Jordan’s two leading dailies are in serious trouble, and it may be too late to save them from the same fate that befell so many other newspapers in the digital age.
By Osama Al Sharif
The crisis facing Jordan’s two leading newspapers, Al Rai and Addustour, has reached existential levels, with the latter having not paid its employees for the last four months. Al Rai’s losses in 2014 exceeded JD2.6 million, while Addustour hasn’t disclosed its financial statement for that year yet. Both are public shareholding companies and have seen their stock price drop considerably over the past three years. Accumulated losses for Addustour are thought to exceed JD10 million (it lost JD3 million in 2013), and unless something is done the company could go bankrupt in a matter of weeks.
The predicament of the two dailies is a reflection of the wider crisis occurring in print journalism as a whole. Falling advertising revenue has pushed once profitable print media companies into the red. The rise of online media has cut print circulation by more than 50 percent. And although the Social Security Corporation (SSC) owns the majority of shares in Al Rai, and 30 percent of shares in Addustour, none receives subsidies from the government. In fact Jordanian newspapers pay duty on imported news print although in many countries this essential raw material is exempted.
Addustour employs more than 200 journalists and the company’s financial crisis threatens to render most jobless, something the Jordan Press Association (JPA) considers warrants immediate government intervention. In the past few weeks, representatives from both newspapers and the JPA met with legislators and government ministers in a bid to find a solution. Addustour had worked out a deal with SSC under which the company sold its buildings for an undisclosed sum and re-leased them, leaving it with only its printing presses and other equipment. Efforts to restructure the company have been hampered by legal and administrative obstacles.
In the case of Al Rai the major problem lies with its large number of employees in addition to loans incurred when the company bought a state-of-the-art printing press worth more than $30 million.
Dwindling income from advertising, circulation, and commercial printing has compounded the two companies’ problems. But the managements are also to blame for failing to adapt to a fast changing environment that has affected print journalism all over the world.
The government has promised to look into the plight of Addustour and Al Rai, but few believe it can do anything to save them. Journalists say the two companies are more than just public shareholding entities, and that the government should step in to rescue what they describe as a strategic state media.
The SSC can do little at this time. It has already lost millions in dividends and depreciating share value. For the corporation ownership in the two companies is an investment just like any other. Outside pressure has prevented the SSC’s fund managers to sell shares in Al Rai and Addustour when problems began to surface more than three years ago.
There are many reasons behind the receding influence of print media in Jordan. In addition to the changing environment as a result of competition from online media, these two newspapers are widely seen as mouthpieces for the government; lacking independence and freedom. That perception had undermined their credibility in a market that offered alternatives. Al Ghad, a privately owned corporation, has been able to expand at the expense of the two papers.
Furthermore, the government, through the majority shares of the SSC, often made political appointments to the management of the two companies. That worked fine when the two titles were profitable, but when the landscape began to change, as early as 2005, the managements of Al Rai and Addustour were unable to come up with creative solutions. The two papers were slow to respond to increasing competition from online media. To this day, none of the daily newspapers’ websites is among the top five online sites in Jordan, which is an anomaly. Most newspapers around the world were quick to invest in their digital real estate, making them the leading news providers online.
Back in 2005, I urged Addustour’s bosses to diversify by launching a local radio station, publishing a free classified free shopper newspaper, and building vertical news, business, and entertainment websites. In addition, I suggested the print newsroom be turned into an all purpose print and digital news center in order to make the most of human and news gathering assets.
Had both companies diversified their media related activities 10 years ago the dismal reality of today would have been averted.
The government is unlikely to intervene to save the two companies. Pouring money into public shareholding companies, with no guarantee that such infusion will salvage them, is a risky proposition. For now, at least, the fate of one of those dailies seems to have been sealed.