Trevor Ncube, new owner of the Mail & Guardian, warns that South Africa’s political climate bears resemblance to the situation in Zimbabwe a decade ago.
His counsel is not given frivolously. Ncube is also the publisher of two newspapers north of the border. His editors on the dark side of Beit Bridge are habitually harassed by Mugabe’s henchmen, and on occasion the contingency being whether the regime woke up feeling especially unconstitutional thrown into prison. So when Trevor Ncube points to similarities between the ‘intolerance’ of the ANC and that of Zanu-PF in the early ’90s, when he states that South Africa is yet to emerge from a ‘honeymoon phase’, he is speaking as the majority shareholder and CEO of the Zimbabwe Independent and The Standard two Harare-based newspapers that have vigilantly monitored Robert Mugabe’s descent into dictatorial dementia.
While Ncube’s observations may set certain corners of South Africa to squirming, they do draw attention to a fact largely ignored in the mainstream press the man clearly has the ideological credentials to carry the M&G legacy. All signs are that Trevor Ncube can re-invigorate the M&G’s tradition of quality investigative journalism. If he proceeds with the same obstinacy and grit exhibited in Zimbabwe, where a commitment to journalistic integrity is nothing if not hazardous, Ncube could lead the weekly to standards of reporting not seen since the era of founding editor Anton Harber.
Also largely ignored in the mainstream press is the fact that the region’s new cross-border newspaper boss has strong commercial credentials. “The Zimbabwe Independent has been profitable all along,” says Ncube, emphasising his shareholding in the newspaper since launch. His argument on the second Zimbabwean title is as persuasive. “When I took over at The Standard in 1997 it was loss-making, with a circulation of 23,000 per week. I built that to 45,000 inside two years.”
But the 39 year-old will be severely stretched in South Africa, and the jury is still out on whether his experience is enough. There is already a deep dissatisfaction in parliament about his political comparisons. As the proprietor of a paper that is perceived as anti-ANC, Ncube will need to stare down the grumblings. Equally important, it’s time the M&G started paying the bills. Although growth cycles are lengthy with serious newspapers, after seventeen years in operation the M&G has yet to show profit on a single fiscal year. Launched as the Weekly Mail in 1985, its ‘proof-of-concept’ window is closing.
The M&G’s bleak financial record is not for lack of trying. Attempts for profit driven by strategies to create wider circulation and a larger base of advertisers have been impressive. In June 1990, the Daily Mail was launched in a bold bid to take over where its namesake the Rand Daily Mail left off (co-founders Harber and Mannoim were refugees from the latter). It soon became apparent that the more frequent variant simply compounded losses and the Daily Mail was closed in August 1990. Then in 1994 the UK’s prestigious Guardian group spotted the pool of newspaper talent to the south, and they sallied forth with an elaborate long-term strategy and the financial muscle to sustain it. The Guardian group sallied back home a couple of months ago. There was also the award-winning electronic M&G, launched in 1995 as Africa’s first online news source. 65 percent was sold off to M-Web in 1997, which was quite fortuitous as it bled cash along with the rest of the news sites in the bubble years.
In recent years the losses have been mounting. Last year the M&G posted a record loss of R12 million against combined losses for the ten years to 2001 of R42 million. Ncube can hardly point to the depressed advertising market when he looks for answers to the increasing damage. Although the Sunday Independent, the M&G’s main competitor in the weekly space, saw advertising revenue drop from a high of R9,8 million (July1998 to June1999) to R4,8 million (July 2001 to June 2002), the M&G witnessed a comparable rise in revenue for the same period from R8,3 million to R11,2 million (source: AdEx Nielsen Media Reasearch). Neither is circulation to blame. The M&G has shown steady growth on its ABC statistics over the last decade, while the Sunday Independent has hovered either side of the 40,000 mark since early after launch. (Last year the M&G came in ahead of the Sunday Independent for the first time).
Evidently, the M&G’s losses are not a cyclical phenomenon. The culprit is the very thing that has earned the M&G its reputation and loyal core of readers quality journalism. According to M&G management, editorial consumes 60 percent of total operational expenditure. If that figure were cut in half, the M&G would just about break even.
Evidently, the M&G’s losses are not a cyclical phenomenon. The culprit is the very thing that has earned the M&G its reputation and loyal core of readers quality journalism. According to M&G management, editorial consumes 60 percent of total operational expenditure. If that figure were cut in half, the M&G would just about break even.
