SPH maintains significant stakes in TV and free newspaper businesses in merger deal

SINGAPORE, 17 September 2004 - Singapore Press Holdings is pleased that it will hold significant stakes in Singapore’s TV and free newspaper businesses following the merger deal with MediaCorp, said Mr Alan Chan, CEO of SPH.

Describing the merger as a good transaction, he said: "It will immediately stem the losses of our TV business, and at the same time, enable us to buy into the new TV company which will comprise all the mass-market free-to-air TV channels in Singapore. We will also have a 40% stake in the only free newspapere in Singapore. We expect both companies to perform well."

On the rationale for the merger of the mass-market TV operations, Mr Chan said: “SPH had ventured into the TV business in 2000 because it believed that this was a significant delivery platform which should be added to its print and Internet business. The outlook and potential seemed positive then.

“However, SPH MediaWorks was launched just as the economy began to slacken and the climate deteriorated further over the subsequent years to unanticipated levels. The advertising pie shrank significantly. Intense competition between the two TV groups forced production and acquisition costs to go up. And amidst a shrinking market, it also led to irrational pricing and severe discounting, leading to losses for both TV groups.

“It became obvious that the situation was untenable and would not be sustainable, despite Channels U and i achieving commendable ratings within a short span of time.

“The merger of two free-to-air TV business offers a win-win solution for both parties. For SPH, we maintain our presence in the TV platform, as we will now own 20% in the new TV company.

“In the same vein, we also view the merger of the free newspaper operations to be in our best interest as it will result in SPH holding a 40% stake in the only free newspaper in Singapore.

Mr Chan said readers would continue to enjoy the many alternatives in the newspaper market, especially from the SPH's stable of 14 paid newspaper publications which offer them quality content and value for money.

"Our English flagship daily, The Straits Times, with its 1.3 million readers, will remain the leading newspaper of choice for both readers and advertisers in Singapore. We would like to thank our loyal readers and advertisers who recognise the value that The Straits Times and our paid newspapers provide."

Pointing to the slew of revamped SPH newspapers, he added: "We are constantly improving our products to stay relevant with our readers and meet their aspirations and needs. This will be an on-going process with all our 14 newspapers and 63 magazine titles to keep our readers informed, educated and entertained and help them understand changes that matter to them at home, at work and at play - all the time."

Mr Chan said: "SPH believes that the merger will bring rationality back into the TV and free newspaper markets, and should ultimately lead both businesses to flourish.”

He thanked all staff in SPH MediaWorks, the TV News teams and Streats for their hard work and dedication in helping the TV stations and free newspaper blaze new trails in the last four years.

In expressing his appreciation to the staff, he said: "Despite the odds, you kept pushing on tirelessly, delivering creditable performance. I am sure that your talents, which have been acknowledged by the numerous awards you have won, will bring the new ventures to greater heights. We are truly proud of your achievements and I want to express my profound thanks to all of you."

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MEDIACORP AND SINGAPORE PRESS HOLDINGS MERGE THEIR TV AND FREE NEWSPAPER OPERATIONS. Please click here.

ISSUED BY SINGAPORE PRESS HOLDINGS

For more information, please contact:

Singapore Press Holdings
Irene Ngoo
Assistant Vice President
Corporate Relations
Tel: 6319 1216
Fax: 6319 8150
Email: ingoo@sph.com.sg

About Singapore Press Holdings
Main board listed Singapore Press Holdings Limited is the leading news and information provider, offering quality content for print, Internet, TV and radio. It publishes 14 newspapers in the four official languages and 63 magazine titles. Everyday, 2.78 million individuals, or 90 per cent of people above 15 years old, read one of the SPH publications while the online editions of its six main dailies enjoy some 120 million pageviews a month. SPH operates two popular free-to-air TV channels, Channel U in Chinese and Channel i in English, as well as two entertainment radio channels, UFM 100.3 FM in Chinese and WKRZ 91.3 FM in English, under a joint venture company UnionWorks with NTUC Media.