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IT IS a myth that SA’s main media groups are largely untransformed when it comes to ownership. Ownership among the main owners of print and online publications — Times Media Group, Independent, Caxton and Media24, owned by Naspers — has transformed from what it was in the past.

The unlisted Times Media Group — the owner of Sunday Times, Business Day, Financial Mail and the Sowetan — is wholly owned by the listed investment company Tiso Blackstar. The Tiso Blackstar vehicle is majority black-owned.

Independent is also majority black-owned after Iqbal Surve’s Sekunjalo Media Consortium bought it.

Only Caxton and Media24 are not majority black-owned, but Media24 has the Welkom Yizani empowerment vehicle. In broadcasting, Primedia, the owner of Talk Radio 702, is controlled by the Mineworkers Investment Company, which is aligned to the National Union of Mineworkers.

E.tv is controlled via the Hosken Consolidated Investment-owned Seardel, which is aligned with the Southern African Clothing and Textile Workers Union. PowerFM is owned by the black-controlled MSG.

This paints a picture contrary to the fiction peddled on social media about media ownership in SA. Is the South African media concentrated? Yes! Is it untransformed? No!

There is a view that in a tough operating environment such as the current one and amid changes in the global media landscape, the media should have to generate above-average profits.

The key dividend that should be generated by news media is the effect on society that results from information that empowers people to be able to take action and hold other actors in society to account.

Proponents of this view argue that once news media are expected to generate above-average profits and return on equity for shareholders, something has to give. So what gives?

Those in pursuit of above-average profits have to restructure the businesses by cutting costs to be able to generate returns on their investment. This has led to a serious dwindling in newsrooms. The reduction in the number of journalists has led to pressures that pose a risk to the quality of news coverage. Those who argue against the pursuit of super profits say news publications should simply make average profits and use the capital to hire the best and more journalists.

They believe this is impossible with some shareholders who expect above-average returns on their capital. They then call for philanthropists to take over and invest out of goodwill.

The thesis here is that if you look at the historical ownership of the media, especially the English-language press in SA, it has been in the control of mining concerns such as Anglo American and JCI. With the ownership in mining hands, media were essentially a corporate social investment (CSI) project into which surplus capital from the mining sector was allocated. Calling it CSI is not quite correct because when Cecil John Rhodes gave Francis Dormer cash in 1889 to buy the Argus group (now Independent), there was an agenda behind it.

However, many argue when miners were in control, the media was run through trusts that kept some distance and had independence from the real providers of capital.

There was a level of profitability then in domestic news media. Some miners before 1994 could not invest money outside the country and ended up with assets that were noncore.

Dissenters posit the argument that news media in SA would be worse off than they are today had private capital (which expects above-average returns) not invested in it.

They argue that private capital has propped up a struggling sector and offered the liquidity needed to pay journalists and deal with risks such as litigation. Any news media that operated on a break-even basis or smaller profits would be crippled by one lawsuit and would never have the capital required to pursue their business, which is newsgathering. The view is that newsgathering is expensive and needs deep pockets to survive.

Without holders of private capital, newsrooms will be unable to reinvest in their existing human resources.

The question is, how does the industry maintain a balance? What is the sustainable model?

How can media attract capital and still generate good returns without compromising the human capital needed to pursue its business?