Address by Lebashe Investment Group, Chairman, Mr Tshepo Mahloele, to the South African Press Council.

Lebashe acquires Tiso Blackstar media assets
June 27, 2019
Lebashe enters the media ‘Arena’ and ushers in a new age
November 6, 2019

Good evening ladies and gentlemen.
Judge Phillip Levinsohn, Chairperson of the Press Council Judge Bernard Ngoepe, Chairperson of the Appeals Panel, Latiefa Mobara, Executive Director of the Press Council, Adv Joe Latakgomo, Public Advocate

**I take this opportunity to Congratulate Pippa Green, for her new appointment as the Press Ombud.

Members of the Council,
Adjudication Panel Members,
Members of Constituent Bodies

-It is also my esteemed privilege to pay respects and to honour the late Raymond Louw, who I believe would have been here listening hawkish eyes.I am reliably advised that Mr Louw remained principled and vigilant against any abuses and suppression of the press under apartheid and then continued to be the guardian of press freedom in the new dispensation. May his soul rest in peace.

-Another press stalwart that deserve special mention for his role in the freedom of the media over five decades is Joe Tlholoe. We must never forget the brutal and suppressive path that you and your peers went through for all of us to enjoy freedom of the media and expression.

A warm thank you to the Press Council for inviting me and the Lebashe Investment Group to address you on the occasion of your AGM as new entrants to the media industry.

-I take the opportunity to share a bit about ourselves but unfortunately for you it will be according to us. Being conscious of our own bias is perhaps one of the principles we should all embrace!

-I was born in Mamelodi and did my primary school years there. I then moved onto High School in Cape Town and then onto Rhodes University.

-I come from a family of entrepreneurs and was attracted to the world of business after watching my father run his informal business in the township of Mamelodi.
I wanted to emulate his steps when I started my first business; a furniture store at the age of 27 years, which was financed by Investec for R10m. Many lessons were learned here, which have served me well in my career including my stints in entities such as RMB, CDC, DBSA and PIC.

-I am not sure whether you are all aware of what ‘Lebashe’ stands for? it stands for ‘Legacy Balance Sheet, and as such we invest in long-term assets, and we enter into this industry for the long term. We didn’t take this investment lightly. As Lebashe, we like investing in complex businesses.

-I come from a private equity environment, but I want to assure you that Lebashe is a long-term investor and will not saddle this business with debt, gear it up and then sell.

-We stand here as businesspeople desirous to make a positive impact in our environment.

-There has been a lot of cynicism, scepticism and questions regarding our decision to acquire the country’s leading media house.

-The questions ranged from “are you crazy” to “what are you up to?” I am NO Jeff Bezos and I have NO political ambitions. When my colleagues and I assessed this opportunity, we saw great potential inherent in these great titles. Therefore our investment is about our commercial interests and how this business compliments the technology and the financial services assets in our stable.

-The likes of Jack Ma, John Henry and Jeff Bezos are relatively recent entrants to the media industry, and if such great business minds have chosen to invest in this industry and use it to complement their broader business portfolios, so too are we.
We are confident we will bring our business acumen to bear in ensuring the continued success of these important legacy media brands in future. We further believe that these brands can be inclusive in their approach and can be trusted again.

-As new entrants our motive is clear: For us this acquisition is about a business that contributes directly to the hearts and minds of the nation.

-We are cognisant of the fact that the media business is not an industry for the faint-hearted, but nevertheless we think great brands, with great content, is the way to go for the future.

-They are not just essential for our commercial interests, but they are integral to the health of our nation. The media industry is no ordinary business. It’s a political organism. It’s a mediator of power between the powerful and powerless. It’s a business whose nature and character have residual effects on the lives of ordinary people, on power and our democracy at large.

-Of course the business needs to generate profit and I am a businessman after all. But I am aware that there is an enormous
responsibility
that comes with making money from the media business.
It’s the responsibility that requires some level of moral and ethical consciousness. It’s a virtuous burden. But for us to fulfil this duty and responsibility, there has to be a model that is both commercially sustainable and at the same time respond to the country’s pluralistic complexity and diversity. Despite the current digital disruptions and revenue decline, it is our intention to ensure that quality journalism survives and thrives – in whatever form.

-We are under no illusion of the global and local challenges the media industry faces, but we will draw from our experience and insights to change the fortunes of this great business.
When we started Harith 13 years ago there was nothing. No office, no funds from investors except seed capital of R17m from the PIC, and an idea. Today after 13 years we have built signature infrastructure projects across the continent. Our success came on the back of hard work and financial ingenuity without any favours from any special interest. Our success was built by quality teams and enduring collaborative partnerships developed across the continent.

