Telkom splurges R34m on New Age ads

Feb 10 2013 14:54
City Press

Atul Gupta. The Gupta family, main shareholder of The New Age, has close links with Jacob Zuma. (Picture: Leon Sadiki)

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Johannesburg - Telkom is responsible for a third of The New Age newspaper’s advertising revenue, data obtained by City Press show.

The most recent Nielsen Adex report (December 2011 to November 2012) reveals that the listed telecommunications company, which is almost 40% owned by the government, is the top advertiser in The New Age and invested R34m in advertising in this period.

The data show the newspaper is handsomely supported by parastatals and national government, with its new 24-hour news channel, announced this week, likely to attract the same support.

Telkom’s advertising comprises 32% of the newspaper’s advertising income in the 12-month period.

However, this is not necessarily all hard cash, and it could include the value of barter and trade agreements between the parastatal and the paper.

The paper, owned by the Gupta family, is generating impressive advertising revenues considering that it provides no circulation figures to judge its value by.

Telkom is followed by national government (almost R17m) and Transnet (R7m).

National government, Telkom and Transnet make up almost half of The New Age’s top-20 clients as depicted in the City Press graph below.

City Press reported two weeks ago that Transnet forked out R17.5m for 18 breakfast sessions, while Telkom has concluded an agreement to sponsor 12 breakfast sessions for R12m in the 2012/13 financial year.

Considering the estimated R200m in annual running costs for a low-end 24-hour news channel, industry insiders believe The New Age’s TV venture, Africa News Network 7 (ANN7), will battle to raise enough funding.

ANN7 will be broadcast on DStv’s premium bouquet.

The New Age has joined forces with Indian media baron Subhash Chandra’s Essel Group, which is valued at $3bn (R27bn).

Chandra (62) is India’s 23rd richest person and has a personal fortune of $2.9bn, according to Forbes.

Zee TV, which already broadcasts on DStv, is a subsidiary of the Essel Group, which will own 35% of ANN7.

The Guptas’ Oakbay Investments will also own 35%, while a mystery broad-based black economic empowerment entity will hold 30%.

A highly placed South African marketer, who does not want to be named as they service clients that advertise in The New Age, told City Press that “very few media agencies are recommending the publication as a place to advertise”.

“But it simply bypasses the industry and goes straight to senior decision makers in companies – ones higher than the marketing bosses.”

Just as the paper does not offer sales figures, the new channel will most likely not monitor its viewership to determine advertising rates, say experts.

MultiChoice chief executive Imtiaz Patel confirmed to City Press they would not be paying to host ANN7.

“We do not generally pay for news channels. This channel is treated the same.”

He said local content was “the flavour in broadcasting at the moment”, evidenced by the success of talk radio stations and community newspapers, said Patel.

“Broadcasters across the world are investing heavily in local content. People want to know what’s happening in their communities, towns, provinces and country.”

The proposition for ANN7 was to have a “heavy focus” on local news.

All the channels on MultiChoice have performance clauses.

“If a channel doesn’t perform, we have reviews and more reviews and, ultimately, we may take the channel off. The same applies to this channel,” said Patel.

It also emerged this week that more government departments and entities have splashed money on The New Age’s business breakfasts.

The Passenger Rail Agency of SA (Prasa) has agreed to sponsor eight breakfasts.

Prasa’s Moffet Mofokeng said he would not be adding to the information in City Press’ possession.

When Rural Development and Land Reform Minister Gugile Nkwinti was hosted in November 2012, his department paid nearly R200 000 to sponsor the event in Johannesburg.

The department says it used the event to tell the public domain what it was tangibly doing to reverse the legacy of the 1913 Natives Land Act, the centenary of which will be in June this year.

The arts and culture department paid R150 000 for a briefing in May last year, but insists it was not a sponsorship.

The department claims it benefited from interacting with stakeholders and citizens to get “views and inputs”.

The SA Local Government Association paid more than R32 000 to attend the briefing addressed by its chairperson, Thabo Manyoni, and attended by Cape Town and Johannesburg mayors Patricia de Lille and Parks Tau, respectively.

 - City Press

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