Lessons from the Outlook Group closures

BY sevanti ninan| IN Opinion | 08/08/2013
Even after post-closure confabulations with management, editors of these magazines are no wiser as to what really sparked the decision.
And the handling of it all lowered the bar for what you owe employees, says SEVANTI NINAN

Two days after the editor and employees of People India withdrew their application for interim relief in the 7th Labour court of Judge P K Chitnis, sparked by a closure action of the Outlook Group, it is worth looking at what the whole episode reveals about how vulnerable media employees have become, how little notice companies give, or explanation they offer for their actions, but also what potential for collective action exists if employees are united and explore options available to them. 


First, the way the closures were done. Even after post-closure confabulations with the group president the editors of the closed publications are no wiser as to what really sparked the sudden decision. There had been a meeting in the first half of June where editors of all the magazines in the group discussed the financial situation in the company with the management. Employee dues had been piling up for a year or more. Editorial Chairman of the Group, Vinod Mehta was also present. But the franchise edition editors did not come away with any sense of drastic action being imminent.  

But some six weeks later, on July 26 the closure of Marie Claire, People India and Geo was announced. It lowered the bar for what you owe employees. Magazines and newspapers are shut down, or sold. But you gather the staff and tell them before you announce the closure to the world. When the staff including the editors learned about the closures it was from a tweet by an outsider, and from a media news website. Late evening it carried a statement from the Outlook Group president Indranil Roy. Best Media Info claims he said, “It has nothing to do with profitability. It’s our business call not to continue with the titles.”

To The Hoot Roy said, I always said that it is a profitability issue, don't know who quoted by saying that "it is not a profitability issue". Not all franchises were up for renewal just then, Geo's franchise in fact had been renewed in December  2012 for five years. Roy says “renewal conversations were on.” People India had just brought out a fifth anniversary issue. Asked what stage the renewal of that licence was at, a spokesperson of Time Inc. which franchises the People title said it was their policy not to comment on partnership agreements.

Roy’s statement on profitability  is in sync with that of Vinod Mehta,  the Group’s editorial chairman who told Business World that the three magazines were losing money because of huge licence fees paid to the foreign title holders, and had become white elephants. If there was no time to give notice to the staff then the decision was abrupt and begs the question, why? Mr Mehta has helpfully disabused BW of the notion that Outlook was up for sale, and to Network 18 at that. So if not, why the hurry to present a better bottom line overnight? To whom? And whose decision was it? One of the editors says Vinod Mehta said to her that he was not consulted and his advice not taken.

Finding yourself suddenly jobless is not pleasant at the best of times. The 42 journalists including 3 editors can only hope at this point that the parent magazines will continue the franchises with new partners before long. The support staff laid off don’t even have that hope to cling on to. The little cheer there is comes from the fact that a group that subjected its staff to delayed payments for a year or more, and put it editors in the position of constantly explaining the delays to irate contributors, suddenly settled all dues speedily after the People India bunch went to a labour court to get a stay on retrenchment without due process of law being followed. (See  column  below). After all, if more employees had thought of getting a court stay, the Group would have been paying salaries indefinitely for publications that had stopped publishing. Doing so for the People employees till August 6 when they withdrew the case after full settlement, was bad enough. 

It’s ironical that a group whose proprietor was lauded by Mehta as a “prince among publishers” should subject employees to salary delays and piled up allowance reimbursements for as much as a year or more. But the intriguing question we are left with is, after the substantial trimming of staff and publications behind it what will the  Group do next?  Continue to bet on a newsmagazine business which is increasingly unviable, or look for a buyer, even if that is currently being officially denied?

What of the white elephant claim? Calculations for one of the magazines whose franchise licence fee amount  after the dollar inflation is known, show that  this annual fee it is less than what is earned from advertising and its cover price in a couple of issues. Even after assuming discounted rates for the advertising.  Magazine sources said there were  some losses on account of the licensed international titles but they was not major losses. An industry source familiar with the company’s finances makes two points: the kind of losses incurred over a year for the magazines was not enough to warrant a shutdown, and secondly, lifestyle magazines in India are getting advertising. Neither the Living Media group nor the lifestyle publications division of the Times Group are shutting down anything. Geo was a science magazine, its circulation figures were higher than those of the other two, and it had a total staff of three including the editor. How much of a white elephant could it have been?

