Josephine Teo Explained Why Gov Will Still Fund SPH Despite Circulation Saga

Last month, The Straits Times reported that SPH Media Trust (SMT), which publishes The Straits Times, found that circulation numbers had been overstated following an internal review.

If you didn’t know, circulation data refers to a count of the number of copies a publication distributes via regular subscriptions or purchases off-the-shelf. On the other hand, readership is an estimate of the number of readers a publication has.

Of course, this was a big hoo-ha.

Minister of Communications and Information (MCI) Josephine Teo has since come out with an explanation.

Incident Does not Affect the Government’s Decision to Fund SMT

According to Mrs Teo in Parliament on 6 February, though there has been an overstating of circulation data, this incident will not affect the Government’s decision to fund SMT.

She also clarified that no public money had been lost due to the incident.

The Government pledged to start funding SMT in 2022, while SMT’s internal review covered data between September 2020 and March 2022.

Mrs Teo emphasised that the Government’s reasons for funding SMT remain valid even after the incident.

Reasons for Funding SMT

In 2022, the Government committed to funding SMT with up to $180 million annually over five years. 

That’s around $900 million in total.

The decision was made after the issue was debated in Parliament in 2021 and 2022.

There were a few reasons why the Government decided to fund SMT.

The funds are meant to support SMT in digital transformation, capability development and to sustain vernacular newsrooms.

Mrs Teo mentioned that it is crucial to ensure the survival of SMT in a time of disruption to the media industry, especially when the Internet has made it easy for information to reach and influence the local audience.

In addition, she noted the long-term public interest in preserving local news media and needing to be equipped for a time when news consumption is mainly done online.

Furthermore, though the readership of vernacular news is smaller and more difficult to sustain, it is crucial to provide credible news sources that cater to Singapore’s multiracial society.

She also said that the circulation numbers of SMT’s publications were not a key consideration when it came to assessing the amount of funds the Government would provide to the media company.

What is SMT?

In December 2021, SPH was split into two entities.

One entity would continue making money through properties, while the other would lose money from the media industry.

If you haven’t caught on, the latter entity is SMT.

Basically, SPH Media became a not-for-profit entity, a company limited by guarantee (CLG).

SPH had initially expressed its intent to transfer SPH Media to a CLG in order to secure funding from both the public and private spheres.

SPH shareholders eventually approved this move in September 2021.

Besides The Straits Times, SPH Media also publishes The Business Times, Lianhe Zaobao, Shin Min Daily News, Berita Harian and Tamil Murasu

The Government decided to fund SMT so that Singapore’s media landscape remains intact and we still have news to read.

Funding is especially crucial in this transition period, in light of the global media industry suffering from decreasing advertising revenue and losses.

A Recap of What Happened

The internal review was initiated shortly after the split, where discrepancies were found in the company’s circulation data.

The review found that circulation numbers for some of the company’s publications had been overstated by about 85,000 to 95,000 daily average copies.

A difference in a few copies could be attributed to an honest mistake, but an overstatement this big is a little suspicious.

The review discovered that lapsed contracts continued to be counted into circulation numbers.

More horrifyingly, newspaper copies were printed, counted and then destroyed, inflating the circulation numbers by up to 12%.

Since then, senior SPH Media staff have been taken to task or have left the company. 

However, they continue to remain unnamed. 

Advertisement Rates Not Based on Circulation Numbers

One of the reasons why this incident was such a hoo-ha is due to the concern about advertisement rates.

However, SPH Media Group’s chief executive officer Teo Lay Lim clarified that SPH Media’s advertising packages are not based on circulation data.

Ms Teo reassured partners and clients that the company’s advertising packages are based on the reach and readership of both individual titles and SPH Media solutions as a whole. 

In Parliament, Mrs Teo noted that readership and reach are measured through third-party surveys.

This includes research agencies like GfK, external sources like the Reuters Institute for the Study of Journalism at Oxford University and Government surveys.

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Will Legal Action be Taken? 

When asked by Mr Zhulkarnain Abdul Rahim (Chua Chu Kang GRC) and Mr Louis Chua (Sengkang GRC) if legal action would be taken against SPH Media’s employees or management, Mrs Teo responded that SMT is obligated to inform the police should there be evidence that illegal activity had taken place. 

SMT will also have to continue to provide progress updates to the MCI every six months, as agreed on when the Government first committed to funding the media company. 

The SPH Media Holdings Board has tasked its audit and risk committee to investigate the issue more thoroughly. 

In January 2023, an MCI spokesman told The Straits Times, “MCI has requested for SPH media Holdings Board to share these findings when ready and expects full cooperation on this.”

Currently, the MCI is also investigating the matter. 

The spokesman added that the MCI has yet to disburse any funds to SMT.

In Parliament, Mrs Teo said, “Funding will be disbursed only if SMT provides satisfactory regular updates on where and how funding has been utilised and future business plans.”

She also clarified that the Government would adjust key performance indicators and funding where necessary. 

In response to other questions asked by MPs regarding how SMT’s internal review was conducted and why the media company did not break the news itself, Mrs Teo said, “The Government cannot speak on behalf of SMT, and it is premature for us to say more at this juncture.”

Mrs Teo noted that the incident has affected SMT and that the organisation’s board would need to be transparent and rectify any problem that arises. 

Statement by SMT

In a statement by SMT regarding the discrepancies in circulation data, the company stated that it had enlisted the help of an independent Big 4 advisory firm to assist in the internal review conducted from September 2020 to March 2022.

The company also stated that it is committed to ensuring a higher frequency of audit checks and enhancing data quality to uphold integrity and accountability.

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