Johannesburg - It was the question that perplexed many this
week: why spend R2bn on a group of newspapers that have lagged in recent years
in digital transformation and where many titles are suffering declining
They were directing the question at Dr Iqbal Survé, the
Sekunjalo Group executive chairperson who, it was announced this week, had reached
an agreement with the Irish owners of Independent Newspapers to buy their South
But Survé argues this is precisely the view that comes with
being limited by the lens of being in print media.
The doctor and sports medicine expert, whose BEE firm listed
on the JSE in 1999 and whose diverse interests range from fishing to
telecommunications and healthcare, says he is a “macro person” and takes a
bigger view of things.
“I understand the world – and I understand it politically,
economically and socially … If you look at where Africa is going, I think it
will grow unbelievably fast in the next two decades,” Survé told City Press in
an interview in his Cape Town head office this week.
“And it’s going to be driven by macro drivers like
infrastructure investment, literacy, the integration of African economies. We
cannot fall behind that. Media will have to grow with that. Fundamentally, when
the economy grows, media grows because media equals advertising.
“In 10 years you’re going to be giving newspapers away for
free and the model of newspapers will change quite dramatically, but the
economy of Africa must grow – even South Africa must grow, if we could just get
our act together a bit more. We tend to be a family that fights with each other
all the time.”
Survé, who has extensive business holdings on the continent,
said earlier this week that he would like to expand into media in Mozambique,
Angola and other southern African countries once the deal was finalised.
Independent Newspapers is the biggest collection of English
newspapers in the country and includes The Star, Cape Times, Cape Argus, The
Mercury, Daily News and Pretoria News, as well as the fast-growing isiZulu
It also owns the IOL online news platform, community
newspapers and magazines.
The deal is still subject to the final agreement being
signed by both parties, shareholder approval by the Irish and approval by the
Competition Commission. Survé has not yet released much detail about the
consortium composition, except to say it is a broad-based black empowerment
group that includes trade unions, among others.
“There is no doubt that the (Independent Newspapers)
business has had a challenging time in the context of the investment into the
business,” he said.
“Due to the fact that there were significant dividend
outflows to Ireland, a lot of the investment that should have taken place with
the surplus capital generated did not take place.”
And he admits: “There is no question that businesses in
general are declining in all print media spaces – there’s no one that’s going
to suggest otherwise.”
However, the Indie business “at a fundamental economic level
is doing quite well and there are huge cash flows being generated”, he said.
Survé, whose consortium offered the lowest in the final
round of bids, believes it nailed the deal because it did the due diligence
upfront – advised by Citibank – instead of waiting to see if it was a
This appealed to the Irish, Survé believes, because
Sekunjalo’s was a firm offer with more certainty than that of the other
bidders, who could easily drop their offers after doing due diligence.
Due diligences can also become drawn-out, he said, adding:
“They didn’t have the time, to be frank, and they saw we were serious.”
Sekunjalo is known to go into companies with the intention
of transforming the management cultures in line with what Survé has described
as a “gentler capitalism”.
With Premier Fishing – in which a majority stake was bought
in 1998 and which became the subject of a Harvard Business School case study –
the aim was to empower black workers, increase their involvement in management
and do away with corrupt practices.
The company has also had its brushes with controversy. The
LeisureNet implosion in 2000 nearly sank Sekunjalo, which held an 11% stake in
the firm, and it was at the centre of a controversy last year over questionable
tender processes involved in an R800?million contract for maintaining
state-owned research and patrol vessels.
The government announced an inquiry into the matter.
However, in April last year, it emerged that the ship maintenance tender
inquiry was to become a general commission of inquiry into the overall
effectiveness of the fisheries department, which the Public Protector said it
Does Survé aim to change the management culture at the
He said he makes a point of not forming a view on something
until he has had the opportunity of engaging with it.
“What I can say is that I look at Independent Newspapers as
a compressed spring that could explode. I think the talent that I see at
Independent is amazing. It’s a question of nurturing that talent.
“My approach is to gather intelligence and get people to be
part of that process and listen to what they have got to say. Ultimately, you
and your top team have to make the decision – because the decision is the
allocation of capital … I’m a firm believer that people on the ground are far
better equipped to understand what the requirements of a business are than you
Innovation and digital transformation was key to his vision
for the Indie, he said, and the acquisition of digital assets – thereby
competing head-on with Naspers, the parent company of Media24 – is definitely
on the cards.
“I do take risks and I am an innovator and can mobilise
people. I have done that very successfully. I know there are competitors out
there that are seriously worried.
“Technology is my strength and I’ve quietly invested in a
lot of tech companies … The great opportunity at Independent is that they’ve
done well in print despite what everyone says – maybe at the cost of a couple
of areas – but they haven’t done well online. And you take that content
platform and a whole lot of things, and suddenly you explode.
“Online isn’t just about online news. There are various
universes you can go into online.
“Even journalists are going to have to change. You have to
become multitaskers and you need to write across the various platforms.
“You can’t just write for a newspaper any more. You need to
write for digital and you need to write differently for digital … Maybe I’m a
wrong, but I don’t think journalists will be averse to that. It’s a new lease
on life,” Survé said.
- City Press