The publishing group says Media24's major restructuring could have "serious competition and public interest concerns".
Printing and publishing group Caxton plans to take Media24 to the Competition Commission over "serious competition and public interest concerns" following the announcement of a major restructuring that could cost 400 jobs.
Last week, Media24 announced it had accepted an offer to sell its distribution business, On the Dot, as well as its community newspaper portfolio, to Novus Holdings. The deal needs approval from the Competition Commission.
The media group is also considering closing the print editions of five newspapers, including Rapport and City Press, due to a "devastating decline" in circulation and advertising. The group plans to go "fully digital," which would strengthen its two main digital news brands, News24 and Netwerk24.
However, Caxton chairperson Paul Jenkins said on Friday that Media24 had "ignored alternatives to this destructive path", such as selling viable daily and Sunday titles.
"Caxton believes that these steps give rise to serious competition and public interest concerns that will have to be considered by the Competition Commission," he said. "Caxton is also concerned that the merger transaction is being prematurely implemented."
Jenkins said Media24's decision to close titles and sell its community newspapers and distribution arm to Novus would have "devastating effects on print media in South Africa".
Media24 CEO Ishmet Davidson said on Friday that the media group had been in discussions with Caxton as a potential buyer for On the Dot and the community newspaper portfolio. In the end, he said, the group decided to go with Novus, which already prints most of its newspapers.
Davidson said that Media24 remained "fully committed" to the business rationale for the proposed restructure, and would be "happy to defend our actions in a formally structured legal process".
Media24 (backed by Naspers) is one of South Africa's financially strongest media groups. Its decision to close down a number of print titles due to financial pressures has caused alarm in South African media and, according to experts, is indicative of a broader crisis.
The Competition Commission’s Media and Digital Platforms Market Inquiry (MDPMI) has exposed the severe financial strains our media institutions face.
Publishers have reported significant financial losses, shrinking newsrooms, and relentless cost-cutting measures undermining journalistic integrity.
A significant factor contributing to this crisis is Google’s dominance of the online advertising ecosystem. Over the past decade, Google has captured an estimated 90% of South Africa’s digital advertising market. With a digital spend of R14.5 billion in South Africa last year, Google pocketed around R13 billion (approx. (c. $718 million), leaving a meagre R1.5 billion for local media.
Source: News24
