Independent Media has announced that it is set to restructure in response to banking threats and rising operational costs. Independent Newspapers will restructure across several of its business units as part of its ongoing efforts to address the challenges within the business and broader media environment.
The company says that it has determined that further restructuring is critical to its long-term sustainability.
According to Independent Media, print media has come under severe pressure in recent years — a trend seen across the industry. The unsustainability of print, coupled with the dramatic decline in advertising and circulation revenue, is forcing many media houses to rethink their traditional models.
This is evident in the decision by Media24, one of South Africa's largest media companies, recently announcing the closure of four of its print titles, citing similar challenges. Consumers are increasingly turning to digital platforms for news consumption, leaving print publications struggling to keep up with these shifting dynamics, the company adds.
A central factor driving this decision is the looming threat of a potential closure of banking facilities. Independent Newspapers's reliance on advertising and circulation revenue, coupled with its lack of access to loans or banking facilities, places the business in a precarious financial position.
The risk associated with losing banking support, particularly given the company’s cash-based operations, poses an existential threat. The restructuring is therefore essential to securing the company’s future and mitigating these banking risks, says Independent Media.
In addition to banking concerns, rising operational costs — especially those related to paper and print, which now account for 60% of the company's expenses — and shifting audience preferences toward digital platforms, have further underscored the need for restructuring, according to the company.
Executive Chairperson of Independent Media, Dr Iqbal Survé, says that the cost of running print titles has become unsustainable for Independent Media, Sekunjalo, and the Survé family, who have personally bolstered the publishing company over the last few years.
"Print media has been an iconic pillar of our company for decades, but the current business model is no longer sustainable in a world where digital platforms offer far greater reach and engagement opportunities," adds Survé.
Survé says that while every effort would be made to mitigate the effects of the restructuring, not all employees would transition into the expanding digital division.
"We will assist with transitions wherever possible," adds Survé.
Independent Newspapers concludes that it is committed to ensuring that the restructuring process is managed transparently and fairly. Consultations will take place in accordance with the Labour Relations Act, and no final decisions have been made at this stage. The company will explore all possible alternatives to avoid retrenchments and will seek ways to support employees affected by these changes.
For more information, visit www.independentmedia.co.za.
*Image courtesy of Independent Media