After a year running on half-tank, Standard Group employees are smiling all the way to the bank after management restored full salaries, a strong indication of an improving business environment in the media industry. The company – which owns Standard newspaper and KTN – effected a cross-the-board pay cut of up to 30% in April 2020 to cushion itself against the ravaging effects of the Coronavirus p******c.
According to the April 2020 schedule, staff earning Ksh100,000 per month or less had a reduction of 20%, while those with more than Ksh100,000 per month took 25% shave. The company’s Board of Directors also took a cut on their allowances and deferred the payable amount “until such a time that things will normalize.”
Standard employees have had to squeeze themselves to fit their expenses in the lower salaries, a tough task given that Covid-19 hit other sectors that provide side-jobs for journalists and editors. But on 16th June, pain gave way to joy when the company released a memo announcing resumption of full salary payments effective 1st June 2021. Also benefiting from the move are its correspondents, who had also been affected.
The company’s management is cautiously optimistic, however, saying the business still faces challenges as Covid-19 continues to shake the country and media consumption and advertising trends shift. “Despite the ongoing challenges, the company has decided to resume payment of full salaries,” said Standard CEO Orlando Lyomu. “Meanwhile, efforts to achieve savings in other areas of the business will continue and I call of you to offer unwavering support to these initiatives.”
Standard Group posted a Ksh434 million pre-tax loss for the year ended 31st December 2020, an improvement from Ksh684 million loss recorded in 2019. Granted, Standard Group was already facing financial hurdles even before the p******c hit, a situation blamed on over-expansion of its broadcast segment and inhouse f***d.
Over the past two or so years Standard has launched two new stations – Vybez and Spice and two TVs (KTN Burudani and Farmers TV), which despite guzzling huge finances are yet to break even. Standard newspaper remains the group’s flagship brand, followed by KTN.
Media houses were among businesses most affected by the p******c, which slowed circulation for newspapers and advertising across print and broadcast platforms. Apart from salary cuts, Nation Media Group, Mediamax Media Networks and Standard Group laid off workers as part of restructuring to remain afloat as the p******c forced only essential employees to keep their fulltime jobs.
Nation Media Group reinstated full salaries for its employees in March 2021, while Royal Media Services, which runs Citizen TV, has scaled down the percentage cut in pay.
It’s been a tough year for media companies. Nation Media Group (NMG), the industry’s pace-setter, reported a massive 94.4% decline in net profit for the year ended December 31, 2020. Net profit for the full year fell to a paltry Ksh48 million, down from Ksh856 million in 2019. RMS and Mediamax, being privately held companies, do not make their financial performance public.
At Standard Group, the road to recovery is paved with many hurdles. Shouldering a loss of Ksh434 million and battling against a defiant p******c won’t be a walk in the park for management. Besides, the many new businesses it has launched remain a financial burden.
“The journey to recovery is still long,” Mr Lyomu said, “so we need to redouble our efforts to face the challenges ahead, while we remain hopeful that the future will bring good tidings.”