Andrew Bonamour comes across like a kid in a candy store as he talks about his new position as chief executive officer at the Times Media Group (TMG). He has always been fascinated with media and has been watching this particular company in its various guises over the years. He believed he could hone it into the best company it could be – much better than it has been over the last 13 years.
And now he has his chance: he is eating, sleeping and breathing TMG.
Many in the media industry are critical of this man who walked into the company – never having been involved in or with media before – and within two months had decimated the top floor of the company and is intent on making many more changes.
Bonamour has heard the criticism, but is unapologetic about reducing the top echelon of TMG so fast. “When I moved in, senior management took up one-and-a-half floors and now we are in these few offices,” he says, peering outside his office door. “This company was seriously top-heavy, with a bloated head office. The company costs were way out of kilter for a company of this size.
“I may not be a media man who grew up in this industry, but I am a businessman and I can see how to turn this into a really profitable business, one that will be ahead of its competitors.” He maintains that he has done his research and has a good feel for this industry.
“This is a contents business and we own a great deal of it, from newspapers like the Sunday Times and Business Day, to a host of other sources within the group. There is value in the content and how we commercialise it. It is about thinking out of the box, trying to come up with different ideas through which we can make money from the content.”
He envisages leveraging this content to further generate capital by creating books and e-books on local heroes, personalities and business leaders, by using articles from the various publications through the decades. He also plans to move into television and digital radio and is already working on a number of e-commerce initiatives.
At TMG’s disposal are not just archives full of print and photographic content but music and movies (TMG has a catalogue of around 250 films) too, as it also owns Gallo Records. “With Gallo, we also have an exceptionally valuable and untapped asset with the music of top local artists. So, while we won’t be taking on any new artists, unless we believe they are a dead cert, we would like to buy further rights and music content and find ways to leverage that content.”
Bonamour started his investment company, Blackstar Group, in 2005. “We raised money from the UK and listed on the AIM (Alternative Investment Market operated by the London Stock Exchange). It was a combination of luck, timing and a liquid market and people saw investing in South Africa as being exotic.”
For the next eight years he put his company to work and developed a good track record, and in 2011 he got a secondary listing on the Johannesburg Stock Exchange. All the while, he was watching Avusa (and Johncom before that) and the media in general. “In the 2000s, this company lost its way. It became a plaything from a board’s perspective and they didn’t look at the value of what they had.
“We [Blackstar] saw the opportunity in Mvelaphanda Group years ago because of its 22% shareholding stake in Avusa and so we bought the controlling shares in the Mvelaphanda Group and took management control.” Mvelaphanda at the time was winding down and selling its assets.
When negotiating the agreement around TMG (then Avusa), Bonamour told the Mail & Guardian: “We wanted to restructure Avusa in order to put it on the right track with the right management team in place. Avusa needs a catalyst to restructure; it cannot be done in its current form.
We believe Avusa is a turnaround and fundamentally a valuable business.”
He then used his position at Mvela (now New Bond Capital) to restructure this business, creating Times Media Group, a name so similar to a former iteration of the company, and one that many in the media believe fits.
Bonamour initially had Colin Cary as MD of TMG, but it soon became apparent, he says, that “Colin couldn’t agree with us in terms of our direction,” so Bonamour took the reins. “It was always my intention to be very involved,” he says in response to being asked why he took the hotseat and didn’t get someone else in. Besides, after the board and shareholders had bought into his plans, they said he needed to bring them to fruition himself. “Blackstar has a lot of reputation resting on the success of this business so I took on the role full time,” he says. “I will run the business on a capital returns basis. We won’t invest or spend money on anything unless we can earn an adequate return.”
Bonamour has big plans, but with the recent track record at the helm of this media house, who’s to say he won’t make his money and run? “I have made a commitment to the PIC (Public Investment Corporation) that we are here for the long haul.” The PIC, a 17% shareholder of Avusa, opposed TMG’s buyout of Avusa in July last year. It is one of the biggest shareholders in TMG, along with Coronation, Mehta Family, and Caxton and CTP Publishers and Printers (which bought 10.44% earlier this year). Blackstar now owns 19% of TMG.
Says Bonamour: “We are getting this business right slowly and then we will be positioning it to grow it. Once we have done that, perhaps we will look at opportunities in southern Africa and elsewhere.”
Within just two months of being at the helm, Bonamour says, TMG had paid off 35% of its debt – taking it from R1.15 billion to R780 million.
In that time, they negotiated to buy 50% of BDFM back from Pearson. Bonamour believes this to be a great acquisition. The cost of buying it from Pearson, he says, was “immaterial”. ”Before, we had a 50% stake in a business that wasn’t ours; now it is all part of our group and we can make the best use of its resources to improve all the products.”
