Will a sellout help the fading Star?

 

Twice in the recent past MCA leader Chua Soi Lek had spoken against political ownership of Malaysian media. 

uppercaise 

Questions of credibility and crumbling sales

Although MCA president Chua Soi Lek has firmly denied speculation of the party selling off its assets, among which The Star is a prize item, for its political and financial power, it is still an open question as to whether the MCA’s ownership of the paper is becoming a drag on the paper and its commercial success. [No sale]

Raja Petra Kamarudin at Malaysia Today had speculated yesterday that the MCA would suffer the fate of Umno after its deregistration and rebirth as Umno Baru in 1989, and become subject to asset-stripping by its taikos.

RPK had named the Star’s chairman, Fong Chan Onn, executive deputy chairman Vincent Lee as among those most likely to lead any such shuffling of MCA assets. [RPK]

Speculation about a possible sale of MCA holdings in property and investments (the MCA building in Jalan Ampang, Menara Multi-Purpose in Capital Square and others) arose after the party’s drubbing at the general election on May 5. Only seven of its candidates were returned as MPs, and 11 as state assemblymen in its worst electoral performance.

Soon there was further talk of giving up the ghost and liquidating the party’s assets.

The Star is a prize asset, together with its minor publications and three radio stations. The party’s 42% stake in Star Publications, the publishing company, bring in tens of millions of ringgit in annual dividends.

There is also the prospect of making capital gains — but any fire-sale of the investment in the Star would result in a massive loss. The MCA paid RM1.2bln to take over the Star stake from Huaran Holdings, the party’s investment arm. At its current trading price of RM2.60, the party’s 313mil shares have a market value of just over RM813mil — RM400mil less than it paid for the stake.

That decline in value is also reflected in the Star’s loss of credibility among the politically aware, robbing the the MCA of any advantage it might have had from the Star’s reach into the hearts and minds of the Malaysian Chinese electorate, and Malaysian society as a whole,

The market has shifted. The Star’s core readership of middle-class Malaysians in urban centres turned its back on the Barisan Nasional and the MCA at the general election, and there is increasing criticism of the paper’s sycophantic coverage of the MCA.

There is generally lacklustre coverage of opposition politics (but even that is criticised by pro-Umno bloggers and brings rebukes from Barisan Nasional flunkies at the PM’s Department).

The Star is thus caught at a crossroads, damned if they do and damned if they don’t. Coverage of opposition politics, especially of the DAP, brings swift complaints from MCA and Umno politicians. Critical coverage of opposition politicians brings swift condemnation from readers and calls for a boycott.

In the Star newsroom, as well as newsrooms elsewhere, are a large number of journalists who would be personally predisposed towards the opposition, for much the same reasons the urban middle-class rejected the Barisan Nasional at the elections: out of sympathy for the underdog, out of disgust with the oppressive and over-the-top racialism of Barisan Nasional politics, as well as professional disgust at having to give a professional gloss at propaganda.

(However any disgust at giving a professional gloss to the commercial propaganda that fills most of the other pages is mitigated by an innate sense of survival.)

Read more at: http://uppercaise.wordpress.com/2013/05/22/the-star-sellout-mca/