So what provoked the shutdown? The mystery remains.

                                                   ******

                  Reprinted from Mint, August 8, 2013

TALKING MEDIA
Sevanti Ninan      

The sudden relevance of labour courts 

The last place you would expect to find people seeking a labour court’s intervention would be a celebrity magazine. 


Lots of journalists are losing their jobs. Nobody knows how many because with unions mattering less and less nobody is tracking it, countrywide. How uncertain the media job market is becoming is being brought home, month after month through anecdotal evidence. There are closures, as well exits unrelated to closures. When the economy is in trouble it reflects on the media, not just in it.

After the departures at Forbes in June there was a high profile TV anchor resignation at Network 18 in July. The same month the Bennett Coleman group shut down the weekend newspaper Crest, though no job losses were reported. And last fortnight the Outlook group shut down three franchise editions. Before that in Mumbai. a Hindi tabloid called Metro 7 Days, the Hindi eveninger called Mumbai Sandhya, and the Hindi magazine called Health from the Magna group, all closed down, in the last 12 months or so. Thirty or more jobs went. Others got absorbed in group publications where Magna was concerned. 

Job losses are a great leveller. Apart from all kinds of support staff, and people in advertising and marketing, the Outlook departures  include a president of the company who looked after Geo as well as other non-franchise publications. The company obtained resignations from a large number of people including 40 odd journalists, three editors among them. 

Since there have been departures across departments and across the country, the actual figure of exits over the last ten-twelve days at this group is much higher. As high as 120 or more insiders said, but Outlook Group president Indranil Roy did not confirm or deny any figure. He simply said all departures were amicably settled and that was a closed chapter. 

It may be for the company but not for the employees. The journalists among them have to see whether the International magazines they were on the staff of--People India, owned by Time Inc, Marie Claire published in partnership with French publisher Groupe Marie Claire, and  Geo was licensed from Gruner + Jahr (G+J) International, find new franchise partners. Geo’s owner has a majority stake in an Indian publishing house if it wants  to use it to relaunch Geo in India. Because this is hardly a market in which jobs are easy to come by. Middle level journalists in English language media outlets are finding the going particularly tough. 

The Outlook Group case has become interesting because it acquired briefly last fortnight, a labour court angle. The last place you would expect to find people seeking a labour court’s intervention would be a celebrity magazine. But that’s what happened. 

In the context of abrupt closures by the publishers which were announced on Twitter and in the media before the editors and staff were told, there was some panic. Particularly so since dues of employees of this group have really been building up. For a year or little more salaries have been regularly delayed, when the closures were announced on July 26, June salaries had not been paid. Other dues of some employees such as medical or travel reimbursements have been building up for a year. 

So after there was insufficient evidence of action over the next three or four days, and the June salary was still not forthcoming, 17 employees of People India led by the editor filed an application for interim relief fearing termination “without following the due process of law.” And obtained an order which said the company should maintain status quo and not terminate their services without following “due procedure of law.” This was under the Maharashtra Recognition of Trade Union and Prevention of Unfair Labour Practices Act. 

 The effect was magical. A company that had not found the money to pay allowances and dues for a year suddenly did so. First those of the Delhi employees of Marie Claire, Geo and other departments, and then of the People India staff in Mumbai. Seven days after their application, the latter withdrew the case. That leaves only hoardes of unpaid contributors whose dues Roy says they are committed to clearing. 

The Brihanmumbai Union of Journalists points to certain trends in the way employment issues in the media are panning out. There are scarcely any terminations these days, only resignations. Even fixed tenure employment is a contract, and leading lights of unions are also on contracts. Nobody goes to court. In the last one year only one journalist in Mumbai challenged his dismissal, a resident editor of Hamara Mahanagar and eventually he settled out of court.   

Electronic media employees don’t even have the recourse to the Working Journalists Act because it talks only of print and does not cover them. Unions have no relevance when journalists are mobile and don’t stick with one employer for long. And salary differences between the top levels and those at the middle are so huge, that there is no sense of belonging to the same category of working journalists.

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