Caxton to oppose Media24’s sale of its distribution business to Novus

Publishing group Caxton will oppose Media24’s sale of its distribution business, On the Dot, to Novus Holdings at the Competition Commission.

Novus is one of southern Africa’s most prominent print, publishing and packaging groups. It has a longstanding relationship with Media24 and prints all of Media24’s newspapers.

Media24 announced the transaction, which is dependent on approval from the commission, when it revealed that it is “considering” closing the print editions of several of its established titles – including Beeld, Rapport, City Press and the Daily Sun. The restructuring is likely to lead to 400 job cuts.

Moneyweb earlier reported that Media24 had taken a firm decision to close the newspapers.

On the Dot distributes Media24’s newspapers and magazines to sales outlets and homes nationwide, and would be severely affected by the closure of the print editions.

Media24 restructuring will have ‘devastating effect’ – Caxton

“The spin of Media24’s press release seeks to disguise the devastating effect that the Media24 newspaper closures will have on news reporting in South Africa,” says Paul Jenkins, chair of Caxton and a non-executive director of Moneyweb.

“The decision to close the titles is a fait accompli, and Media24’s claim that it is merely considering closure belies the truth.”

Jenkins says Media24 has been touting the sale of On the Dot for a number of months, and represented to one potential buyer that the newspaper closures were on the direct instruction of Naspers chair Koos Bekker.

Media24 CEO Ishmet Davidson denied this and said Media24’s board, of which Bekker is a non-executive director, approved the proposed restructuring.

ALSO READ: Beeld shutdown timeline shocked editor amidst 50th celebrations

Media24 print exit: ‘Pre-determined’ and ‘anti-competitive’

Jenkins says the deal with Novus to take over On the Dot – with a “sweetener” of the Western Cape community titles thrown in – is part of Media24’s pre-determined exit from print.

“In Caxton’s view, closure is not the only viable alternative, and numerous parties would be in a position to acquire these titles and save them, as well as the hundreds of jobs that will now inevitably be lost.

“Caxton considers that the closure of the newspaper titles and transition to digital-only is premature and a sad way for Naspers to end nearly a century of newspaper publishing.

“The transaction with Novus is anti-competitive, a blow to democracy at this pivotal time in South Africa’s history and definitely not in the public interest.

Caxton will oppose it at the Competition Commission.

Print titles ‘not for sale’

Regarding selling the print titles, Davidson says Media24 would not consider any offers for the mainstream newspaper titles that already reside in some digital format on either of what he terms “our two hero digital news platforms” – News24 and Netwerk24.

Media24’s statement earlier this week said it would start with consultations with affected staff and expects the process to be completed within three months.

The last day of publication of the printed newspapers is set for 30 September.

ALSO READ: Media24 shakeup: Hundreds of job losses loom as major newspapers face closure

“We anticipate that the proposed restructure could result in at least 400 job losses, with 400 more positions transferring to Novus Holdings with the sale and some roles possibly needed beyond 30 September,” it said.

“We also intend reducing our corporate and support services and operational costs in line with the changes made in our business.”

The statement said Rapport, City Press and the Daily Sun will become digital-only brands.

“In South Africa, like elsewhere in the world, consumer preferences have changed. People now read more news than ever, but most prefer to do so on their cell phones or laptops, and publishers have to comply with their preferences.”

• Read the original Moneyweb article HERE.