-Therefore, we come into this industry with our eyes wide open and amidst the gloom and negativity, we nevertheless foresee a bright future for the media industry, not just in South Africa but beyond our borders too.

-We are very much cognisant of the fact that a commercially unsustainable media business compromises the quality of content. The newsrooms will shrink, and expertise and skills will disappear. The resultant effect is sub-standard content and disregard of elementary ethical rules.

-What excites us about our acquisition of the Tiso Blackstar Group’s media assets is that they are all fantastic legacy brands that over the years have played a crucial role in South African society and in chronicling this country’s history for well over a century now.

-The Sunday Times for instance has over 100 years of heritage and pedigree. Similarly, too, brands such as the Daily Dispatch, Business Day and Financial Mail have considerable stature, public trust and strong reputations forged during this country’s darkest days.

-There seems to be this view that print is going to fall off a cliff. This prediction is not going to happen anytime soon. We believe both print and online models can be profitable on the back of good, quality journalism and a product that is trusted by people. We further believe that this platform can be extended over the continent.

-Legacy brands globally such as The Guardian, The Washington Post, New York Times and Financial Times, in developed markets in the US and UK for instance, still have strong print product offerings, complemented by successful digital revenue models. We will strive to find the right balance.

-This transaction includes Tiso’s extensive media, broadcast and content businesses in other parts of Africa in strong markets such as Ghana, Nigeria and Kenya; and at Lebashe we believe this offers us a chance to create a powerful pan-African media platform, and that this acquisition complements our strategy of building a powerful African company that provides solutions to the continent’s most pressing challenges.

-I love platforms, and we all know content will remain king, but in this digital age we have to look at how content is consumed, and whether we’re catering for a fast-moving media consumer.
In the latest State of the Newsroom report, the Executive Director of the Press Council Latiefa Mobara and former Press Ombudsman Johan Retief painted a disturbing picture of the media landscape: “Of the 533 complaints considered by the Press Council during 2018:

  •  neglect in giving subjects of critical reportage a right of reply, which more often than not leads to inaccurate and unfair reporting, remains the most common mistake made by the media…
  • Another nasty gremlin (is) the presentation of an allegation as fact… this tended to influence more than just the individuals concerned, as the reporting adversely affected society. The unnecessary harm such reporting caused the public was as bad as it comes..”1 This speaks to a crisis of credibility and legitimacy.

-We need to be deeply concerned. The absence of credibility creates a news lacuna that could only be filled by peddlers of propaganda, toxic politics, racists, hate speech and fake news. Once the public start falling for such propaganda, fake news and political toxicity, it’s a clear signal of a breakdown of public trust in the media.

-It was disheartening to learn that 70% of the South African respondents “worry about their ability to distinguish between information that is ‘real and fake’ on the internet”, according to the eighth annual Digital News Report from the Reuters Institute for the Study of Journalism at the University of Oxford.2

1 Finlay A State of the Newsroom 2018, Structured Unstructured, (Wits. 2018)

2 Digital News Report from the Reuters Institute for the Study of Journalism at the University of Oxford, 12 June 2018

-I am sure that you agree with me when I say that “the credibility of the media is fundamental to its legitimacy.

-We must never forget that the media’s power and existential legitimacy are derived from the public trust. Without the public confidence and trust, the media will find it very difficult to operate. Some propagandists such as the Bell Pottingers of this world will exploit such trust deficit to advance their nefarious and iniquitous interests. Public trust is a powerful weapon against any threat to the media, and an ingredient to our commercial success. It needs to be earned, cherished and guarded jealously.

-We must never make a mistake to believe that freedom of speech and expression were constitutionally bestowed upon the media industry for some abstruse professional exceptionalism. They were accorded to the media to the extent that we give expression and empower the public to exchange, disseminate, impart and receive information.

-The constitution entrusted the media to be the custodians of these freedoms and rights on behalf of the public.

-It is for this reason that our investment in Tiso Blackstar media titles is essentially anchored and very much dependent on quality and the highest standard of ethical journalism. Expecting anything less is a negation of our constitutional duty and will eventually hurt our commercial interests.

-Our editors will continue to enjoy editorial independence without any proprietorial interference as long as they practice quality and ethical journalism as prescribed by our editorial policies and the press code. Therefore, the Press Council’s stringent and rigorous accountability systems and regulations are central to our credibility and success.