So, not only do both the business publications move into TMG but – something that clearly excites Bonamour – so do three television channels that are part of Africa Business Channel, a subsidiary of BDFM: Summit (soon to be Business Day TV or BDTV), The Home Channel and Ignition TV.
“Now, we have to develop and grow the television side of TMG,” he says.
Bonamour plans to give BDTV a totally different look and feel, along the lines of international business television channels, to boost its audience ratings. He says TMG may even move the studio into the Business Day newsroom.
He explains that he will utilise the content and expertise from his two business publications for this channel. In fact he plans to increase the synergy between all his content providers. “There are great opportunities in television and we have the talent and the experience.”
Despite his desire to get into television, Bonamour is bullish about newspapers because he says people are still reading newspapers and advertisers are still getting return on their investment in the press.
Considering that the Sunday Times, South Africa’s biggest selling newspaper, and Business Day, the most esteemed business daily, are part of the TMG stable, he is not wrong. “But if there is one threat, it is distribution because the costs of distributing newspapers are high and growing. We need to find innovative ways of bringing these costs down and sharing distribution.”
He explains that TMG is in a much better position than other media groups because it mostly doesn’t print its own products. Because of this, TMG doesn’t have large capex and depreciation charges. “So, the returns we generate out of our investment in our media division are high. This also allows us flexibility with digital changes over time. As a big client, we can demand the best prices for printing as we have a lot to print.”
He agrees with American business magnate Warren Buffett that the future of newspapers is local media because “people are parochial”. And for that reason, he is very proud of TMG’s regional papers, which include The Herald, Daily Dispatch, Sowetan and Post.
Any chance of him closing any of the newspaper titles? “No, all our titles are profitable,” he says. The Sunday Times is the group’s cash cow and while it may drop circulation a bit from time to time, he says, it goes back up again. “You can’t replicate the Sunday Times or Business Day – there are high barriers of entry to this market, good cash flow and a real influence on people’s daily lives. These newspapers are incredible assets and have enormous brand value.”
In terms of taking media online, he says, “There is no silver bullet for digital and the market is still evolving. What suits one publication doesn’t suit the other.” He says TMG’s individual publications have all gone their own digital routes that are working for them. “I don’t want to be a pioneer, but rather a fast follower,” he says. “We will build step by step and run things slowly and cautiously, developing the correct and most profitable business models. Everyone is rushing to establish an app, but there are no proven returns on apps, so why rush?”
But TMG is already moving into radio streaming, taking this ostensibly print business on to the airwaves. “We have so much of our own music content from Gallo and then we have other content from our newspapers. These days we can live stream from anywhere. It is all about talent and content. This will be yet another arrow in our quiver.”
As for TMG’s magazines, which are mostly niche market and profitable, Bonamour is quite happy with their performance. The only ones he is not thrilled with are those with an international licence. “These magazines have crazy contracts. It’s not just about a great brand, the magazines still need to be profitable.”
TMG staff members have mixed opinions about their new boss and his plans. Some find him inspiring and his enthusiasm contagious, but many more are concerned about their jobs and this man who appears to be at ease with a hatchet.
Bonamour explains that the decision to change the top rung of editorial staff was not his. It was made under Mike Robertson and mostly they were made before he took the reins. “We rely on good talent so we want this to be the company that excellent journalists want to work at.”
He says he has every intention of investing in TMG staff, particularly in terms of training. “For a number of years no-one invested in training our people to ensure we produce the best content. Our business is about talent and producing excellent content so we must make sure our people can do this.
“We have already set up a programme with Financial Times to send our people there for training and bringing well-known experts here. That is just the beginning. We are determined to take talent and improve on it in all areas of this industry, from subbing to court reporting…”
Another intended Bonamour change is the “look and feel” of the building. “I want it to look like a media house, not like a government building.” He doesn’t believe there is a good culture at TMG and, he says, “I want people to look forward to coming to work here and being a part of this group.”
He intends giving staff members, journalists included, share options so they are all invested in the company doing well. But in the meantime, numerous staff members in Rosebank are grumbling because he has withdrawn the canteen facility and stopped providing free milk for tea and coffee. Even the plants around the building have disappeared.
“The cost of these facilities was exorbitant so we had to make these changes. We were paying about R8 000 a month to maintain the plants – that is ridiculous!”
He gives his assurance, though, that he will make amends. “We had to get rid of the bells and whistles and then we will start building up again. This mid-size business was run as if it was a big business.”
Of the four divisions of TMG – media, retail, entertainment and books – Bonamour speaks of focusing on the first two and selling off Nu Metro and Exclusive Books. He says these are both good businesses that can be profitable but, he says: “We are going to focus on where we are strong and get out of where we are weak.”
He has big plans and lots of passion, but time and his track record will tell how that will affect TMG.