Thursday, June 12, 2008


Here is some food for thought from this reader in response to the story about CNMG's losses.


"Of course the writer meant to say cumulative, but does he/she -- or the sub editor who subbed the story -- even know the difference? This is the problem. There are too many inexperienced, ill-trained 'journalists' in the local media industry. Some of these reporters would not even make the cut at quality college/university newspapers abroad. Sad, but true...

"Regarding the story in question, its whole premise and headline are silly. It suggests that by the government pumping $135 million into a media company it should immediately turn a profit. As you know, many companies run a loss for several years before becoming profitable. I think the typical time-to-profitability for a magazine, for instance, is roughly five years. I don't know the time scale for a TV channel, but given the losses Murdoch incurred setting up Sky and Fox, I would say they can be fairly substantial in the first few years.

"The real story should have been, 'Is CNMG being properly managed to turn a profit anytime soon?' Have there been missteps in executing the strategy? Grenfell Kissoon at ANSA McAL's earnings conference a few months ago said that CNC3 had already turned a profit. What is CNC3 doing right that CNMG isn't? CNMG's salaries, the article tells us, account for a big part of its operating expenses ($8.7 million). Just how much are the top executives and talent being paid, and are these salaries justified in light of the company's performance to date? These are some of the questions that should have been investigated by the reporter, instead of just mindlessly telling us about the various line expenses and revenue items.

"Also, it would have been helpful to be given percentages along with the raw figures. For instance, the $8.7 million represents what percentage of overall expenses? This type of information is far more useful for evaluating the company's performance than raw figures."