-Our job will be to create the environment that will ensure they are able to run with the product, and that they are backed up by experienced media industry expertise and the business acumen needed to ensure the group remains viable, profitable and contributing to a better nation.

-The media has been central to the defence of our democracy and its continued fight back against those who seek to destroy our country and decimate our economy for their own gain. Despite the maelstrom of corruption and the threat posed to many media outlets’ futures, SA’s ranking in the 2019 World Press Freedom Index was 31! That put SA ahead of France at 32 and the UK at 33!

-When we consider media as the “Fourth Estate”, with the press as a watchdog on other powerful institutions or “estates” – it is my take that with “great power comes the requisite responsibility”.And are you exercising that responsibly?

-In a world where google can answer almost everything, what is it that you will do that people will pay for it?

-Let us accept that in as much as there is prejudice in “AI”, there’s a whole lot of prejudice and bias in a whole lot of the journalism. My wife, when I am being unreasonable, wants me to consider if I had to turn the situation around and look at it from the other persons perspective, and then ask myself whether I am still being fair?

-We are also aware that in recent years, there has been an unprecedented, full-scale ‘media war’ that has been raging amongst the major media houses in this country’s media industry. This no doubt is fueled by declining advertising income and readership, and the debilitating impact of the digital age on traditional media, factors which have served to decimate this industry and ensure an all-out fight for survival. This pettiness has to stop as it does not reflect well on our industry – it only serves to further erode the trust from our readers.

-By all means, let us ferociously compete as media houses, but let it be to grow our respective audience share and revenues, on the back of the quality of the products and the platforms we provide our audiences, and the value we give our advertisers.

-There have been large-scale retrenchments and financial losses across the media landscape in South Africa, it’s been uncomfortable, to say the least.

-Now, it is about finding how to move forward from that.
-For us it’s about how to regain the trust.
-It’s about being part of the solution to develop an economic model that will allow talented journalists to do their jobs without limitation, fear or censorship?

-We do believe that it is time to put the reader first and to ensure that the integrity of our media houses is above reproach and that media houses are not seen to be unnecessarily partisan!

-At times it seems to me as if we are living in a society where justice is driven back and stands at a distance; truth has stumbled in the streets, and it seems as if honesty cannot enter…. We as an industry need to regain our rightful place as custodians of truth and dispensers of expert opinion. This is the least that I will expect from my team.

-Furthermore, our interest is in fighting for the sustainability of the media industry, to retain and create as many jobs as we can, and to continue to deliver the products millions of South Africans and Africans have supported, trusted, believed in, and consumed for many years now.

-We will also seek to be dynamic and creative in learning best practice industry trends, be at the forefront of fast-evolving content platforms and seek to create and acquire new media assets that signal our intent to be an important African media industry player.

-Today when I sit on my stoep, and my kids ask about the future in this “noisy environment” I always tell them, just do your bit!! With this investment, we are doing our bit. Hopefully there can be more investors who feel that responsibility and not behave like victims, and IF enough of us do that, then tomorrow will definitely be better!

-In conclusion, we want to emphasize Lebashe’s support for the important work of the Press Council, as this country’s key media self-regulatory body represented by both the public and media sectors, and by the Office of the Press Ombudsman.

With such respected legal minds such as Judge Philip Levinsohn, Judge Bernard Ngoepe and Justice Yvonne Mokgoro in its ranks, and with the considerable media industry experience of Pippa Green as Press Ombudsman, the Press Council is an extremely crucial media industry regulator. It is all about leadership. The history of all companies, civic organisations, governments are all linked to some intervention or act by some team and individual leadership.

-We encourage you: As the custodian of the press code, you need to reassert your independence from media houses, both financially and structurally. As you are aware, Press councils around the world are trying harder to create a buffer between themselves and the media houses.

-While we will continue to ensure rigorous internal systems to ensure the fairness and impartiality of our group’s journalism, I reiterate that we are fully supportive of the role of the Press Council and will continue to subscribe to the council as members in good standing.

-Again, I thank you for the invitation to address you this evening.
-We look forward to being fresh entrants to this exciting – and important industry and rely on you for your guidance and support.

-Our resolve is to walk this journey with you for the benefit of our audience, the country and our democracy.

Thank you

For media queries, please contact Khaya Buthelezi on:
Email: khayabuthelezi@icloud.com