Hiving off SPH's media business will help accelerate its digital transformation efforts: Iswaran

Transferring the media business to a CLG will further allow SPH to apply technology to deliver products  valued by customers and readers, said Mr Iswaran.
Transferring the media business to a CLG will further allow SPH to apply technology to deliver products valued by customers and readers, said Mr Iswaran.ST PHOTO: GAVIN FOO

SINGAPORE - Moving Singapore Press Holding's (SPH) media business out of a listed company structure will allow it to dedicate the necessary resources to pivot to a digital model in a "more purposeful and quick way", said Minister for Communications and Information S. Iswaran.

He told the House that while SPH is already doing so, transferring its media business to a company limited by guarantee (CLG) will also further allow it to apply technology to deliver products that are valued by customers and readers, as well as find new revenue sources arising from that.

It will also enable SPH Media to bring in talent to directly address the issues it faces, and make "decisive strategic moves" to achieve these goals, he said on Monday (May 10) in response to questions from MPs, including Ms Jessica Tan (East Coast GRC).

The minister, who had delivered a ministerial statement on SPH's proposed restructuring, noted that support from the Government will also be important in accelerating this digital pivot.

Ms Mariam Jaafar (Sembawang GRC) asked about how SPH Media will maximise the opportunity for a fresh start, and whether there is an ambition within the CLG to think of the new entity more as a start-up, rather than from an "incremental" line of thinking.

Mr Iswaran said the new media entity should have both the zest, energy, invention and drive of a start-up, as well as the credibility, trust, quality, and talent that has been nurtured throughout the years.

"It's not about jettisoning everything, and starting from scratch. But neither is it about being so hidebound that we are not prepared to discard some of the older or long-held propositions from a business point of view in order to pursue new ideas... I think we need a bit of both, or rather, we need a lot of both."

He said SPH's existing talent pool will be just as important as other people who will be hired in due course.

"The people who have been with the organisation - the journalists, the editors, the other staff, they bring a very valuable perspective, and I think that has to be a part of the equation going forward, just as we need to bring in... others who will be able to contribute and complement (transformation efforts)," he said.

The issue of how to bring together a team with the best capabilities to maximise success for the new venture will be something the CLG's new chairman - former minister Khaw Boon Wan - and his team would be faced with.

This includes the process of finding an appropriate chief executive and filling other talent requirements.

How the company limited by guarantee was decided

Mr Liang Eng Hwa (Bukit Panjang) asked how the Government arrived at the view that the CLG structure is the best option, and whether it had considered other options such as privatising SPH.

In response, Mr Iswaran noted that the proposal came about as a result of SPH management and board assessing their media business and its prospects going forward, and then putting forward its recommendation.

Stressing that the proposal has to be approved by shareholders, he said the Government supports the move not because of its value proposition to shareholders, but rather what needs to be done to secure the long-term sustainability of a quality and trusted news media in Singapore.

On privatisation, he said the larger issues around the business, its viability and decisions on what can be done for shareholder value are ultimately things the SPH board and management has to decide on.

Mr Iswaran reiterated that the Government's involvement pertains only to decisions that affect the sustainability and trust of local media, rather than shareholders.

Mr Liang had also asked if public service broadcasting funding could have been channelled to SPH, in the same way that this is provided to Mediacorp annually.

Mr Iswaran said that while this is possible, it is debatable whether this is a good model.

If a certain amount of funding is channelled to the listed company which then makes profits that are distributed to shareholders as dividends, "the question that then can be asked is, is this a case of taxpayers subsidising returns to shareholders?" he noted.

"I don't think it is a straightforward solution... it is fraught in its own way," he said.

Read key highlights of the ministerial statement on SPH media restructuring here