Merger good for Jamaican, regional media - Clarke
Chairman of The Gleaner Company Oliver Clarke said yesterday that unfavourable local economic conditions are at the heart of the decision to merge the media business of The Gleaner with the Radio Jamaica Communications Group.
"You cannot provide independent news unless you are viable. What Jamaica faces is that there are a number of foreign companies coming in and putting up programmes that solicit advertising and you have a lot of businesses that are not making their way. The Gleaner's interest in this is trying to create an organisation that is viable, can last, and is Jamaican," Clarke said.
The boards of the iconic companies - the 180-year-old Gleaner Company and the 65-year-old Radio Jamaica yesterday signalled the historic move.
"The Gleaner Company is effectively being split into two. All its media business is effectively being moved over to RJR and that which is left allows the company to continue on a reduced basis," Clarke said during a press conference held at The Jamaica Pegasus hotel in New Kingston.
The Gleaner chairman said that media predominantly depends on advertising for its revenue and that the economic environment has not been encouraging to advertisers.
"People spend on advertising to sell products. They advertise more if you have a strong economy. What you have is a very stagnant economy," Clarke said.
At the completion of the transaction, RJR will increase its issued shares on a one-to-one basis, to be allotted directly to the shareholders in The Gleaner Company, in exchange for an equivalent value of media assets and cash.
The value of the transaction is just over $1.56 billion, and the new entity is expected to have a turnover of approximately $5 billion per year.
According to Clarke, the coming together of the entities is "intended to give us longevity, diversity and new energy".
"There are plans for more interesting times ahead for our advertisers, with added value and more options in these new, social and digital media spaces," Clarke said.
He said further that "this coming together is good for Jamaican and regional media; it is good for our country, our shareholders, our advertisers and our clients".
Lester Spaulding, chairman of RJR, said the decision to merge the entities has created what is arguably the most exciting development in Jamaican media in a century.
"What better way to celebrate Jamaica's Independence tomorrow (today) than with the coming together of two strong, locally owned media companies in further preservation of local ownership," Spaulding said.
The Gleaner's newspapers will continue using existing names.