woodleigh some $250 million on digital bold, balanced and believable news trading price. market pressure million in cash, $20 million in SPH Residences and The Woodleigh transformation initiatives over the reporting. And all have had regular But the listed property entity Singapore Press Holdings (SPH), and commercial Reit stock and $10 million of SPH Mall. last five years. In fact, 53 per cent run-ins with their respective has to address the market and which publishes The Straits Times, constraints, said treasury shares. It is also an owner, manager and of total media sales is via digital governments, but emerged with share its strategic vision and is restructuring its media business SPH chairman What this essentially does is developer of a portfolio of platforms. their credibility intact. mission for the future. amid a trend of falling advertising Lee Boon Yang ring-fence SPH and its property purpose-built student Yet, revenue fell 12 per cent The same will happen here. This Shareholders will want to know revenues for newspapers around on May 6. assets from being weighed down accommodation in Britain and between 2018 and 2019. The is something SPH Media will also how the value of its broad portfolio the world. We look at what’s behind ST PHOTO: by its very challenged media Germany. It currently operates decline accelerated to 31 per cent have to navigate. of assets differs from existing the move. DESMOND FOO business, whose print product has two distinctive brands, Student between 2019 and 2020. Much of Also, given that residents of property plays in the market. been in secular decline over the Castle and Capitol Students. SPH’s this is due to the fact that the other countries rely on the The “new kid on the block” will What’s happening past decade. aged-care business in Singapore is digitalisation effort has not been Singapore media for an accurate also have to explain its strategies Operating revenue in the past one of the largest private nursing enough to stave off the global “big picture – especially when major to enhance shareholder value. It On May 6, following a trading halt, five years has halved, and in homes, and it has also bought into boys” such as Google, Facebook events at home go under-reported might have to rebrand, SPH announced that it would trans- financial year 2020, the SPH a similar business in Japan. and others who have muscled into – there is strong potential for SPH re-engineer and even rename fer its media business to SPH Media media business posted its first ever The irony is that a bulk of these the news business, not just in Media to capture the regional itself. Holdings, as part of a restructuring loss. The first half of FY2021 has assets were purchased with the Singapore, but also globally. market digitally and become a The past is over. The present is exercise meant to ensure the long- seen the run-rate worsen further, profits from the media business Then there is falling newspaper pan-Asian player. still in play. It is the future that term sustainability of the media with a pre-tax loss of $9.7 million. during better days. consumption, mirroring a global Meanwhile, the listed SPH really matters. business. SPH media ad revenue fell 39 per The total value of all these assets trend, as news consumption entity, having obtained If executed well, SPH can move With advertising earnings on the cent from FY2018 to FY2020. would be in the region of some habits change. shareholder approval, will go forward boldly as two separate decline and expected to continue At this rate, it is quite likely that $4.33 billion, post-demerger. This But here’s the thing. forward as largely a property play, and successful entities, each with on a downward trajectory, it was no SPH’s media business will post gives the company a net asset The market is forward looking. freed of the media albatross its own space and playing at its longer tenable for the media busi- cumulative losses of well over value or NAV per share of $2.08, It does not spend time ruminating around its neck. own pace. ness to remain part of a publicly $100 million over the next two post-restructuring. over the past but looks to where What the market will be listed company, where it would be years. This is something SPH At last Friday’s close, the stock the opportunities are in the particularly interested in is the fact [email protected] whittled down over time by market pressure and commercial constraints, said SPH chairman Lee If one were to look at media Boon Yang. organisations such as the BBC and Under the proposal, SPH would provide the initial funding for SPH The Guardian in Britain, Le Monde in Media to the tune of $80 million in France, ABC in Australia or PBS in cash, $30 million in SPH shares and the US, they all work on a similar SPH Reit units, and stakes in four of Former coordinating Mr Khaw said the end goal was to public-private partnership model. its digital media investments. minister for infrastructure ensure that the Singapore media re- From 17 May 2021, SafeEntry The wholly owned subsidiary will mains trusted and can continue to But they have maintained their eventually be transferred to a newly and transport minister produce quality journalism under a credibility with bold, balanced can only be done with formed company limited by guaran- Khaw Boon Wan, known as sustainable business model. and believable news reporting. tee (CLG) for a nominal sum, pend- the “Fix-it” minister, will Thus, the independence and in- ing shareholders’ approval. tegrity of the newsrooms would be And all have had regular run-ins with TraceTogether App or Token The yet-to-be-formed CLG, SPH come out of retirement crucial in determining the success their respective governments, but Media Trust, will be free to seek to be chairman of the of the enterprise. funding from a range of public and “If you undermine that, you un- emerged with their credibility intact. new entity. This, along Methods of SafeEntry that Methods of SafeEntry that private sources. dermine what we are trying to The same will happen here. Dr Lee said: “The fundamental with talk of government achieve,” he added. “That is my posi- This is something SPH Media will will continue to be accepted: will be discontinued: issue that needs to be addressed is funding, has sparked tion. It is, to me, crystal clear.” also have to navigate. Also, given therefore this: the long-term viabil- concerns that the ity of SPH Media in its present struc- What’s next that residents of other countries editorial integrity of Tapping your Scanning of ture, subject to market pressures. rely on the Singapore media for Check-in Switch to check-out TraceTogether barcode on