There’s the dilemma. Top end newspapers, to retain their credibility and build on their niche, need to be staffed by a team of experienced journalists, who need to be backed-up by a pool of experienced researchers with access to first-rate resources. Of all South Africa’s newspapers, dailies as well as weeklies, the M&G is the title that can least afford to cut editorial costs. The paper sells itself to advertisers on the basis that it has the most educated readership in the country (AMPS2002A shows that 46 percent of the M&G’s readers have tertiary qualifications). Says Trevor Ncube: “We are a niche market publication targeting a high net worth readership. Our readers are very discerning and highly educated. The latest AMPS figures show that 53 percent of our readership are black.”
It’s an unenviable catch-22. Cut the editorial staff and you risk losing the niche, stay with the editorial staff and you don’t break even. Ncube’s predicament is further compounded by the fact that he doesn’t have the backing of a group like Independent PLC. The Sunday Independent leans on Tony o’ Reilly’s conglomerate for financial assistance and draws editorial from an international pool of journalists. Launched in 1995 and ten years younger than the M&G, the Sunday Independent is at a much earlier stage in its growth cycle it will be given time. The UK’s Guardian group, on the other hand, retains only 10 percent in the M&G after the sale it has already put in the time and is unlikely to put in more cash. With this in mind, Ncube reads his 2001 losses next to combined revenue (circulation and advertising) of R23million. The stark reality is that building the niche costs him just shy of R2million on editorial per month.
So what does Ncube plan to do about it? One intention is to go after the upper end of the market more aggressively. Ncube says his paper is the ideal platform for advertisers seeking a quality market and is not fazed by the 8 percent drop in ABC circulation figures for the first six months of 2002, pointing out that the drop came off the lower LSMs. Turnaround will be eventually be achieved, he says, by an increase in the educated and upper LSM circulation base, exploitation of a regional advertising base, and cut in litigation costs. “We are budgeting for a loss in 2002 and 2003, and aim to achieve turnaround at the end of 2004.”
Some elements of the strategy worry founding editor Harber, though he fully supports Ncube in the larger mission. On an open panel held at Wits recently, Harber pointed to the tendency of an increased circulation to compound losses. He was equally sceptical about the existence of a regional advertising base. On the need to cut litigation costs, Harber expressed concern that Ncube had “given comfort to some of the paper’s enemies.” “It is one thing to criticise mistakes which lead to losing litigation,” he said to Ncube, “but in the run of things the editor will need to know that you defend him or her against litigation that is malicious and wrong.”
Also on the panel that day was Saki Macozoma, CE of NAIL and member of the ANC National Executive Committee. Macozoma didn’t have much to say on the strategy, but he did explain why NAIL declined to bid for the M&G. At the time, the group was looking into a transaction that involved the takeover of Kagiso Media. “Besides, personally I didn’t relish the responsibility,” Macozoma added. It’s not certain whether Macozoma was referring to the ideological or financial variant asked later for his response to Ncube’s discomforting political comparisons, he smiled and used the word ‘zanu-isation’.
Ultimately, Trevor Ncube has a responsibility to both components in the prestige versus profit equation. He adds the M&G to his stable at a time when the South African government is looking to centralise administration, when interventionist policies in the economy are being stepped up, when the cabinet is making unilateral decisions to give itself satellite television channels. These things are happening, to borrow Harber’s words, “as we watch newspapers move more and more down-market and invest less and less in good solid reportage.” The M&G is one of the few newspapers that can stand above the crowd. In Trevor Ncube, the M&G has a CEO who stated openly, in the heart of the Zimbabwean capital, that Mugabe is “worse than Ian Smith.” The M&G has a man once fired as editor of a Zimbabwean newspaper for, amongst other transgressions, allowing Mugabe to be referred to as “the chairman of Robbers and Muggers.” Trevor Ncube has the chutzpah to go for gold. If his political observations are anything to go by, it may be imperative that he does.
Anton Harber on The Guardian’s tenure:
“[The M&G] was given (literally) to The Guardian in trust, as they appeared to be committed to keeping the paper and its spunky spirit alive; sadly it was a trust they betrayed through that combination of arrogance, paternalism and ineptitude that a certain class of Englishman has perfected over many centuries. They were generous in giving the paper money, but did so in a way that undermined almost everything else it had – its pride, its spirit, its self-confidence, its credibility, its entrepreneurial spirit, its most dedicated staff, its loyal friendships … many of the crucial elements of a successful newspaper. Ironic, isn’t it, that the paper has been brought to this precarious state not by any of its traditional enemies, but by its traditional allies?”