Independent Media’s future uncertain as Sekunjalo pulls funding plug
· Citizen
After pouring what it says is more than R5.2 billion into Independent Media and related media businesses over the past decade, Sekunjalo Group has pulled the funding plug, throwing the future of the newspaper company into doubt.
Also in doubt are titles such as the Cape Times, The Star and The Mercury. Sekunjalo says Independent Media’s licence to use these mastheads expires at the end of July.
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Sekunjalo Group CEO Lucien Jacobs said it was too early to comment on the future direction of the loss-making Independent Media beyond July, although discussions are taking place with key shareholders to find sustainable solutions.
These include the Public Investment Corporation (PIC), the Southern African Clothing and Textile Workers’ Union (Sactwu) and Interacom.
No longer viable …
The media company has been informed that it can no longer rely on financial support from Sekunjalo. “As a result, the company’s ability to continue operating as a viable business is now uncertain,” said Jacobs.
Independent Media was acquired from Dublin-based Independent News & Media in 2013 in a transaction valued at R2.1 billion. Sekunjalo’s statement says R1.2 billion was invested by the Sekunjalo consortium and R880 million was provided by the PIC.
The Mpati Commission of Inquiry, set up in 2018 to investigate allegations of impropriety and poor governance at the PIC, put the state-owned asset manager’s exposure to the transaction at up to R1.44 billion through a 25% equity investment and two loans.
The PIC received back R325.75 million after the transaction was restructured. Sekunjalo says it subsequently invested another R1.8 billion directly into Independent Media, while R2.2 billion went into other media and technology businesses within the group.
‘Independent Media no longer commercially sustainable’
In a statement issued this week, Jacobs said the executive team had concluded that continued funding of a loss-making Independent Media was no longer commercially sustainable.
“The executive team and I have adopted a fundamentally different approach from previous management. While previous leadership continued funding Independent Media despite sustained losses in order to preserve jobs, support journalism and promote media freedom, our responsibility is to ensure that the business operates on sound commercial principles.”
All future investment and product decisions relating to the group’s media assets will be guided by commercial sustainability, he added.
“After investing more than R5.2 billion over the past decade, we believe we have fulfilled our commitment to preserving one of South Africa’s most important media institutions. We will now invest on our account and not to benefit other shareholders. We are committed to continuing to invest in our own 100 percent-owned media operations.”
Tragedy
Anton Harber, professor of journalism at Wits University, describes the development as a tragedy.
“It’s a tragic story to see what looks like the collapse of what was once the country’s biggest newspaper group. It’s been misused and abused for some time.
“Even though things are tough for all newspaper groups, this group has been manhandled by its owners,” he said.
It’s still unknown what impact this announcement will have on staff. In messages seen by Moneyweb, one long-serving employee wrote: “And so it has come to pass. I know not the longest, but I would have been there 40 years come August 1. I thought I’d retire from there. How naïve.”
Controversy
Sekunjalo has never been far from controversy.
The PIC’s role in the 2013 acquisition drew fire because it funded a substantial portion of the transaction by purchasing 25% of Independent Media while also lending money to the company and the Sekunjalo consortium acquiring control.
When it became clear that the loans would not be repaid on time, then-PIC CEO Dan Matjila signed a proposed arrangement to exchange the Independent Media debt for shares in another Sekunjalo-linked company, Sagarmatha Technologies.
The arrangement was never implemented after Sagarmatha’s planned JSE listing collapsed. The Mpati Commission found that Matjila had signed the agreement without the necessary authority and contrary to conditions imposed by the PIC’s relevant investment panel.
Digital extracting value from news
Independent Media’s company-specific difficulties have unfolded against a punishing industry backdrop.
Readers have migrated from print to digital formats, with advertisers in tow – but not all the advertising revenue has followed local publishers online. Much of it now goes to Google, Meta, TikTok and other platforms rather than the organisations paying journalists to produce the underlying news.
This prompted the Competition Commission to hold an inquiry between 2023 and 2025. It found that print advertising revenue across three large publishers had declined by 38% in the five years from 2018, and that “digital platforms have extracted much of the value from the news media”.
The inquiry found that tech giants like Google and Meta exerted significant control over search, social media distribution, data and digital advertising.
Google and YouTube agreed to a R688 million support package over five years through content-licensing agreements, innovation funds, training and technical assistance – all aimed at helping publishers develop more sustainable digital businesses.
But that may be cold comfort for the once-mighty publishing houses that set the tone of the national debate for decades.
Most have scaled down or closed titles altogether.
End of the road
Media24 stopped printing Beeld, Rapport, Daily Sun and City Press at the end of 2024, leaving Die Burger and Son as its only printed newspapers, and closed the remaining City Press newsroom in 2026.
Arena Holdings has restructured its operations and came close to folding Financial Mail into Business Day, while the Mail & Guardian has proposed cutting nearly half its small permanent newsroom.
The digital-only Vrye Weekblad closed in 2025 after failing to establish a sustainable revenue model.
This article was republished from Moneyweb. Read the original here.