Hong Kong media giant Next Digital sells magazines for HK$500 million in bid to expand online content
Parent company of newspaper Apple Daily says deal marks completion of its ‘digital transformation’
Hong Kong media giant Next Digital Limited, controlled by mogul Jimmy Lai Chee-ying, has accepted an offer to sell some of its magazine businesses in Hong Kong and Taiwan for HK$500 million in a bid to expand the digital content of its remaining businesses.
The company said in a filing to the Hong Kong stock exchange on Monday that it had accepted an indicative offer from W Bros Investments Limited, a company wholly owned by businessman Kenny Wee Ho, to sell Sudden Weekly, Face, ME!, Next Magazine and Next+One.
Of the HK$500 million, HK$320 million will go to Next Digital while HK$180 million will be injected into the magazines, according to the filing.
Next Digital’s CEO Cassian Cheung Ka-sing wrote in an open letter to employees on Monday: “Over the past few years, we have seen the industry’s transformation from print to digital. It is an irresistible trend. The company can now focus its resources to speed up developments on digital platforms, so we can maintain our leading role in this area.”
The deal was expected to be completed in September, Cheung said.
The company will continue to run its flagship newspaper Apple Daily, as well as JF Digital and Eat and Travel Weekly magazines.
Next Digital recorded a loss of HK$393 million in the last fiscal year – nearly HK$70 million more than the previous year.
Lai founded Next Magazine in 1990 and Apple Daily in 1995. Known to be a pro-democracy figure, Lai and some 200 protesters were arrested during the Occupy Central movement in 2014 as police cleared the Admiralty base camp. Lai has also been a regular attendee at the city’s July 1 marches and its Tiananmen crackdown vigils.
Under the deal, about 400 employees would be affected. Some reacted angrily to the news, with Next Magazine’s editor-in-chief Louise Wong seen sobbing in the newsroom.
“The news came as a surprise to most of us,” an employee said.
Others at the company criticised Lai, noting he had advised in a 2013 radio programme that he would be a “jerk” to sell.
In staff meetings on Monday, Cheung revealed that Lai had struggled before making the decision to sell the magazines, Apple Daily reported, and that Lai had promised not to sell the company off entirely.
Cheung told the Post there was “no plan to lay off the magazines’ staff” and that the company would “discuss with Mr Wee retaining most, if not all, existing staff”.
Next Media Trade Union doubted whether Wee would allow Next Magazine to remain outspoken, claiming he once said he was “a bit more moderate” than the publication when asked about another magazine he founded in 2015.
The union demanded that both Next Digital and Wee ensure no staff would be sacked. For those who voluntarily wished to resign, it said, they should be offered additional compensation above severance payments. The union also wanted the management under Wee to sign a declaration stating its editorial operations would remain independent.
Next Digital saw its shares rise 14.9 per cent to HK$0.42 at the market’s close on Monday, after surging more than 30 per cent at one point in early afternoon trading.
Bruce Lui Ping-kuen, senior lecturer of journalism at Baptist University, said Next Digital had struggled as some firms refused to place advertisements in its publications due to its pro-democracy stance.
He added it was difficult to run a magazine because readers expected in-depth and exclusive articles, which in turn required a company to inject investments.
Founded in 1990, Next Magazine used to be the city’s most popular news magazine, with a circulation that reached about 160,000. However, it saw its advertising revenue plunge 46.2 per cent to about HK$57 million during the 2016-2017 financial year compared with the year before, according to the group’s filing with the stock exchange.