Mediamax Network Ltd, a media company associated with President Uhuru Kenyatta’s family and lately Deputy President William Ruto, plans to shut down four of its five bureaus in the second phase of its cost-cutting initiated late last year.
Sources at the Kijabe Street-based company confided in BusinessToday that Chief Operating Officer Ken Ngaruiya has been holding a series of meetings with editors over the issue though there has been resistance as the move will complicate its editorial operations in critical regions of the country at this time when the 2017 General Election is fast approaching.
The plan is to close Mediamax bureaus in Nyeri, Nakuru, Kisumu and Eldoret with only Mombasa left operational, perhaps in reponse to low readership and advertising trends in those areas. But the move will certainly be counter-productive as the media house could lose out on adverts from counties, which have emerged as big media spenders, as well as learning institutions and other businesses.
According to Mr Ngaruiya, the cost of operating the regional bureaus is weighing down the company, which is under pressure from investors to trim its budget.
Late last year, the company, which owns K24 Television, the PD (People Daily) newspaper and a host of radio stations, implemented a radical staff retrenchment and rationalisation programme that saw over 50 staff members, including senior editors, exit after their positions were declared redundant.
The latest plan could also see some staff rendered jobless after Mr Ngaruiya proposed that key people in the bureaus be redeployed to its DSM Place head office, which did not go down well with many editors.
The COO is then said to have asked them to do a report justifying the continued retention of the bureaus for presentation to the board, an indication that the plan, like the staff downsizing, has been discussed and agreed upon at the very top.
During the retrenchment exercise, some top managers were said to have been reluctant to embrace the plan and it was left to Mr Ngaruiya to execute it.
It is curious that the plan to shut down the bureaus is being explored when Chief Executive Officer Ian Fernandes is out of office. He is said to have been on leave for nearly two months now.
Also Read >> Mediamax puts up TV and radio studios for sale
As an indication that the company is undergoing lean times, correspondents’ wages for last month have delayed. Top executives at Mediamax are said to be under intense pressure from the board to make operational costs manageable, improve accountability and instill performance-based management.
The entry of Ruto, who has acquired a stake in the company, which also owns Milele FM, Kameme FM, Meru FM, Mayian FM and Pilipili FM, is said to have increased demand for value for money.
“The Kenyatta family was a bit benevolent in the manner it financed Mediamax though some former and current top managers are thought to have abused their trust. Ruto is a bean counter. He and Muhoho Kenyatta are the ones running the show,” one insider said.
Mediamax’s plan is likely to put them at a disadvantage as its rivals are enhancing their presence in these areas with Nation Media Group even setting up regional studios – the first being in Eldoret.
The company has also been disposing of some of its assets including vehicles and the ultra-modern radio and TV studios at Longonot Place, where it initially operated from.