/ 13 August 2010

Funding the JZ Times

The arrival of a new newspaper on the scene always evokes interest, not only among newspaper people. There has been keen interest in the arrival next month of The New Age (TNA), best described as a Zuma-aligned newspaper because its backers, the Gupta family, are closely associated with the president and his family.

The Mail & Guardian reported that the Guptas all but took over Zuma’s recent visit to India. The Guptas have also reportedly described one of Zuma’s sons, Duduzane Zuma, who shares mining interests with them, as their own son too.

TNA is unlikely to be yanked in front of the ANC’s mooted media tribunal. The paper will unabashedly publish sunshine journalism. It remains to be seen if and how it will report on such stories as the president’s love children and the oyster-and-champagne lifestyles of some of our ministers.

But when people discuss start-up newspapers the talk quickly moves to money, because it costs a ton to set up one of these. TNA backer Atul Gupta has indicated that he has deep pockets. It is understood that R175-million a year will be invested in the formative years.

Its critics believe that its prime purpose will be to put a rosy spin on the ANC in general and its president, Jacob Zuma, in particular. TNA will perhaps be there to help Zuma seek re-election, these critics believe.

The Gupta brothers, Ajay, Atul and Tony, are the drivers behind the successful Sahara computer brand, having settled in South Africa from India in the early 1990s. They have deep pockets but deeper political connections.

The numbers are not yet all available but it appears that the Gupta family and its allies will make up about half of the so-called strategic shareholders that ArcelorMittal has brought in. They will also get about half of the R800-million on offer from the steel giant should Imperial Crown Trading convert its prospecting right at Sishen to a full mining right.

A peculiarity of this deal is that ArcelorMittal appears to be doing little more than renting its BEE partners for four years to meet its BEE obligations. At this point it will buy them out at a combined price of between R900-million and R2,1-billion, depending on the performance of its share price. This gives the Gupta interests more than a nice chunk of change to be able to fund its newspaper.

When it hits the streets I will not think of it as The New Age. The Iron Ore Times or the Zuma Times will be more apt.