Place TraceTogether App-enabled phone or Token near the screen Gateway settings “The media business is expected Mr Khaw said his key priorities for Scan Token or Photo ID newspapers in SPH an accurate picture – especially Enter ID manually App or Token on personal ID to be loss-making and face severe the new entity are to ensure a the SafeEntry would be compromised... * Will be discontinued financial challenges over the next smooth transition to SPH Media when major events at home go Gateway device from 1 June 2021 few years. SPH shareholders are although many Trust, make wages more competi- under-reported – there is strong not likely to tolerate the continued governments, including tive and improve working condi- negative impact that the media busi- tions in order to recruit and retain potential for SPH Media to capture across Europe and in Scanning the ness has on the company’s financial talent, as well as to enhance the the regional market digitally and Scanning the TRACETOGETHER venue’s QR TRACETOGETHER Australia, have been REQUIRED REQUIRED prospects.” user experience of SPH Media prod- become a pan-Asian player. Scan the SafeEntry QR code venue’s QR code using the SPH has received the Govern- ucts. code using funding newspapers By checking in, you declare that: -You have no close contact with a conﬁrmed COVID-19 case in the past 14 days *# - You’re not currently under a Quarantine Order or Stay-Home Notice * TraceTogether - You have no fever or ﬂu-like symptoms * - You agree to the terms and consent to the collection/use of your information for COVID-19 contact tracing ment’s approval in principle for – To ensure a smooth transition, * Not applicable if you’re seeking treatment at a Singpass App medical facility for years.Mr Khaw said # Not applicable to COVID-19 frontline workers App when the media business has been veteran journalist and former hived off – the lifting of restrictions the end goal was to ensure deputy chief executive officer of on its shareholdings and other as- that the Singapore media SPH Patrick Daniel was asked to pects of its business that are now im- return as interim CEO of SPH Me- remains trusted and can Presenting Scanning the posed on newspapers by law. dia Trust. QR code on TRACETOGETHER venue’s QR code continue to produce REQUIRED This will give SPH more flexibility The restructuring is expected to TraceTogether using phone to tailor its capital and shareholding quality journalism under be completed by September, pend- Token to be camera or other structure and “pursue strategic a sustainable business ing shareholders’ approval at an scanned QR scanners growth opportunities across its extraordinary general meeting in other businesses and maximise re- model. Thus, the early July. turns for shareholders”, said Dr Lee. independence and “In our strategic review, we have integrity of the newsrooms [email protected] carefully considered our options, Group check-ins will still be allowed weighing up the interests of each of would be crucial in our critical stakeholders, as well as determining the success Check-in Switch to check-out

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Scan Token or Photo ID the community as a whole. We have of the enterprise. Enter ID manually concluded that, on balance, restruc- Every person (over the age of 7) must show turing SPH Media and transferring Paragon mall in Orchard Road is one of SPH’s properties. The restructuring will give SPH more flexibility to tailor its capital and shareholding structure and pursue their TraceTogether Token or home screen of it to a CLG is the best and most ap- strategic growth opportunities in its other businesses, including retail property management and purpose-built student accommodation. ST PHOTO: DESMOND WEE the TraceTogether App when entering a venue. propriate option for all stakeholders.” born, but has also allowed tech be- enue is projected to decline. is funded by the Scott Trust, and the since multiple media organisations religious society, he added. Why it matters hemoths like Google and Facebook The same trend had been felt in Tampa Bay Times in the United were merged to form SPH in 1984 – Former coordinating minister for to siphon off a large proportion of Singapore, and as audiences across States, which is owned by the non- was debated in Parliament last Mon- infrastructure and transport minis- Ensure your TraceTogether devices are working In March, the company had fore- advertising revenues. all of SPH’s publications grew to a profit Poynter Institute. day, then Minister for Communica- ter Khaw Boon Wan, known as the shadowed the move when it an- In 2015, the media industry hit a historical high of 28 million, operat- The new CLG will be run on a tions and Information S. Iswaran “Fix-it” minister, will come out of nounced that it would undergo a milestone when global newspaper ing revenue halved. commercial basis, with all profits said a high-quality and respected retirement to be chairman of the strategic review to consider the op- circulation revenue exceeded Last year, although newspapers ploughed back and reinvested into media keenly attuned to Singa- new entity. If you are using the If you are using the tions for its various businesses. global advertising revenue for the gained record numbers of readers the business, enabling it to focus on pore’s unique circumstances is “es- This, along with talk of govern- TraceTogether Token, TraceTogether App, This came after the media busi- first time. seeking to keep abreast of news on its core mission. sential to the fabric of our nation”. ment funding, has sparked con- check for blinking turn on Bluetooth ness posted its first loss – of $11.4 With the rare exception of publi- Covid-19, media companies largely After the announcement, the He said local media help to inter- cerns that the editorial integrity of green light which and ensure your million – last year. cations with international audi- struggled to benefit from the boom. Government said it backs the pro- pret global events through a Singa- newspapers in SPH would be indicates that your App is updated to But even before that, the com- ences like The New York Times, the Over the years, traditional media posal. porean lens, give outsiders the Sin- compromised – a point several Token is working. latest version. pany had seen its takings shrink. growth in audience and subscrip- companies have turned to white It added that it was prepared to gapore perspective, and also pro- MPs, including Leader of the Oppo- Around the world, traditional me- tion revenue has not been able to knight investors or trusts to con- provide funding support to the new vide a range of views to inform the sition Pritam Singh, raised during dia companies have seen a similar overcome the decline in advertising tinue to survive. entity to help it with digital transfor- national debate and help foster na- the debate that lasted over an hour, decline, with advertising revenue revenue. As a general trend, consult- With the restructuring, the fund- mation and capacity building. tional consensus. although many governments, in- falling owing to digital disruption. ing firm PwC found that the more ing structure of SPH Media would When the restructuring – which The vernacular papers also help cluding across Europe and in Aus- The Internet has not only allowed digitalised a country’s newspaper be similar to those of publications represents the biggest shake-up of to sustain the common ground in tralia, have been funding newspa- more media organisations to be industry is, the faster its overall rev- like The Guardian in Britain, which the media industry in Singapore Singapore’s multiracial and multi- pers for years.